Sen. Orrin Hatch seems to be changing his tone on the repeal of the death/estate tax. Roll Call recently quoted the Senate finance chairman as saying, “I don’t think there’s the stomach to do a full repeal.” This new perspective runs contrary to remarks the senator has made in the past, when he released a statement acknowledging, “Hard-working Americans who pay taxes on nearly every aspect on their lives — from what they earn to what they buy — are then taxed again upon their death. I’ve heard from farmers and ranchers and small business owners across Utah who fear that they won’t be able to pass along to their children what they’ve worked so hard to build out of fear of the federal death tax.”
Well as one of those business owners, I say let’s be clear, this tax threatens these jobs and businesses. There should be no compromises or half repeals. Destroying jobs by targeting America’s main economic engine — small (and often family-owned) businesses, is bad business, and it’s cruel. These businesses, which are so important to Utah’s economy, will continue to suffer if this tax persists in any way.
We have seen evidence of that across this country. Businesses that have sustained local communities for generations are forced to re-evaluate their futures. Often times, the decision is simple, the cost of staying in business is too high, and as a result, many communities small and large lose out.
The most widely used way of paying off this tax burden is the liquidation of land and other property — the loss of which is devastating to the families who have worked in some instances for multiple generations to cultivate these lands and provide for their families and employees.
It’s not just our business owners who feel this way. The death tax is consistently ranked as the least fair and most unpopular tax in America. According to the Family Business Coalition, nearly three-fourths of Americans believe the death tax should be repealed.
Fear of losing a lifetime of work permeates with the masses, including those not directly touched. Proponents of maintaining the bill will argue that it affects only a very small percent of the population. The truth is, countless employees are impacted. Employees with the hope of building their own companies should look at this tax as a barrier to the American dream. It puts at jeopardy our ability to build a better life for our children.
It’s also bad business economically. America’s death tax is the fourth-highest. Russia, China, Canada, Mexico and Sweden are among the many nations that impose no death tax. The Joint Economic Committee found that the death tax has destroyed roughly $1.1 trillion in capital stock in the economy. Lost capital means fewer jobs and lower wages.
According to the Tax Foundation, small businesses as a whole have been responsible for 60 to 80 percent of all net new jobs in the last decade.The repeal of the death tax will create nearly 160,000 jobs by allowing more capital to be invested in the economy. Ending the death tax would add $119 billion to GDP and boost workers’ income by $79 billion.
Sen. Hatch, the time is now. We should accept no substitute to a full repeal of this burdensome and unfair tax. Please do not harm family businesses and farms. Let’s protect and raise up as an example the successful small businesses and farms that provide for this nation. Let’s make sure they remain viable for our future generations.
Don Bowen is COO of Satori Inc., a Salt Lake City-based hotel construction and renovation company.