House Makes Death Tax Ban Permanent

by Mike Godfrey, Tax-News.com, Washington

20 June 2003

The House of Representatives voted this week to repeal inheritance tax legislation, which is blamed for putting an unnecessary strain on family run firms and is blamed for many small business failures.

It is claimed by some that the punitive levels of death tax are a major contributor to the shocking statistic that 70% of family owned businesses fail to make it past the second generation whilst some 80% fold by the third generation according to estimates.

A study released Wednesday by the Joint Economic Committee backs this up, stating: "the estate tax is a leading cause of dissolution for thousands of family-run businesses, diverting resources available for investment and employment."

Previously, death tax was to be repealed until 2010 when it would be phased in once more at a rate of 55% and with a unified credit exemption of $1 million. However, the new legislation, known as the Death Tax Repeal Permanency Act will get rid of this most unsavoury burden for American families on a permanent basis.

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