U.S. Estate Tax Repeal

The U.S. Estate Tax law forgives the first $5.43 million of estate value.  This fully protects small family businesses valued at under $5.43 million (in 2015). If a family farm or ranch is valued at $1000 per acre. The current law protects farms with up to 5430 acres.  There are lots of small farms and businesses benefitting from the current law. 

If, the family business is valued over $5.43 million, the portion over this deductible is taxed is a small family-owned manufacturing company valued at $10 million, or a large family-owned car dealership, or a large 10,000 acre family farm or ranch valued at $10 million  it’s a different story.  There are lots of these family-owned companies in the U.S.  If the owner dies, the family must take out a loan to pay the tax.

Beneficiaries of a $10 million estate will pay no tax on the first $5.43 million and 40% on the next $4.57 million under current law.  This is the tax bite the 2015 Republican Budget would eliminate. A family farm would have to sell half the farm.  A family business would likely have to close.  Large family businesses typically employ 100 people, most with long service.  This is the kind of economic destruction this component of the 2015 Republican Budget would stop.

Lost federal revenue is estimated to be $269 billion over the next 10 years.  The question is, by eliminating this destructive tax worth $27 Billion a year.  If this tax cut doesn’t make it in 2015, it should be made as soon as possible. Family businesses are great employers. They typically promote from within. The family is the basic economic unit in a free market economy. The U.S. economy was built on this principle. It is the only system that has worked in the entire history of the world.

The US Estate Tax has been “grinding down” family businesses since its inception. There has been some improvement since 2002.  The exemption has gone from $1 million to over $5 million and inches up every year.

A higher priority right now is to cut federal spending further by eliminating those entire departments, agencies and programs that do more harm than good. That alone would save another $500 billion a year.

Norb Leahy, Dunwoody GA Tea Party Leader

Data Source: http://en.wikipedia.org/wiki/Estate_tax_in_the_United_States