Selective Outrage: President Obama’s 2012 Budget Proposal Demands 45% Death Tax

Most Presidents’ budgets are dry and dull documents that provide a “by-the-numbers” explanation of various policies and their budget impact.

President Obama’s 2012 Budget Proposal, however, deviates from the norm by pointing a finger at Congress for temporarily reinstating the death tax at 35% on estates over $5 million.

It appears that the President is eager for the current estate tax law to expire. Indeed, he plans to “push for [its] expiration in 2012” and “supports the return of estate tax to 2009 rates and exemption levels [45% rate on all assets above a $3.5 million exemption].”

Considering that the tax is hated by 2 out of every 3 of Americans (according to the 2009 Tax Foundation/Harris Interactive poll) and that a bipartisan majority of the U.S. House of Representatives is on record in support of permanent repeal (including multiple Democrats who have signed AFBI’s Death Tax Repeal Pledge), the President’s anger is out of touch with the rest of the country.

And for good reason.

The White House remains committed to a policy that punishes family business owners and farmers, destroys jobs, concentrates wealth, and most importantly from a budget standpoint, is a poor revenue producer.

The President’s heavy rhetoric doesn’t make up for the lack of facts: the death tax is simply bad budget policy.

Tags: 2012 white house budget proposal, budget policy, death tax, estate tax, tax revenue

Wall Street Journal Cites AFBF’s New State Death Tax Report

Does your state impose its own death tax on top of the Federal Estate Tax? Twenty-two states plus the District of Columbia impose either an inheritance tax or a death tax – and some impose both!

The facts on these state death taxes are available in a new issue brief published by the American Family Business Foundation. The Wall Street Journal ran an editorial about the brief in yesterday’s paper.

Between the combined federal and state death taxes, residents in these states can pay top effective rates of up to 45 percent in many cases.

The rates aren’t the only bad part. Many state death taxes have exemptions that are substantially lower than the current Federal Estate Tax exemption of $5 million. For instance, Ohio has an estate tax exemption of about $339,000! In Indiana, the inheritance tax exemption comes to only $100,000.

In both states, it doesn’t take much more than a house and a modest nest egg to potentially trigger the estate tax. A middle class family can work hard and save all their life only to face the state death tax.

Of course, quite a few residents are deciding to move – specifically to avoid their state estate tax. I recently shared new research about Rhode Island’s estate tax and the 100,000 residents who have left for Florida and other states which impose no estate tax.

Rhode Island’s exodus means less productive citizens and less capital to fund investment, charity, and tax revenues.

It’s clear: state death taxes are bad news for the states that impose them.

The good news is that several states, including Indiana, Ohio and Pennsylvania, are working towards repeal. As you read this email, I’m returning from providing testimony in the Indiana State Senate in support of Senate Bill 148. This legislation, introduced by State Senator Jim Banks, will permanently repeal Indiana’s inheritance tax.

You can read my testimony here.

The race is on to repeal state death taxes. May the freest state win!

Tags: state death tax, state estate tax, state inheritance tax

Dick Testifies Before Indiana State Senate

As you read this, American Family Business Institute President Dick Patten is speaking before the Indiana State Senate in support of Senate Bill 148, legislation introduced by State Senator Jim Banks (R-17) to permanently repeal the Indiana inheritance tax.

You can read his testimony here.

Indiana is one of 22 states (plus the District of Columbia) that imposes a state death tax on top of the Federal Estate Tax, in spite of the fact that research shows time and time again: when you tax something, you get less of it. State death taxes result in less high net-worth residents in the states that impose death taxes.

Fortunately, Indiana, has come to realize that its death tax is bad news for its residents.

At the Indiana State Senate, Dick has joined with the representatives of the farming, small business, and taxpayer communities. They know that the future of the Hoosier State depends on attracting and keeping its most productive citizens and their capital. If Indiana continues to impose the death tax, it will find itself suffering the same consequences as Connecticut and Rhode Island (read Dick’s testimony to learn what happened there).

Indiana is actually one of at least three states that understand the cost of state death taxes. Ohio and Pennsylvania are working to repeal their state death taxes too.

The race is on to repeal state death taxes. May the freest states win!

Tags: indiana state inheritance tax, indiana state senate, state death tax, testimony

Obama Supports Death Tax Repeal!

In an blog post on Townhall.com, the observant Chris Fields notes that in his State of the Union address, President Obama shared made a strong case for the benefits of death tax repeal, if not the actual policy.

