NFIB co-leads coalition supporting step-up in basis
WASHINGTON, D.C. (May 25, 2021) – The National Federation of Independent Business (NFIB), co-leaders of the Family Business Estate Tax Coalition, sent a letter to leaders of the tax writing committees emphasizing the importance of continuing stepped-up in basis for family-owned businesses. Over 120 associations joined the coalition letter and a recent study highlights the economic damage that step-up repeal via tax at death would have.
“For family-owned businesses, repealing the step-up in basis provision would cause significant job losses,” said Courtney Titus Brooks, NFIB Senior Manager of Federal Government Relations. “According to a recent EY study, approximately 80,000 jobs would be lost in each of the first 10 years if stepped-up basis were repealed by imposing a tax at death. A new tax like this would be financially hurtful to family-owned businesses. We are glad to see over 120 associations agree and urge Congress not to repeal the step-up in basis provision.”
Repealing stepped-up basis by imposing capital gain taxes when assets transfer ownership at death would force many family-owned businesses to liquidate assets or lay off employees to cover the tax burden. Additionally, it would ultimately increase the cost of capital and cause labor productivity to fall.
The study forecasts that 80,000 jobs would be lost in each of the first 10 years and GDP would decrease by $100 billion over 10 years if stepped-up basis were repealed by imposing a tax on unrealized gains at death. For every $100 of revenue raised by repeal via taxing capital gains at death, $32 would come out of the paycheck of workers.