Idaho Congressman Mike Simpson voted today against H.R. 4154, legislation to make the existing estate tax permanent. The estate tax is scheduled for complete repeal next year. H.R. 4154 creates an unacceptable permanent tax rate of 45 percent.
“The bottom line is that H.R. 4154 would impose higher taxes on Idaho’s farmers, ranchers, and small businesses. In the best of times I can’t support increasing taxes on Idaho families, but at a time when unemployment is in the double digits, imposing a greater tax burden on our nation’s job creators is utterly irresponsible,” said Simpson. “Instead of allowing the death tax to expire next year, they have decided to lock in this year’s higher tax rate and lower exemption level without indexing the tax for inflation, ensuring that farmers, ranchers, and small business owners will continue to be penalized when they try to pass on the family business.”
The estate tax, commonly referred to as the “death tax,” places a huge burden on families who want to pass on the family farm or small business. The death tax accounts for less than one percent of the federal budget, but almost one-third of business owners are forced to sell their businesses or liquidate a portion of their assets to pay death taxes.
The tax relief package passed by Congress in 2001 phased out the death tax over ten years, with a one-year complete repeal coming in 2010. Simpson has cosponsored H.R. 3905, the Estate Tax Relief Act, to provide permanent estate tax relief by permanently increasing the estate tax exemption to $5 million per person and reducing the top tax rate to 35%. This legislation is widely supported by agriculture and business groups, who oppose efforts like H.R. 4154 to lock in existing rates.
"Even though the 2010 repeal isn’t permanent, it allows for the opportunity to make long-term, necessary changes to our tax structure to make it fairer for American families,” said Simpson "Unfortunately, rather than taking up broadly supported, significant reforms, H.R. 4154 simply retains the status quo.”