Dreier Votes to Permanently Repeal Death Tax

April 13, 2005

WASHINGTON, DC - Congressman David Dreier (R-CA), Chairman of the House Rules Committee, voted today to permanently extend the repeal of the death tax, which is set to expire in 2010. The Death Tax Repeal Permanency Act of 2005, H.R. 8, was approved with broad bipartisan support, 272-162.

“We’ve been down this road many times before, and it’s time we make the death tax repeal permanent,” Dreier said. “The uncertainty hanging over small business owners and families because of the 2010 expiration is holding back our growing economy. Yes, we are in a strong pattern of positive growth, but making the death tax repeal permanent would make it even stronger. While we stare down the 2010 deadline, Americans are unable to plan beyond it. We need to end this unfair tax once and for all and give the American people the certainty they need to plan for their futures.”

Recent studies have shown that the Death Tax has an especially negative effect on family-owned small businesses because their businesses are a part of their estates. According to the Center for the Study of Taxation, more than 70 percent of family businesses do not survive the second generation, and 87 percent do not make it to the third generation. While a family’s heirs can work to continue the family business, without a permanent repeal of the death tax, the federal government will automatically get 45 percent of the family’s estate when the first generation passes away. Most small businesses would be unable to survive that kind of tax.

Additionally, the Death Tax places a significant burden on job creation in our economy, by forcing businesses to tie up their assets in estate planning and other costs. According to a 2004 estimate by the Heritage Foundation, the Death Tax costs the American economy up to 250,00 jobs per year.