Relief from the Estate Tax
NFIB has led efforts to provide estate tax relief for America’s small businesses. The estate tax creates a disincentive to expand a business, create jobs, and far too often, literally taxes family businesses right out of the family. Much of the cost of the estate tax occurs before the tax itself is levied. The threat of the tax actually forces small-business owners to pay for expensive estate planning if they want to keep their business in the family.
The Economic Growth and Tax Relief Reconciliation Act of 2001 reduces estate tax rates and increases the exemption every year until the tax is fully repealed in 2010. But Congress didn't finish the job -- the estate tax returns in 2011 with only a $1 million exemption and full 55 percent rate.
Congress and the Administration are preparing to address the estate tax expiration and NFIB will again be leading the effort to provide small businesses with relief from this business and job killing tax.
On April 2, 2009, NFIB expressed its support for the passage of the Lincoln/Kyl Amendment to the 2010 Senate Budget Resolution providing additional estate tax relief. This was considered an official NFIB Key Vote. The amendment provides additional relief from the estate tax by increasing the exemption to $5 million per spouse and reducing the tax rate to 35 percent. The Budget assumed a $3.5 million exemption and 45 percent rate. This additional relief is especially important to help small businesses struggling through these difficult economic conditions.
Small businesses created nearly 70 percent of the net new jobs over the last decade and have traditionally lead the economy out of a recession, but they need the tools to do it. The Lincoln/Kyl amendment will ensure that small businesses keep more of their hard-earned money to invest in their business and build a lasting recovery.
NFIB is pleased that the Lincoln/Kyl Amendment passed in the Senate with bipartisan support. Congress will revisit the estate tax when it considers tax legislation later this year.