The Realities of the Estate Tax, the Reasonable Compromise

House leadership has pulled the rule for consideration of H.R. 4853, the tax compromise, over liberal Democratic members’ unhappiness with how it would deal with a separate vote on the estate tax. The confusion may delay a final vote on the bill. (Reuters, WSJ blog.)

The delay allows us the opportunity to post the transcript from last night’s PBC NewsHour, which featured a debate over the estate tax between Rep. Kevin Brady (R-TX) and Rep. Earl Pomeroy (D-ND), the chief House backer of the higher tax rates. Brady did a good job of cutting through the rhetoric. Like the manufacturers, Brady supports a permanent repeal of death tax but regards the tax bill’s provisions as a compromise.

REP. KEVIN BRADY: Well, I think the death tax is wrong, and as close to a moral — immoral a tax as we have.

There’s something wrong about family farmers, family-owned businesses working their whole life to build up a nest egg, some of them working generations to do that, and then when they die have the government swoop in and take as much as half of everything that they have earned.

I think the death tax needs to go away permanently. Short of that, I think the common ground that was reached that exempts a lot of our family farms and family-owned businesses and taxes others at a 35 percent rate, that wasn’t created, that number didn’t come up from Washington.

That came from our local farmers, our local small business people, our local newspapers and grocery store owners, who said, if you can’t eliminate it completely, this will allow many of us to survive.

So I think that common ground is what we ought to stick with. And I don’t think 45 percent — I don’t think the government deserves half of what our hardworking Americans spent their life to build up.

And …

I was just given a letter from a fifth-generation Texas rancher, small businessperson. They’re paying — they had to go to the bank twice to pay the death tax on the grandfather’s ranch and now on their father’s ranch. They’re struggling to make ends meet. Five generations, they have worked that soil, and now government wants, again, more of what they have earned.

And so I don’t care whether it affects one or 6,000 or 44,000. That tax is wrong. It needs to go away.

The NAM’s Key Vote letter against the Pomeroy amendment and in favor of the entire bill is here.

Join the discussion 2 Comments

  • Randy Miller says:

    Assume a business or farm worth $10 million. The owner passes away. $5 million is excluded, and the other five million is taxed at 35%, so the tax is 1.75 million. The inheritors receive 8.25 million in equity. If those inheritors fail the business after receiving that much equity, they are incompetent, and the business should pass to someone else.

    Should I tell you about the real farmer who died, leaving a 1.4 million dollar farm to 2 sons who had left Iowa right after they graduated, and did not put one drop of sweat in the farm. Meanwhile, a young couple who had farmed the ground for years, took good care of it, spent time with the old farm couple… inherited nothing.

    Where is the morality in that? Where is the economic sense in that, congressman Brady?

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