As part of the Family Business Estate Tax coalition (FBETC), ABC Nov. 15 sent a letter
to members of Congress urging them to pass legislation addressing the estate tax before the end of the year. Barring congressional intervention, the resurgent estate tax rate and diminished exemption would saddle thousands of family-owned businesses with a crippling tax increase.
In the letter, FBETC stated full repeal is the best solution to protect all family-owned businesses from the estate tax and that, at a minimum, the current estate tax policy should be maintained with an exemption level of $5 million and the maximum rate of 35 percent. The coalition also called for the exemption to be indexed for inflation, provide for spousal transfer and include stepped-up basis.
“At the end of 2010, 277 Representatives and 81 Senators, Republicans and Democrats alike, compromised to set the estate tax at its current level,” the letter stated. “Members of the FBETC strongly oppose efforts which would retreat from the bipartisan agreement.”
FBETC also cited a Joint Committee on Taxation estimate that 13 times more families, 20 times more farms and nine times more small businesses will be forced to pay the estate tax if Congress fails to pass legislation extending the current policy. The coalition also noted the exemption level and tax rate for the estate have changed nine times between 2002 and 2012 – creating uncertainty for businesses that renders them unable to make prudent business decisions.
“Ultimately, a permanent solution is needed because without it, there are no assurances that future generations will be capable of sustaining these family-owned businesses and farms,” FBETC wrote. “We look forward to working with [Congress] to address this critical issue as soon as possible.”