Chris writes, "in tonight's State of the Union Address, the president made the Right's case for eliminating the Death Tax:

We measure progress by the success of our people. By the jobs they can find and the quality of life those jobs offer. By the prospects of a small business owner who dreams of turning a good idea into a thriving enterprise. By the opportunities for a better life that we pass on to our children."

It doesn't appear that the President has embraced death tax repeal, but at least he wants the right things. Perhaps someone will pass him Dr. Douglas Holtz-Eakin's study and he can see for himself how death tax repeal will help small business owners turn "a good idea into a thriving enterprise" and enable more jobs and "quality of life."

Tags: death tax repeal, obama, state of the union

Ohio Representatives Fight for Repeal of State Death Tax!

Ohio has is now in competition with its neighbor, Indiana, to be the first state to repeal its state death tax. Ohio is one of 15 states (and the District of Columbia) that impose state death taxes.

Ohio State Representatives Jay Hottinger (R-71) and Cheryl Grossman (R-23) introduced HB 3 to repeal Ohio’s state estate tax and grant farmers and small business owners some needed relief.

As you can imagine, AFBI is in full support of the legislation. And we’ve officially endorsed the bill.

According to the latest state death tax research, Rhode Island has lost over 100,000 residents and roughly one billion in capital due to its state inheritance tax.

Connecticut has had a similar experience, as documented by the Connecticut Department of Revenue. Connecticut found that the states without an estate tax produced twice as many new jobs and their economies grew nearly 50 percent more from 2004-2007 than the states with such taxes.

In both cases, high estate taxes actually cost the state revenue, as the lost capital resulted in more lost income taxes than was provided by the estate tax.

Hopefully Ohio will quickly pass HB 3 and repeal the state death tax before Ohio experiences the same loss of people and capital as Rhode Island.

Tags: death tax, farmer, ohio estate tax repeal, small business

Indiana State Senator Fights for Repeal of State Death Tax!

State estate taxes drive people, capital and tax revenue out of the 15 states (and the District of Columbia) that impose them. Fortunately, at least one state is taking a stand.

Indiana State Senator Jim Banks (R-17) has introduced legislation to repeal Indiana’s state inheritance tax. His bill (SB 148) would gradually repeal the state inheritance tax over a period of 5 years, granting farmers and small business owners some needed relief from the unjust death tax.

As you can imagine, AFBI is in full support of the legislation. And we’ve officially endorsed the bill.

According to the latest research, published earlier today, Rhode Island has lost over 100,000 residents and roughly one billion in capital due to its state inheritance tax.

Connecticut has had a similar experience, as documented by the Connecticut Department of Revenue. Connecticut found that the states without an estate tax produced twice as many new jobs and their economies grew nearly 50 percent more from 2004-2007 than the states with such taxes.

In both cases, high estate taxes actually cost the state revenue, as the lost capital resulted in more lost income taxes than was provided by the inheritance tax.

Hopefully Indiana will quickly pass Senator Banks bill and repeal the state death tax before Indiana experiences the same loss of people and capital as Rhode Island.

Tags: death tax, estate tax, indiana state inheritance tax, senator jim banks

New Study: Unmasking the Joint Committee on Taxation

Have you ever considered how much power Congress’ Joint Committee on Taxation (JCT) holds over the future of the estate tax? It’s more than you may realize.

A new American Family Business Foundation study tells the inside story about the JCT and it’s undue influence in tax policy debates.

The JCT is a non-partisan, non-ideological Congressional body that Members of Congress (and the public) look to for honest and accurate estimates of the revenue impact from tax policy changes. Unfortunately, the JCT often relies on economic models that result in incorrect revenue estimates – especially when it comes to the estate tax.

The report offers an in-depth analysis of the JCT’s flawed tax revenue-estimating methodology and the resulting discrepancy between its estimates and the actual tax revenues.  The author, a former Treasury Department official, finds that because the JCT assumes that reductions in the estate tax will have no impact on economic activity, the JCT never considers the possibility that a lower estate tax might enable higher economic growth, and consequently, higher total tax revenues.

As a result, the JCT is effectively an institutional cheerleader in Congress for the death tax. Click here to read the study and learn more.

