Grassley Urges Death Tax Repeal
WASHINGTON – Repealing the federal death tax is critical to the financial well-being andsurvival of family farms and small businesses, Sen. Chuck Grassley, chairman of the Committee onFinance, said today.
“Family farmers and small business owners live poor and die rich,” Grassley said. “Theirassets are tied up in land, buildings and everything they need to keep things running. When thefarmers or business owners die, their children pay a big penalty to the government on theirinheritance. The product of a life’s work leaches away like seeds in poor soil.”
Grassley’s comments came after a subcommittee hearing at which a series of small businessowners and farmers described the devastating effects of the death tax. President Bush proposesrepealing the tax, and a growing number of members of Congress advocate repeal or reform.
Grassley said the compelling stories of taxpayers make a strong case for repealing the deathtax. Janet and Thomas Lovell of Clear Lake, Iowa, testified about the impact of the death tax on theClear Lake Independent Telephone Co., a 26-employee company that Janet Lovell’s greatgrandfatherfounded soon after Alexander Graham Bell patented the telephone in 1876.
At the death of Mrs. Lovell’s grandparents, the family paid more than $2 million in federaland state death taxes. Mrs. Lovell, her mother and her two sisters are the majority owners of thecompany. They worry about the future. Mrs. Lovell said, “In spite of all of our family’s planningthrough the years, we still don’t know if this company will survive the next estate tax bill when myparents pass on.”
Thomas D. Goodner of Goodner’s Supermarkets in Duncan, Okla., testified that his familyopened a grocery store in 1937 and lived in the back. With five food stores and a restaurant, theynow employ more than 700 people. So far they have paid more than $700,000 in death taxes, andthey expect to be in the 55 percent to 60 percent death tax bracket when Goodner dies.
K.L. Bliss, a third-generation rancher from Sand Springs, Mont., testified that when he dies,his son will have to sell a large portion of the family ranch to pay federal and state death taxes.Grassley said it’s important to remember that diminishing a family farm or small businessimpacts not only the owners, but also the economic well-being of entire communities.
“The people of Clear Lake, Iowa, need the Clear Lake Independent Telephone Co. a lot morethan the government needs to profit from the deaths of that company’s owners,” Grassley said.“People are willing to pay their fair share of taxes, but the government got greedy with the death tax.The death tax has to go.”
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