Congressman Ed Bryant

On June 6, 2002, the House of Representatives voted to permanently eliminate the estate tax, which is more commonly known as the death tax. This legislation is necessary because opponents of tax relief in the Senate used a technical rule to force all of the tax relief passed last year, including the death tax, to sunset on December 31, 2010.

The death tax is one of the most hated and unfair taxes on the books. The death tax is a form of double taxation. The government taxes hard-working Americans throughout their lifetimes, and then at the time of death, they are assessed another tax on the value of their property. The last thing a family wants to see after a loved one passes on is a bill from the Internal Revenue Service. Unfortunately, according to 2001 tax returns, over 1,700 Tennessee families were forced to pay the death tax.

It is not just the income of the deceased that is taxed, but the whole value of their estate. For instance, a Tennessee farmer may make $35,000 in gross adjusted income a year, and pay about $4,000 a year in federal taxes. When that farmer dies, the IRS takes the value of the land he farms on, the value of his equipment and facilities, and then sends the estate a tax bill that can be in the millions of dollars. For instance, if the value of the farmer's land and equipment is assessed at $4 million, the tax bill would be $1.4 million.

The IRS imposes rates of up to 60 percent of the value of a family business or farm when the owner passes away. In order to pay these enormous tax bills, many families are forced to liquidate assets and sell the businesses and farms that have been in their families for many generations.

According to the National Federation of Independent Business (NFIB), one-third of small-business owners have to sell outright or liquidate a part of their business to pay death taxes. Half of those who must liquidate to pay the IRS will each have to eliminate 30 or more jobs. The death tax is killing the family business. More than 70 percent of family businesses do not survive to the second generation, and 87 percent do not make it to the third generation. If the death tax were eliminated, a clear majority of small businesses would create new jobs over the coming year.

It is time to bury the death tax once and for all. We need to stop forcing families to sell or liquidate the businesses or farms that their loved ones worked so hard to make successful. Something's wrong with the tax code when just as a farmer is drawing his last breath, the Tax Man is drawing up his largest ever tax bill. It is now up to the Senate to take up this important legislation, so that small business owners and farmers alike will be able to plan for their futures.

Congressman Ed Bryant, a Republican, represents Tennessee's Seventh Congressional District.