The Ways & Means Subcommittee on Select Revenue Measures today held a hearing on the burden the estate tax, commonly known as the death tax, imposes on family farms and small businesses. Under current law, a 40 percent tax applies to taxable estates of descendants. While there is a $5.4 million dollar exemption from this tax, the value of the assets of many family-owned small businesses and farms could put them over this limit and out of business.

According to a recent Joint Economic Committee (JEC) report, the estate tax is the “overwhelming cause of dissolution of family businesses.” In addition, JEC found that family businesses and farms are far more likely than other estates to face an estate tax liability that exceeds their liquid assets. 

“As a CPA, I have seen first-hand the challenges family farms and businesses in Northeast Ohio face when planning for and paying the death tax. Many have worked hard to build a strong family business with the hope of passing on their success and the opportunity that comes with it to their children and grandchildren,” said Rep. Jim Renacci (OH-16). “Instead of handing over their hard-earned income to a fiscally irresponsible federal government, families should be able to use that money to grow and invest in their businesses. That is why I am proud to support Chairman Brady’s legislation, the Death Tax Repeal Act, because it provides individuals and families with the relief they deserve. It’s time to kill the death tax.”

The Death Tax Repeal Act amends the Internal Revenue Service (IRS) code to repeal the estate tax. It is supported by a number of organizations, including the American Farm Bureau Federation, Associated Builders and Contractors, National Association of Manufacturers, National Federation of Independent Business, Americans for Tax Reform, Club for Growth, National Taxpayers Union, and Family Business Coalition.