Congressman Bob Latta (R-Bowling Green) has introduced legislation that would permanently eliminate the Federal Estate Tax, also known as the ‘Death Tax.’ The Permanently Repeal the Estate Tax Act, would provide needed relief to farmers and small business owners in Ohio and across the country. Latta has introduced the legislation in previous Congresses and was a leader in the Ohio legislature of efforts to eliminate the Ohio Estate Tax.
In sectors that require high capital investments, like agriculture, families often have difficulty meeting tax requirements imposed by the Estate Tax because their liquid assets are much lower than the value of land, property, and equipment. In addition to the costs imposed at death, the Estate Tax also has a stifling economic impact beforehand due to the cost of life insurance and financial preparation needed to plan and comply with the tax.
“The ‘Death Tax’ creates real consequences for our farmers, ranchers, and small business owners,” said Latta. “In addition to the economic effects, many Americans simply find the Estate Tax to be unfair. That money has already been taxed, why should the government get a second bite at the apple when a farmer or small business owner passes away? As part of the Tax Cuts and Jobs Act, we provided needed relief to family farms and small businesses by doubling the amount of assets that are exempt from the tax. However, it’s time to get rid of this tax once and for all.”
Latta’s legislation also ensures that Americans are not taxed on the increased value of an estate by retaining the stepped-up basis at death.
The top Federal Estate Tax rate is currently set at 40%, the third highest in the world. As part of the Tax Cuts and Jobs Act, the amount of assets exempted from the Estate Tax was doubled.
According to a 2015 Fox Poll, 71% of Americans found the Estate Tax to be ‘unfair.’ A report by the Joint Economic Committee found that the tax is responsible for raising about 0.3% of total Federal revenue.