Hatch Statement on Senate Democrats Bringing Death Tax Back to Life
TO: Reporters and Editors
FROM: Antonia Ferrier and Julia Lawless for Senate Finance Committee
Ranking Member Orrin Hatch (R-Utah)
RE: UPDATED: Senate Democrats: Bringing Death Tax Back to Life
DATE: Tuesday,July 24, 2012
If Senate Democrats’ small business tax hike plan weren’t economically destructive enough, they’ve revised it in what appears to be a desperate attempt to take more of the American people’s hard-earned money by bringing the death tax on family farms, small businesses, ranches and estates back to levels not seen in over a decade, when this insidious tax was brought down on a bipartisan basis. What the Democrats are proposing would increase the death tax from its current rate of 35 percent today up to 55 percent - increasing the number of estates hit from 3,600 to 55,200, according to an analysis by the nonpartisan Joint Committee on Taxation (JCT). Amazingly, this proposal is worse than what President Obama proposed in his budget that would have allowed an estate tax exemption of $3.5 million and a top estate tax rate of 45 percent. Remember, Americans work all their life paying income taxes, property taxes, sales taxes – only to have the government raid their farms, ranches, and small businesses when they pass away
“Let’s be clear about what happened here. The ink was barely dry on the Democrats’ first tax hike bill, when they realized it did not raise taxes on small businesses enough. So they went back to the drawing board and decided to hit them again with a massive increase in the death tax,” said Senate Finance Committee Ranking Member Orrin Hatch (R-Utah).
How badly would the Senate Democrats’ death tax hike hit farmers, ranchers, small business owners or those with taxable estates? According to the Joint Committee on Taxation’s analysis, in 2013:
24 times more farming estates would be hit with this massive death tax hike
13 times more small businesses would be hit with this massive death tax hike
15 times more taxable estates would be hit with this massive death tax hike
With the Democrats’ decision to jack up the death tax, the fiscal difference between the Hatch-McConnell and revised Reid proposal is only $51 billion – Hatch-McConnell has a $301 billion score versus the revised Reid plan with a $250 billion score.
This massive death tax hike is on top of the massive small business tax increases already in the legislation. According to Ernst & Young, raising taxes on the top two marginal tax rates would shrink the economy by 1.3 percent and shed 710,000 from the American workforce.
In contrast, the Hatch-McConnell proposal would freeze current estate tax levels that President Obama supported in December 2010, while blocking the President’s small business tax hikes by extending all existing tax policy enacted in 2001 and 2003 through the end of 2013 during which time the Senate Finance Committee would undertake comprehensive tax reform.
Lastly, the Reid plan only includes a one-year AMT patch through the end of 2012, whereas the Hatch-McConnell plan includes a two year AMT patch through the end of 2013. In order for JCT to do an apples-to-apples comparison of the two proposals, they scored them based on a ONE YEAR AMT patch for both, thereby reaching $301 billion for Hatch-McConnell and the $250 billion for the revised Reid proposal.