For Immediate Release:  June 24, 2010

Contact: Sonia Blumstein, 205.620.2087 or 

Sonia@PRoactiveSolutionsInc.net

Washington, D.C. – Yesterday Senators Bernie Sanders (D-VT), Sheldon Whitehouse (D-RI), Tom Harkin (D-IA), and Sherrod Brown (D-OH) introduced the misnamed “Responsible Estate Tax Act,” which seeks to impose death tax rates topping 65 percent.

According to the American Family Business Institute (AFBI), an organization representing family businesses, farms, and entrepreneurs, the bill is anything but responsible. Instead, it’s a job killer.

“Reinstating the estate tax ties up capital, hampers small and family business growth and prevents job creation,” says AFBI President Dick Patten. ldquo;On the other hand, repealing the tax saves businesses and creates jobs.”

ON JOBS:

In a study for the American Family Business Foundation, Prof. Antony Davies of Duquesne University found that abo lishing the federal estate tax would create or save as many as 100,000 businesses annually.

In another study, published last year, economist Douglas Holtz-Eakin – former director of the Congressional Budget Office – found that repealing the federal estate tax would free up $1.6 trillion in small business capital and create as many as 1.5 million jobs.

ON SMALL BUSINESS:

The legislation falsely claims that the estate tax will not hurt small businesses by relying on a fictitious definition of “small business” as one which has less than $5 million in total business assets.

The Small Business Administration offers its own definition of small business, which can be as large as 1,500 employees and have $175 million in gross assets – obviously much larger than $5 million.

“In truth the owners of small firms most often pay the estate tax,” says Patten.

According to Congress’ Joint Tax Committee, owners of some 37,000 “closely-held businesses,” 24,000 family farms, 50,000 limited-partnerships and nearly 28,000 “other” non-corporate businesses paid federal estate taxes between 1995 and 2005.

“Instead of twisting the facts to suit their own purposes, Congress ought to be in the business of passing legislation that creates real jobs and jumpstarts our economy, not piling on taxes that snuff out businesses, which are the engines of job growth in America” says Patten.

The death tax was last imposed in 1916 as a temporary measure to provide revenue for the U.S. military’s buildup for World War I. That war ended over ninety years ago, but the estate tax was only just repealed on January 1, 2010. Under current law, the repeal is temporary and the estate tax is scheduled to come back in 2011 at the rate of 55 percent.