Death Tax Repeal Killed
Those in favor of resurrecting the federal death tax got their wish when the U.S. Senate failed in June to reach the necessary 60 votes. That was the number of votes necessary to move forward with Republican-led efforts to permanently repeal the federal death tax on the estates of deceased entrepreneurs who toiled a lifetime to build a prosperous family business.
So starting again in 2011, the 55 percent federal death tax will apply to estates valued at $1 million and higher.
Before sons and daughters are able to carry on the operations of the farm, ranch, restaurant or gas station, they will have to figure out how to pay Uncle Sam's share.
As chairman of the tax-writing Senate Finance Committee, I advocate public policy that lets hard-working Americans keep more of their own money.
That's why I helped shepherd through the landmark tax relief laws in 2001 that significantly reduced marginal tax rates (including the creation of a new 10 percent bracket), decreased taxes owed on investment income and increased exemptions of family estates from the federal death tax.
This year I won extensions for reduced tax rates on capital gains and dividends through 2010. Even though the federal death tax rate will disappear under current law in 2010, it will revert to its original rate of 55 percent if the pro-death tax proponents in Congress prevail.
Keeping money in the pockets of those who earn it helps cultivate the entrepreneurial spirit. That's the silver bullet of the U.S. economy: the opportunity to achieve personal wealth and prosperity. Big dreams can yield big rewards. Whether you are a first-generation American or descendent of those who entered the country via Ellis Island, the promise of freedom, opportunity and prosperity keeps alive the American Dream.
It goes against the grain that Uncle Sam gets to keep 55 percent tax of a person's estate upon his or her death. The big spenders in Washington have long pursued tax policy that redistributes wealth among Americans. Forget planting the seeds that nourish and fertilize job-creating investment and economic growth. They'd rather pull the tax levers in Washington to soak the rich and fan the flames of class warfare. Rung by rung, the tax-happy liberals will seek to dismantle the ladder of economic mobility for entrepreneurs who dare to dream big and work their tail off to carve out a better life for themselves and their children.
So even though a majority of Americans support repeal of the punitive death tax, a minority of lawmakers in the U.S. Senate managed to hold the will of the people hostage.
Death tax advocates like to pony up images of the super-rich. Funny how the death tax first created in 1917 hasn't drained the wealth of old-money family dynasties, including some whose family members are among the most ardent death tax relief opponents in the U.S. Senate.
But it sure manages to squeeze heirs of the middle class, who face the burden of burying a loved one and paying death taxes on a lifetime of sacrifice, hard-work and success that their thrifty parents poured into the family farm, ranch or small business.
Even though they managed for now to keep the death tax on life support, I'll continue working to pull the plug on this confiscatory tax once and for all.