WASHINGTON—Another attempt in Congress to permanently repeal the estate tax—the so-called "death tax"—is under way, and three tire and automotive trade groups are onboard for the trip.
The Tire Industry Association, the Automotive Aftermarket Industry Association and the Service Station Dealers of America and Allied Trades are among the groups backing legislation to repeal the estate tax permanently. All three associations, along with more than 30 others, are members of the Family Business Coalition, an organization dedicated to backing the Death Tax Repeal Act of 2013.
Sen. John Thune, R-S.D., sent a letter June 12 to his congressional colleagues, urging their support for the bill, which he is sponsoring in the Senate. According to Sen. Thune, the bill would:
- Repeal both the estate tax and the generation-skipping transfer tax;
- Make permanent both a maximum 35-percent gift tax rate and a lifetime $5 million gift tax exemption, adjusted for inflation; and
- Maintain stepped-up provisions to protect the assets of family farms and businesses.
"America's family businesses and farmers were spared from the wrath of the federal estate tax in 2010, but unfortunately this was merely a short reprieve," Sen. Thune said in his letter. "As it stands today, more than 70 percent of family businesses do not survive to the second generation, and a full 90 percent of family businesses do not survive to the third generation."
The Family Business Coalition sent Sen. Thune and Rep. Kevin Brady, R-Texas, a thank-you letter for sponsoring the Death Tax Repeal Act. The estate tax, the coalition members said, dampens job creation, is unfair to hardworking farm and small business families and falls especially hard on minorities, while contributing very little proportionately to federal revenues.
At a June 19 press conference on Capitol Hill, supporters of the Death Tax Repeal Act joined Messrs. Thune and Brady to express their support for the legislation. They included Senate Minority Leader Mitch McConnell, R-Ky.; Sen. Orrin Hatch, R-Utah, ranking Republican on the Senate Finance Committee; and Grover Norquist, founder and president of Americans for Tax Reform.
As many as 2,400 family farms and 2,700 small businesses could suffer irreparable harm this year because of the estate tax, Sen. Hatch said in his remarks. There seems to be bipartisan support for an estate tax repeal this year, Sen. Thune said at the press conference.
Earlier this year, Senate Finance Chairman Max Baucus, D-Mont., voted to support Sen. Thune's budget amendment to repeal or reduce the estate tax, and some 80 senators voted to support a measure by Sen. Mark Warner, D-Va., to reduce the tax, Sen. Thune said.
"Ending the death tax grows the economy, and the economics show it," he said. He added that, according to Congressional Budget Office estimates, repealing the estate tax would cost the federal government about $20 billion annually, or about 0.5 percent of the annual federal budget. No hearings have been scheduled as yet in the House or Senate.