Trade groups hail House 'death tax' repeal

WASHINGTON (April 21, 2015) — Industry trade groups are hailing the U.S. House of Representatives' passage of H.R. 1105 — the Death Tax Repeal Act of 2015.

The House's 240-179 vote on April 16 to approve the bill garnered praise from groups such as the Tire Industry Association (TIA) and the American International Automobile Dealers Association (AIADA).

If it becomes law, H.R. 1105 would end the estate tax — or so-called “death tax” — which places a 40-percent tax on estates worth more than $5.43 million. It also would repeal the generation-skipping transfer (GST) tax.

“Republicans managed their floor time well and hit all of the key points about fairness, jobs, the economy and the effect of the death tax on family businesses,” TIA said in its April 20 Legislative Update regarding the House floor debate on the bill.

Kevin Brady, R-Texas, is the bill's main sponsor. A senior member of the House Ways and Means Committe, Mr. Grady said: "The death tax is the wrong tax at the wrong time and hurts the wrong people. It's the number one reason why family-owned businesses aren't passed down to the next generation.... Instead of hiring more workers and investing in their business, the death tax diverts their precious dollars and time to estate planning."

Organizations representing small businesses regard the estate tax as punitive toward small business owners and family farmers.

“Family-owned businesses like dealerships are often land-rich but cash-poor, forcing heirs to sell off parts or all of their family's business in order to pay the IRS,” the AIADA said after the bill's passage.

The AIADA quoted a study by the non-partisan Tax Foundation which found the repeal of the estate tax would increase the U.S. capital stock by 2.2 percent and create 139,000 jobs.

Prospects for the bill's passage in the Senate are unclear, and President Barack Obama has vowed to veto the legislation.

“Recent efforts to repeal the estate tax have traditionally broken along partisan lines, and the current debate appears to be no different,” TIA said. However, there have been some bipartisan discussions, especially in the House, about creating estate tax exemptions for small businesses and farms, it said.

Meanwhile, many pundits and organization — mostly but not all liberal — oppose estate tax repeal as just another tax break for the rich.

In an April 14 column headlined, “Republicans push for a permanent aristocracy,” Washington Post writer Dana Milbank said only the nation's 5,500 wealthiest households would benefit from estate tax repeal.

In 2013, Mr. Milbank wrote, only 120 farmers and small business owners — including 100 large farms — were affected by the estate tax at all.