- The Washington Times - Wednesday, June 28, 2006

Congress is preparing for the final step toward enacting legislation that will reform the estate tax and forever protect the small business owner. The bill protects 99.7 percent of all estates while lowering the tax rate for the remaining families. The bill is a compromise and one that had strong bipartisan support in the House of Representatives. The spirit of compromise is a linchpin of our democracy. Our Constitution, which created a government for the people and by the people, was a compromise. Many legislative victories Congress has delivered in the past six years have been the result of compromise.

Since 2000, the U.S. House of Representatives has voted in a bipartisan manner to completely repeal the estate tax that amounts to double taxation on America’s small business owners, farmers and ranchers. However, the U.S. Senate has been unable to approve any of these bills, including another attempt last month. Recognizing this deadlock, on June 16, the Senate Majority Leader publicly asked the House to “send a bill to us that would be a permanent solution to the death tax.”

Congress had a choice: Make yet another political statement or compromise to make law. On June 22, Republicans and Democrats in the House of Representatives chose the latter ? by voting to provide estate tax relief for 85 percent of those who would otherwise have to pay it under current law. This compromise legislation is a vast improvement over the alternative ? doing nothing and allowing the death tax to revert to a punitive 55 percent top rate in 2011 and beyond. For many families that own a restaurant, a grocery store or have carefully saved over a lifetime for their children, death would be a taxable event. Instead, the House of Representatives overwhelmingly passed legislation last week that would ensure all estates up to $5 million would never face the estate tax. After that, a progressive structure would tax estates at 15 percent up to $25 million and 30 percent for larger estates.

Despite the House of Representatives’ long-standing desire to permanently and completely repeal the estate tax, it has become clear that it is time to compromise to be able to make law. A “do-nothing option” would negatively affect our country. A study by Congress’ Joint Economic Committee in May year stated that there are a number of reasons to reduce the estate tax because it impedes economic growth, kills family-run businesses, hinders upward mobility, and is an inadequate tool to fight inequality. And, many of the nation’s small business advocacy groups, including the National Federation of Independent Business and the National Association of Manufacturers, have come out in support of this legislation.

Currently, there is an opportunity to reform the estate tax and provide beneficial tax relief. The House has done its part. Now, it’s up to the Senate. It is my hope that the spirit of compromise prevails.

Bill Thomas, a Republican member of the U.S. House of Representatives from California, is the chairman of the Ways and Means Committee and chief sponsor of the Permanent Estate Tax Relief Act of 2006.

Copyright © 2018 The Washington Times, LLC. Click here for reprint permission.

The Washington Times Comment Policy

The Washington Times welcomes your comments on Spot.im, our third-party provider. Please read our Comment Policy before commenting.


Click to Read More and View Comments

Click to Hide