As “taxmageddon” approaches with the scheduled expiration of the Bush tax cuts in January, a coalition of non-profit groups and conservative Republican lawmakers is pushing for permanent repeal of the estate tax, and putting politicians of both parties on the record as to whether they support full repeal.
Republican leadership has seemed hesitant to focus on any particular aspect of the tax-cut extension battle, favoring a simple extension of the tax cuts, which would hold the estate tax rate at its current 35 percent. If the tax cuts are allowed to expire in January, the rate would skyrocket to 55 percent — putting the United States’ rate among the highest in the world economy.
In a July 17 letter to Speaker of the House John Boehner obtained by The Daily Caller, the Family Business Coalition — which includes The 60 Plus Association, Americans for Tax Reform, Americans for Prosperity, The Club for Growth, the National Taxpayers Union, the American Conservative Union and others, including a number of industry groups — voiced support for the Death Tax Repeal Permanency Act, which currently has 217 cosponsors, including Democrats and 19 members of the 22 Republicans on the Ways and Means Committee. The act, sponsored by Republican Rep. Kevin Brady, was introduced in late March 2011 and will likely have 218 co-sponsors by the end of this week.
The letter singled the the estate tax out as “especially pernicious” among those set to increase in January, saying, “Passing a full repeal bill will firmly align conservative grassroots activists and members of Congress around a 0 percent death tax — one of many important priorities in any comprehensive tax reform plan.”
“Moreover,” the letter reads, “a national surge towards repealing the death tax is being seen across the country in many state legislatures.” (RELATED: As Obama touts Buffett tax, progressive ‘death’ tax comes under national siege)
“With nearly half the chamber already signed on to the bill,” it continues, “it would be a shame to fail to hold a vote on this important issue during this Congress.”
“In addition to the vote to extend current tax policy this month — which we fully support — our coalition of industry groups, the freshman class, and a large contingent of Republican Study Committee members are requesting that House leadership call a vote on Congressman Brady’s bill to fully repeal the death tax this fall,” Schoening Strategies President and Family Business Coalition Chairman Palmer Schoening told TheDC.
“Any fundamental tax reform package,” Schoening continued, “should include removing punitive double taxation from the code entirely.”
The letter comes on the heels of a July 16 letter to leadership from The 60 Plus Association — a non-partisan, conservative activist organization that counts over 7 million seniors as members — saying, “Next year, Congress ought to be able to work together to design a tax code without a death tax.”
60 Plus has already poured millions of dollars into ad buys in swing states this election cycle, pushing back against Obamacare and other laws it says are negatively affecting its members.
“60 Plus is gearing up to make death tax repeal a key issue in major Senate and House races across the country through ad buys and televised campaign events,” 60 Plus Chairman Jim Martin told The Daily Caller. “We are currently mobilizing over 7 million seniors to call for a vote on Congressman Brady’s ‘Death Tax Repeal Permanency Act of 2011′ to put House members on the record for the first time since 2006. Our seniors believe Republicans should always vote to kill the death tax, not wound it.”
In a July 13 letter to House leadership, Republican Rep. Austin Scott, president of the freshman class, vocalized the class’ support for the Death Tax Repeal Permanency Act. In the letter, Scott recognized “that current policy may need to be extended temporarily,” but insisted that the vote be brought to the floor to show voters that the GOP is serious about the repealing the unpopular tax and to “lay the groundwork for future tax discussions.”
“It is important to us, and to our constituents to show that we stand for full repeal of the death tax,” Scott added.
The estate tax is a tax on the property of Americans who have died. It has become a favorite villain for supply-side economists, who maintain that taxing Americans’ savings after they die amounts to double taxation, and removes incentives for saving instead of spending.
Sole proprietorships and other small businesses, they say, lack the tools to protect their assets like their bigger competitors can.
Proponents of the federal estate tax argue that it is an important source of government revenue and a barrier against the development of an American ruling class. (RELATED: Fareed Zakaria: Americans should give half of inheritance to government)