Tags: death tax, dynamic scoring, estate tax, estimates, joint committee on taxation, revenue, static scoring

Death Tax Steals Rhode Island’s Citizens and Capital

Our friends at Rhode Island’s Ocean State Policy Research Institute (OSPRI) released a study today, looking at the impact of Rhode Island’s state estate tax (paid in addition to the Federal Estate Tax).

The study finds that their state estate tax is causing Rhode Islanders to flee the Ocean State for ones with lower or no state estate taxes. In fact, over 100,000 Rhode Islanders have left over the past 20 years, taking with them roughly $1 billion in capital.

Want to learn more? Read the Daily Caller op-ed I co-authored with OSPRI’s President Bill Felkner or click here to read the study.

Tags: death tax, emigration, rhode island state estate tax

The Inside Story about the Life Insurance Industry's Death Tax Lobbying

Today, American Family Business Institute President Dick Patten published a great op-ed in the The Hill, one of the top-read publications on capitol hill for Members of Congress, their staff, lobbyists, and policy analysts.

Dick explains how the life insurance industry is awash in cash thanks to the death tax and is one of the primary opponents of repeal.

"An estimated 10 percent of life insurance company revenues come from products designed to help customers avoid or minimize estate taxes.

This is why the life insurance industry spends so much money lobbying to save the death tax."

Dick's op-ed is based on the recently-published study, "Life Insurance Cash Cow," that he co-authored with investigative reporter Tim Carney.  The facts published in the study show that the real death tax narrative is not the rich vs. the poor, but the well-heeled and well-connected life insurance lobbyists vs. the family business owners and farmers.

"What [the death tax] really is, however, is a huge check for the life insurance industry. The bigger the death tax, the more the insurers profit."

It's time for Congress to stand up for the American people against special interests and permanently repeal the death tax.

Tags: death tax, estate tax, life insurance industry

Illinois Hits Farmers with Lower State Estate Tax Exemption

Illinois legislators have made it even harder for future generations of farmers to stay on their land, by lowering the exemption which farmers can apply to death tax liabilities.

An article reports that the exemption for purposes of Illinois's state estate tax has been lowered from $5 million to $2 million. While $2 million may sound like a lot to some people, it "would only amount to around 300 acres at today's inflated prices for farmland."

Shawn Valter with the Adams County Farm Bureau says that means children of today's aging farmers may have trouble staying on or keeping the farm.

Valter said, "Having that lower exemption may mean they have to sell off some acreage to meet the tax obligation now."

Illinois farmers deserve better. The best thing Illinois legislators could do for farmers is to repeal the state estate tax altogether.

Tags: death tax, estate tax, farming, illinois, ranching

Idaho politics: Death to the 'death tax?' Crapo pushes repeal

Great article by Senator Mike Crapo (R-ID) today in the Idaho Statesman. Senator Crapo argues that the death tax is both unfair and economically disastrous for the family business owners, farmers and ranches who are forced to pay it:

"High federal taxes should not prevent a family farmer, rancher or other business owner from passing the business they developed onto their children and grandchildren," writes Crapo, R-Idaho. "Penalizing productive heritage undercuts efforts to maintain small businesses and local jobs. We must utilize the next two years to eliminate the Death Tax and advance some tax certainty and fairness for the betterment of families, communities and the U.S. economy."

Read Senator Crapo's full article here: http://voices.idahostatesman.com/2011/01/12/krichert/idaho_politics_death_death_tax_crapo_pushes_repeal

Tags: death tax, estate tax, senator mike crapo

Share Your Death Tax Story and Fight for Repeal!

The 112th Congress has begun and the American Family Business Institute is already in the thick of the 2011 death tax fight!

We released a new study that shows up to 65,000 small businesses and farms could be impacted by the 2011 estate tax law, and have met with key Members of Congress to explain how this tax harms their constituents and urge them to support repeal.

But our work this year will not be limited to the Federal Estate Tax. Across America, state legislatures realize that just because Congress continues to punish business owners with a federal death tax, states don’t have to add fuel to the fire with state estate taxes.

In fact, Indiana, Rhode Island and Ohio have already begun efforts to repeal their state death taxes. This is great news for family business owners, farmers, and all friends of the American dream.

As the leader of the national death tax repeal coalition, the American Family Business Institute has been asked to help supply resources and expertise to legislators and activists who are fighting to repeal their state death tax.

You can help.

Nothing makes the case for death tax repeal better than the very real and painful stories of business owners or farmers who’ve been punished by the tax. Do you or someone you know have such a story? If you do, please contact me today!

