AKRON (July 30, 2000)—It´s never easy to talk about death. But it´s especially difficult when you combine the subject with taxes.
For tire dealers and other small-business owners, the federal estate tax has been especially onerous.
You work hard all your life building a thriving business only to find you can´t pass it on to your heirs because it has to be sold to pay the taxes.
There´s something fundamentally wrong with this scenario, and it´s time the estate tax is eliminated.
With the House of Representatives having voted 279-136 June 9 to repeal the federal estate tax over the next decade, now is the best opportunity in years to end this unfair tax.
Next up is the Senate vote, which promises to be a somewhat tougher sell.
Tire dealers need to voice their opinions to their Senators to ensure enough votes to override a threatened presidential veto.
That´s the only real chance dealers and others have of eliminating the tax.
The House bill, initiated by the Republicans, was supported by 65 Democrats, who broke party ranks to vote for it.
It would repeal a tax established in 1916 to redistribute wealth and prevent a small group of families from amassing a majority of the nation´s riches.
Many small-business owners may not know how burdensome the estate tax really is.
Farms and businesses valued at more than $1.3 million are subject to it.
Currently, the highest federal tax rate for those inheriting businesses totals 60 percent.
As passed, the House bill would eliminate the top inheritance tax rate of 55 percent and a 5-percent surtax on estates in 2001. Rates over 50 percent would then be axed in 2002, with the maximum tax continuing to decrease by 1 to 2 percent per year before being totally repealed by 2010.
President Clinton has vowed to veto the measure, citing the heavy burden it would place on the federal budget.
He favors reducing the top tax rate and increasing the farm and small business exemption to $2 million.
This threshold, however, is still too low to protect many small businesses, including tire dealerships.
Counting real estate, equipment and inventory, many dealerships easily could reach the taxable threshold.
While death and taxes may be inevitable, as the saying goes, inheritance taxes shouldn´t force the demise or sale of a business.
Small businesses are the backbone of the economy and create the majority of new jobs each year. Government policies should help preserve these entities, not undermine them.
In an era of reported federal budget surpluses, continuation of such an unfair tax should be unthinkable.
It´s time to end the federal estate tax. Make your voice heard.