President Bush's 2001 tax reform
package took some of the sting out of the death tax
by gradually increasing the amount of money exempted
from the tax from $625,000 in 2001 to $3 million by
2010 when the tax is formally repealed. But this is
Washington: The same legislation that repeals the
death tax in 2010 restores it (at pre-tax reform
levels) in 2011.
While supporters hail the death tax
as a tax on the rich and opponents deride it as a
grave-robber tax, the tax is really an attack on the
American Dream.
America is known around the world
as the land of opportunity. Millions of Americans
from all walks of life work hard from the time that
they're old enough to hold their first job until they
die to guarantee their children and grandchildren a
better life than they had. They have overcome many
obstacles along the way, building successful careers
and businesses in the process. We applaud their
success as they live, so why penalize these
individuals and their families when they die?
One of the groups hit hardest by
the death tax are the owners of family businesses,
which comprise more than 80 percent of all businesses
in the United States and account for nearly half of
America's gross domestic product.
Common sense would suggest that
national policy-makers should do everything they can
to keep such businesses going, even after the death
of the founder. Yet, the estate tax does the exact
opposite, forcing many first- and second-generation
businesses to liquidate after the death of the owner.
The death tax is a big reason only 30 percent of all
family-owned businesses survive beyond one generation
and only 10 percent survive multiple generations.
The tax is especially harmful to
farm owners and minority business owners, which
provide many young people with the skills and
character needed to excel professionally. It was on
our family farm in rural South Carolina that I
learned the importance of hard work, prudent
planning, time management and doing the right thing.
Millions of others have learned the same lessons in
similar settings.
The estate tax crushes the dreams
of millions of Americans who hope, against all odds,
that their small businesses some day may become the
next Wal-Mart or Microsoft. After all the Walton,
Ford, Hershey, Gates and Rockefeller fortunes grew
from humble beginnings.
Remember, too, that even when the
death tax doesn't force the sale or closing of a
business, it can overwhelm a family with legal and
accounting fees.
Jim Martin is right to call this
tax the death tax: because it is killing what little
hope many American families have to achieve the
American dream.
Before leaving for the August
recess, the U.S. House of Representatives voted
261-163 to repeal the tax permanently. The Senate
will have its chance in the coming months. Let's hope
they do the right thing -- thereby sending a signal
to the world that the American Dream is alive and
well.
Williams, based in Washington,
D.C., is president and chief executive officer of
Black America's Political Action Committee.
