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An Open Letter to the United States House of Representatives: Oppose H.R. 3905, the Estate Tax Relief Act of 2009
November 3, 2009
On behalf of the 362,000 members of the National Taxpayers Union (NTU), I write to ask that you oppose H.R. 3905, the so-called "Estate Tax Relief Act of 2009," which dramatically hikes taxes by canceling repeal of this onerous levy in 2010, while slowly moving toward an exemption level of $5 million and a 35 percent rate. Though it is slightly better policy than what post-2010 law currently provides, this bill will make it more difficult to permanently eliminate the death tax -- a core goal of NTU.
Repeal of the death tax would deliver an element of relief for an economy that remains worse than we have seen in decades. The economic implications speak for themselves: the death tax destroys the hard-earned savings of parents wishing to leave behind a better life for their children; the death tax is especially damaging to small businesses and family-owned farms, some of which are forced into bankruptcy through the imposition of this burden; the death tax generates a mere one percent of total federal revenue; and, finally, many economists have made clear that the tax's adverse effects on the economy exceed generated revenues. To that end, the American Family Business Foundation recently released a report that highlighted study findings by Douglas Holtz-Eakin. In his Changing Views of the Estate Tax: Implications for Legislative Options, Holtz-Eakin acknowledges that eliminating the death tax would actually increase the government's revenue -- more specifically, the government "could actually bring in nearly twice the revenue the death tax brings in." Additionally, permanent repeal would create 1.5 million jobs and slash the unemployment rate by a full percentage point over the next two years.
There is also a powerful moral case to be made for repealing the death tax. The tax punishes thrift, savings, and hard work -- three attributes that are not only imperative to getting our economy back on track, but also are part of America's richly woven social fabric. Especially in times like these, we cannot afford to crush the talent and dreams of those who aspire to make our nation even greater.
Enacting a huge hike in 2010 in order to potentially gain a slight reduction in the tax in subsequent years is not a good compromise. I urge all Representatives to push for full repeal of the death tax and to oppose H.R. 3905. Any roll call votes on this bill will be significantly weighted in our annual Rating of Congress.