Congressman Rick Berg today blasted the death tax plans of President Obama and Senate Democratic Leader Harry Reid. At a press conference in Bismarck, Berg stood with local farm and small business owners to discuss the negative effects of any sort of death tax, which both President Obama and Harry Reid and the Democrat-controlled Senate support.
"The death tax policy directly contradicts the American Dream," said Berg. "America was built on hard work, ingenuity and innovation, and the Death tax destroys this spirit. It is completely mind boggling to me that President Obama and Senate Democrats believe that when a family farmer or small business owner passes away after paying taxes on their business their entire lives, it is somehow acceptable to further tax the family over half of its assets. You can't be pro family farm or pro small business and support the death tax."
Better known as the death tax, the controversial federal estate tax is imposed when property is transferred at death. Indexed at any income level, the death tax is essentially unfair, because it constitutes double taxation on income, hurting small business, farmers and ranchers.
While the owner of the estate is responsible for the tax, their heirs often become responsible for the payment of the tax upon the death of the owner. The value of the estate to which the tax is applied includes all property a business owner or farmer has an interest in at the time of death, including life insurance, annuities, and business assets such as property and farming equipment.
The threat of this tax forces family farmers, ranchers, and small business owners to pay for expensive estate planning if they want to keep their business in their family after their death. For many farmers, ranchers and small business owners, the value of their "estate" is in the physical assets of the farm or business, meaning to pay the tax they have to sell the actual parts of the farm or business.
Berg believes that death taxes should be eliminated permanently. But until this can be accomplished, Berg supports providing the certainty that agriculture and businesses need by preventing a massive increase in the death tax at the end of this year. This means extending the current $5 million exemption, indexing it, continuing the spousal transfer, and maintaining the top 35 percent tax rate.
Rick Berg is also a cosponsor of the Death Tax Repeal Permanency Act (H.R. 1259) and strongly supports full repeal of the Estate Tax. He is also an original cosponsor of the Job Protection and Recession Prevention Act (H.R. 8), which among other provisions would extend the current estate tax rate for an additional year and provide a pathway forward to comprehensive tax reform in 2013.