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Taxpayers Support the "Eminent Domain Tax Relief Act"

June 24, 2008

Dear Representative:

On behalf of the 362,000 members and the many property owners of the National Taxpayers Union, I urge you to cosponsor the Eminent Domain Tax Relief Act. This bill would amend the Internal Revenue Code of 1986 to exclude the conversion of property by reason of eminent domain from gross income gain. In layman's terms, that means unsuspecting property owners won't be forced to pay punitive taxes for a sale the government compelled them to make.

The Eminent Domain Tax Relief Act is particularly timely, given the third anniversary of the Supreme Court's decision in the Kelo case. The Court held that the City of New London, Connecticut was justified in seizing Susette Kelo's property on behalf of a private party that claimed it could generate higher economic activity and tax revenues if the land were used differently. The government is now permitted the use of eminent domain for a private-to-private transfer if officials believe it to be economically advantageous (unless limited by state legislation, local ordinances, and/or ballot measure prohibitions).

The Eminent Domain Tax Relief Act would shield property owners who are forced to give up their home, business, or land via eminent domain from capital gains taxes. The government shouldn't make a tax profit when it seizes anyone's property, whether the takings is for traditional public uses or for more controversial reasons of economic development.

Our members believe the House should quickly pass this critical piece of legislation. The Eminent Domain Tax Relief Act is an important tool in the continuing efforts to battle eminent domain excesses and ensure the responsible leadership that our country deserves. Roll call votes on the Eminent Domain Tax Relief Act will be included in our 2008 Rating of Congress.


Kristina Rasmussen
Director of Government Affairs