To begin, the Pelosi-Rangel tax increase would bring the death tax back to life. Since 2001, the death tax — one final bill from Uncle Sam, demanding that the deceased pay a tax on property left behind — has been gradually phased out until its elimination in 2010.
Rather than permanently killing the death tax, however, the Pelosi-Rangel plan revives it. The death tax is particularly harsh on small businesses and family farms, and by bringing it back, Congress is placing a target squarely on the backs of these critical job providers.
That’s because resources that could be used to expand a business or hire new employees are instead used inefficiently to plan for the effect of the death tax. In fact, the Heritage Foundation estimates that the tax costs our economy between 170,000 and 250,000 jobs annually.
Small businesses would not only suffer the effect of the death tax, but many also would be hit with a new “surtax” on top of standard taxes already paid to Washington and would lose a key manufacturing tax deduction that reduces their annual tax bill.
Indeed, for businesses large and small, under the Pelosi-Rangel plan, our nation would be placed at a competitive disadvantage against global counterparts that have fairer, simpler tax structures.
And the record job creation we have seen over the past four years — 8.1 million new jobs since August 2003 — would be brought to a screeching halt. Simply put, the Pelosi-Rangel tax increase would be a job killer.
There is a better way. Instead of raising taxes on already overwhelmed families and small businesses, Members of Congress of both parties should work together to permanently repeal the onerous alternative minimum tax, make the 2001 and 2003 tax cuts permanent and make the tax code fairer and simpler.
Republicans stand ready to work with our counterparts in the majority to both strengthen our economy and protect family budgets.