WASHINGTON, D.C. – Congressman Bob Latta (R-Bowling Green) has re-introduced legislation for the 115th Congress 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. 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.
“For too many small businesses and farmers, the death tax is a barrier that makes it difficult to pass on the fruits of their labor to future generations,” said Latta. “Not only that, there are real economic consequences as families are forced to take out costly insurance policies, sell off equipment or land, and reduce the size of their business or farm to ensure that they won’t be harmed by the estate tax in the future. In addition to the economic benefits for Ohio and the nation, repealing this unpopular tax is the right thing to do to stay consistent with our American values of entrepreneurship and hard work.”
The top Federal estate tax rate is currently set at 40 percent with an exemption of $5.45 million in 2016 and is leveled on the assets of a person’s estate when they pass away. Latta’s legislation also ensures that individuals are not taxed on the increased value of an estate by retaining the stepped-up basis at death.