AWMA submitted testimony to the U.S. House of Representatives Subcommittee on Economic Growth, Tax, and Capital Access as part of a hearing on May 31 on the estate tax. The Subcommittee held the hearing to determine the impact of the onerous estate tax on family-owned businesses, especially with the threat of a return to the 55% rate and $1 million exemption if Congress does not act by the end of this year.
AWMA was invited to submit testimony as part of the hearing record to outline the devastating impact the estate, or “death” tax, is having upon our industry and the many family-owned businesses in our association. AWMA has made the repeal of the estate tax a top legislative priority over the years – including showcasing this issue as part of our annual AWMA Day on the Hill lobbying event. However, while AWMA continues to support a full and permanent repeal of this burdensome tax, we understand that full repeal may not be possible in this current political environment.
For this reason, we also promote the interim solution of maintaining the 35% rate and a $5 million exemption. The estate tax is frequently cited as one of the most pressing issues for small businesses and rightly so. The current estate tax provisions – providing for a maximum estate tax rate of 35% and an exemption of $5 million – is set to expire on December 31, 2012 if Congress does not act. The rate will revert to the pre-2001 levels – a 55% rate and a $1 million exemption - one of the steepest rates in the tax code.
In AWMA’s testimony, President & CEO Scott Ramminger points out that small businesses are the “cornerstone of a strong economy” and that the current uncertainty surrounding this issue is costing jobs and economic growth in this vital sector. AWMA further asserts that the estate tax is having a deleterious effect on current business decisions with “critical resources being diverted away from investing in people and growth” and being instead “spent on attorneys, accountants and insurance to assist in the needlessly complicated estate tax planning.” -- Anne Holloway, vice president, government relations
You may view AWMA’s testimony here