The House is now debating H.Res. 1766, the rule for consideration of H.R. 4853, the tax compromise. Opponents have adopted — in some cases, for the first time — budget deficits as their defining political principle, while in the case of the estate tax indulging in some of the most bellicose class warfare rhetoric we’ve heard all session.
The argument against the estate tax compromise, that is, for welcoming the return of the full 55 percent estate tax rate with just a $1 million exemption, boils down to, “Wealthy! WEALTHY! Tax breaks for WEALTHY! Bad! WEALTHY!”
The National Association of Manufacturers has sent a “Key Vote” letter to the House calling for final passage of H.R. 4853. On the estate tax, the NAM’s Executive Vice President Jay Timmons wrote:
[NAM] members have consistently called for repeal or significant reform of the estate tax. We believe that the estate tax language passed by the Senate yesterday, which calls for a 35-percent tax rate and a $5-million exemption, represents significant reform. However, the estate tax provisions included in the amendment offered by Representative Pomeroy do not provide the reform needed to relieve manufacturers from the estate tax burden.
For small and medium-sized manufacturers (SMMs), business owners and families, the estate tax is more than a one-time tax. In a 2009 survey of our SMM members, respondents said they spent, on average, $94,000 annually on fees and estate-planning costs in preparation for their estate tax bill. This is money that could have been used to grow businesses and add jobs. Many small manufacturers and small businesses are seriously and adversely impacted by the estate tax. Higher rates lead to job loss.
The NAM has also prepared a ManuFact fact sheet on the anti-investment impact of the estate tax, AKA the death tax. It includes a fact we have not seen noted elsewhere lately: “According to the Joint Economic Committee (JEC), the death tax costs the economy more than it adds to federal revenues. It has generated $761 billion since 1942 while reducing the stock of capital in the economy by $847 billion. The May 2006 study by JEC, ‘Costs and Consequences of the Federal Estate Tax,’ found no compelling reason to continue to collect the tax and several compelling reasons to reduce or abolish it.”
NAM Key Votes are identified by a committee of NAM member companies of all sizes and are used to determine a member of Congress’ record on manafucturing issues.