America's independent, non-partisan advocate for overburdened taxpayers.


NTU writes in support of H.R. 2327, the "Eminent Domain Tax Relief Act of 2011."
An Open Letter to Representative Gingrey.

July 21, 2011

The Honorable Phil Gingrey
United States House of Representatives
442 Cannon House Office Building
Washington, DC 20515

Dear Representative Gingrey:

On behalf of the 362,000 members of the National Taxpayers Union (NTU), I write in support of your bill, H.R. 2327, the “Eminent Domain Tax Relief Act of 2011.” This bill would amend the Internal Revenue Code to spare unsuspecting property owners from paying harsh federal taxes on a sale the government compelled them to make. 

The Eminent Domain Tax Relief Act is particularly timely, given the recent anniversary of the infamous Supreme Court decision in Kelo v. New London. In that case the Court sanctioned a transfer of private property from homeowners to a development company in the name of job creation and increased tax revenue, neither of which was ever realized. Predictably, this encouraged overreaching bureaucrats and elected officials to collaborate with political allies in promoting projects that not only cost citizens the residences and businesses they worked hard to build, but also cost taxpayers the money they worked hard to earn.

Fortunately, in the wake of the Kelo decision, 43 states have passed eminent domain reform laws to constrain the abuse of private property rights. Nevertheless, wide variations in the state-level requirements for condemnations based on “economic development” or “blight” leave the door open for policies that infringe on property rights.

H.R. 2327 would add a vital protection for those taxpayers who might still be snared in the eminent domain web. Currently, citizens who are compelled to give up their home, business, or land face a “double whammy”: they are forced to take a dubious and subjective “fair market value” for their property and must pay capital gains taxes on any proceeds from the mandated sale. Your bill would shield Americans in this situation from being burdened by these punitive levies. It should come as common sense that the government should not make a tax profit when it seizes anyone’s property, whether the taking is for traditional public uses or for the more controversial (and unjustifiable) reason of economic development.

As an organization that has long advocated for limited government, NTU believes this bill to be an imperative check against the egregious intrusion upon taxpayers’ private property rights that has followed the Kelo decision. We are proud to endorse the Eminent Domain Tax Relief Act and any roll call votes will be included in our annual Rating of Congress.

Brandon Greife
Federal Government Affairs Manager