Death Tax Relief Gets New Life

Death Tax Relief Gets New Life

Congressman J.D. Hayworth (R-Ariz.) joined Republican-led efforts approve legislation that would provide permanent estate tax and gift tax relief for millions of Americans. The House passed H.R. 5638, the Permanent Estate Tax Relief Act of 2006, by a vote of 269 to 156.

"Benjamin Franklin had it right when he said, 'In this world nothing is certain but death and taxes.' But they shouldn't have to happen at the same time," said Rep. Hayworth. "Estate tax relief is critical for a state like Arizona that has lots of farms, ranches, and small businesses that are asset rich, but cash poor. This relief is necessary to ensure that these Arizonans can keep their businesses in the family!"

Many economists have noted that the death tax penalizes savings and makes it more difficult for small business owners and farmers to pass on their life's work to their families. The new legislation reunifies the estate, gift, and generation-skipping transfer taxes and increases the estate and gift tax exemption to $5 million per person. In addition, married couples can carry over any unused part of their spouse's $5 million exemption. For estates between $5 million and $25 million, the rate of tax will be the same as the capital gains tax rate. On estates valued at more than $25 million, the top marginal rate of tax will be double the capital gains tax rate.

This tax relief will go into effect in 2010. Under current law the death tax will be repealed in 2010, but return in 2011.

"The American people are not just being taxed to death; they're being taxed after death. But, no one should have to sell the life's work of a parent or a loved one just to pay the federal government."

http://hayworth.house.gov/cgi-data/news/files/392.shtml