Not sure what a good story looks like? Visit www.nodeathtax.org/resources/testimonies to read the stories of family business owners, farmers and entrepreneurs who have delayed hiring, sold land and business assets, and in some cases, let go of entire operations due to death tax liabilities.

Share your story and help me educate America about the real costs of the death tax!

Tags: death tax, estate tax, family business, farm, share your story, small business

MUST READ: Seventh Grader Knows why the Best Death Tax is No Death Tax

Is Andrea Hitt a future policy analyst? A family business owner? A Member of Congress?

Regardless of what shape her future takes, Hitt has great potential, as seen in her excellent letter-to-the-editor in today's Chicago Tribune.

Hitt's letter explains how family business owners are often forced "to spend large amounts of time and money to prepare their estates to avoid" the tax, and that many are forced to sell.

Hitt also explains how "the estate tax is adding just another layer of taxes," resulting in double taxation.

Read her letter here, and be sure to look for Andrea when she graduates from college. This gal has a bright future.

Tags: death tax, estate tax, seventh grader

Thoughts and Prayers for Rep. Giffords and the other Victims of Saturday's Shooting

The American Family Business Institute is saddened by the shooting that occurred at Representative Gabrielle Giffords' constituent meeting this weekend. Our thoughts and prayers are with Rep. Giffords, the other victims and their families and with the law enforcement agencies and prosecutors who are responsible for bringing justice to the perpetrator of this horrific crime.

We pray for the safety of all Members of Congress and their staff and hope that in the wake of this tragedy they will continue to be able to hold regular, public meetings with their constituents. The worst thing that could come of this tragedy would be a loss of civic interaction with our elected officials.

We appreciate the bipartisan spirit that many Members of Congress have shown in the wake of the tragedy and we hope that this civility continues to animate Congress's activities in the days to come.

Dick talks Death Tax Facts on Stu Varney's Show

Dick Patten, AFBI's President, appeared on on Stu Varney's Fox Business show this morning to discuss the impact of the death tax on job creation.

Stu, an ally in the death tax fight, asked Dick some pointed questions. Dick explained to Stu and his viewers why the impact of the estate tax is so high. Check out the three minute video below and share it with your friends!

Tags: death tax, estate tax, fox business, small business, stu varney

Merry Christmas and Website Explanation

Merry Christmas, Death Tax repeal allies!

Dick had intended to share a message of Christmas greeting with you last week, but a glitch with our server caused the site to go down for several days. This problem has been resolved, but we are still restoring some old content. We hope to have this resolved in the next few days.

In the meantime, please accept this greeting on behalf of the entire American Family Business Institute team. We hope that you are enjoying time with your family during this holiday season and looking forward to a bright 2011.

Warmest wishes to you and yours!

Senate Passes 35% Estate Tax, Legislation Now Heads to House

Just a few minutes ago the U.S. Senate passed H.R. 4853, the Middle Class Tax Relief Act of 2010, by a margin of 81 to 19.

This legislation will hike the federal estate tax from zero to 35%. Prior to today's vote Senator DeMint introduced an amendment to make death tax repeal permanent. Unfortunately, this amendment was voted down.

The House will vote on the legislation tomorrow. There are some in the House who want to hike the death tax even higher to 45%, as AFBI reported yesterday. The House will likely hold a vote on a 45% death tax amendment prior to voting on the Senate-passed legislation.

If you have not already contacted your Representatives to tell them to vote no on any 45% estate tax, please do so today.

Expect an update tomorrow after the House vote.

Say No to a 45% Death Tax “Deal”!

Yesterday the Senate passed a cloture vote on legislation to reinstate the death tax at 35%, while extending all other tax cuts. A final vote is expected later today. Once passed, the legislation moves to the House.

AFBI believes that confiscating even one-third of a family business or farm is too much.

Now we hear reports that some House Democrats want to reinstate the tax at 45%.

This is unacceptable. It’s time we told Congress "no more games”.

Please click here or dial 1-866-220-0044 to call your members now.

The House leadership is meeting today to discuss their proposal and is expected to vote sometime tomorrow.

Please call your Representative and tell them “NO” on any 45 percent “deal”. Tell them you support permanent repeal, not a reinstated death tax.

Next, please call your Senators. Tell them that if the House passes a 45% deal, they should vote against it.

Thank you for supporting death tax repeal.

Tags: compromise, death tax, estate tax, house, legislation