To the Editor:
I want to comment on the recent article by Rep. Warren Davidson concerning the estate tax and his introduction of Protect Family Farms and Businesses Act (H.R.6100).
The article is written to give the impression that millions of small businesses and family farms are subject to the estate tax, or the death tax as he prefers to call it. But he left out some very important facts from his article. First, the current estate tax exclusion is $5.45 million for an individual and $10.9 million for couples. So anyone with an estate smaller than these amounts will not pay any estate tax.
Second, the Treasury Department regulation changes Rep. Davidson’s bill opposes are actually proposals to close a tax loophole that some taxpayers have used for years to understate the fair market value of their assets for estate and gift tax purposes. Less than 10,000 of the largest estates nationwide are subject to this tax and while the top rate is 40 percent, the average rate paid is 17 percent. So it hardly seems that the estate tax would be the cause of the 470,000 annual business failures cited in the article.
So if small taxpayers are currently not subject to the estate tax due to the large exclusion amounts, why does Rep. Davidson imply he is looking out for their welfare? To me it looks like a lot of fancy rhetoric meant only to cover up the fact that he wants to preserve a tax loophole that benefits only the wealthiest families.
Nobody likes paying taxes but if the very richest taxpayers are able to manipulate our lawmakers to pay less, it seems like you and I will be making up the difference. I wish that Rep. Davidson had used this opportunity to accurately inform people about issues instead of omitting important information he does not want us to know.
— Jim Sommer