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An Open Letter to the United States House of Representatives: Oppose H.R. 4154, the Permanent Estate Tax Relief Act of 2009
December 1, 2009
On behalf of the 362,000 members of the National Taxpayers Union (NTU), I write to ask that you oppose H.R. 4154, the so-called Permanent Estate Tax "Relief" for Families, Farmers, and Small Businesses Act, which dramatically hikes taxes by canceling repeal of this onerous levy in 2010, while moving toward an exemption level of $3.5 million and a 45 percent rate. This bill will make it nearly impossible to permanently eliminate the death tax -- a core goal of NTU.
The negative impact of the death tax on our nation's economy is clear. The tax crushes the savings of those families who have worked their entire lives in order to leave their children with at least some financial security for the future. It is most damaging to small businesses and family-owned farms, some of which are forced into bankruptcy because they are unable to come up with funds to pay the tax and keep their companies afloat. Finally, many economists have made clear that the tax's adverse effects on the economy exceed generated revenues. Repeal of the death tax would deliver an element of relief for an economy that remains worse than we have seen in decades. 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. Because it taxes virtue -- living frugally and accumulating wealth -- the tax wastes the talent of able people. In times like these, we cannot afford to crush the talent and dreams of those who aspire to make our nation even greater.
Whatever the intent of some supporters, a rate of 45 percent will be seen as an attempt to abolish all chances for permanent repeal. I urge all Representatives to push for an end to the death tax and to oppose H.R. 4154. Any roll call votes on this bill will be significantly weighted in our annual Rating of Congress.