Death Tax (Senator Kyl Amendment to H.R. 622)
February 1, 2002
To Members of the United States Senate:
The U.S. Chamber of Commerce – the world's largest business federation, representing more than three million businesses and organizations of every size, sector and region – urges you to vote in favor of an amendment, sponsored by Senator John Kyl, to H.R. 622, the economic stimulus bill, that would make permanent the death tax repeal provisions enacted last June as part of the landmark Economic Growth and Tax Relief Reconciliation Act of 2001.
The business community has long recognized that the death tax needs to be permanently repealed. It is an inefficient, distortive tax that discourages saving, investment and job growth, unfairly penalizes small businesses and family farms, and raises a relatively small amount of revenue for the federal government. This tax is highly confiscatory, and its compliance, planning and collection costs are also very high. It not only hurts entrepreneurs, but their employees and surrounding communities as well, because it usurps capital that could otherwise be used to expand these businesses or keep them viable. It can threaten the very existence of the businesses themselves, and may result in loss of jobs when businesses liquidate assets to pay the tax bills.
While the $1.35 trillion tax relief package enacted last term temporarily phases down the death tax and abolishes it for one year, a more lasting solution is needed. Unless the one-year repeal of the death tax is made permanent, this oppressive tax will return at full strength after 2010. Temporary legislation does not provide the certainty that is needed to efficiently transition businesses from one generation to the next.
Enactment of a stimulus package containing this amendment would eliminate the death tax for good, thereby encouraging business expansion and economic growth. Again, we urge you to support this vital amendment. The Chamber will include votes on or in relation to the Kyl amendment as key votes in our annual "How They Voted" ratings for 2002.
R. Bruce Josten
Executive Vice President, Government Affairs
U.S. Chamber of Commerce