REPS. BISHOP AND ARRINGTON LEAD BILL TO HELP HARD-WORKING AMERICANS BY CUTTING ESTATE TAX RATE

WASHINGTON – This week, Congressman Sanford D. Bishop, Jr., (GA-02) joined House Budget Chairman Jodey Arrington (TX-19) to introduce H.R. 601, the Estate Tax Rate Reduction Act. This bipartisan legislation would cut the estate tax in half and provide tax relief to family-owned businesses. Currently, the estate tax is the highest tax rate in the U.S. Tax Code at 40%.

“I am proud to join Congressman Arrington on this bipartisan effort to bring fairness to our families with businesses such as farms, funeral homes, radio stations, and others who are crushed by the overwhelming tax that comes at one of the most somber times of their lives – the death of a loved one,” said Congressman Bishop. “When Americans have rolled up their sleeves, worked hard their whole lives to provide for their children and take care of their loved ones and built family small businesses that drive local economies and feed our nation, the tax code should be fair and not stand in the way of one generation leaving the next a better life.”

“The Death Tax is an unfair double tax that could force the next generation to sell their family business - on which they’ve paid a lifetime of taxes - to pay another tax simply because of a family member’s passing. Penalizing Americans who work their entire lives, build successful businesses, and seek to pass down a better life to their children and grandchildren is the antithesis of the American Dream,” said Congressman Arrington. “I am proud to introduce bipartisan legislation to cut this punishing and unnecessary financial burden.”

Background:

• The United States currently has the 4th highest estate and inheritance tax among developed countries, just behind France.
• Much of the value in family-owned businesses is in hard assets and must be sold when the owner passes away, thus endangering the ability of a family business to survive between generations.
• Only 30% of family-owned businesses survive the transition from first to second-generation ownership, while only 12% survive from second to third-generation ownership.
• Just 13% of family businesses remain in the family for more than 60 years.
• Family-owned businesses employ 60% of the U.S. workforce and create 78% of all new jobs.
• This legislation would cut the rate for tax on estates, gifts, and generation-skipping transfers from 40 percent to 20 percent.

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