PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

SBE Council Supports Thune Amendment (S. Amdt. #3106) to Help Save Local Family Businesses and Farms

By at 10 August, 2021, 1:38 pm

SBE Council supports S. Amdt #3106 to S.Con Res. 14, the Fiscal Year 2022 Budget Resolution, introduced by Senator John Thune (R-S.D.)  

SBE Council urges all Senators to vote YES on the amendment. 

This amendment would preserve step-up in basis, which is critical to counter efforts underway in Congress to impose an even deadlier Death Tax  – or, as Senator Thune writes, a new Double Death Tax on family-owned businesses and farms.

Repealing step-up in basis is anti-small business. Doing so would retroactively tax capital gains on income and property passed on to heirs after the owner’s death. Therefore, a person who inherits an asset would be taxed on the full appreciation of an asset, including before they took ownership or control. And by the way, then total assets inherited would be subject to the estate tax, or death tax.

Many small business owners and farmers would be forced to sell the business or farm, or sell off assets, or borrow significant amounts of cash, to pay this crushing tax. This double death tax drives a big stake into the heart of the American Dream.

SBE Council chief economist Ray Keating has outlined 5 Reasons Why Eliminating Stepped-Up Basis Would Be Very, Very Bad for Family Businesses, Entrepreneurship and the Economy.”

As he noted in the piece, the economic impact would be severe. A study for the Family Business Estate Tax Coalition estimated the macroeconomic effects of eliminating the stepped-up basis and found:

● “A significant portion of the burden of repeal of step-up of basis would fall on workers through reduced labor productivity, wages, and employment. Repealing step-up of basis via tax at death is estimated to decrease job equivalents” by an estimated 80,000 jobs annually in the first ten years and 100,000 jobs per year thereafter.”

● Also, “for every $100 of revenue raised by repeal via tax at death the wages of workers would decline $32. That is, the burden of the tax is such that nearly one-third of every dollar of revenue raised comes out of the paychecks of US workers.”

● “Repeal of step-up of basis via tax at death is estimated to decrease US GDP” by $10 billion each year.”

The pandemic has already shuttered hundreds of thousands of small businesses. This action would shutter hundreds of thousands more, and with that millions of jobs and the hopes and dreams of untold Americans.

Please save local family businesses and farms!

Please support S. Amdt. #3106

 

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