There is an oft-repeated quote attributed to Ben Franklin that reads, "Certainty? In this world nothing is certain but death and taxes." Mr. Franklin, I suspect, would be stunned to learn that in America today, he could face both certainties at the same time, his death proving to be an unexpectedly expensive proposition.
The reference is, of course, to the estate tax--aptly called the death tax. Initiated in 1916 to fund the war effort and later embedded in the tax code to prevent concentrated accumulations of wealth by the already-rich, this antiquated law has not fulfilled its intended purpose for some time. It now imposes an undue, unfair, and frankly, un-American burden on families, farmers, and entrepreneurs.
The death tax, which collects up to fifty-five percent of the value of estates when the owner passes away, hinders economic growth and disproportionately hurts those at the bottom of the economic ladder--not just the ‘wealthiest Americans,’ as critics of the repeal are so quick to claim. Often, the death tax forces employers and businesses to downsize, laying off mid- and lower- income workers. And although some businesses in America may be able to endure this tax, for many small businesses, this untimely tax rings their death knell—no pun intended. You would be hard pressed to get even the most outspoken of opponents of repeal to argue that a policy which encourages the failure of small businesses benefits average Americans.
This tax can also destroy family owned farms, the lifeblood of our agriculture industry. These farming families are what we call land-rich but cash-poor—while their estates may be large, all their worth is tied up in land. To pay the exorbitant death tax, many families are forced to sell land or equipment, often crippling their ability to farm at all. Worse still, many farm families borrow to pay off the death taxes owed, only adding to the difficulty of running a sustainable farm operation. Does the United States Senate believe the burdens of rising land prices, volatile markets for their products, and the unpredictability of the weather are not enough for farm families to bear?
Former Senator Rick Santorum is the author of Blue Collar Conservatives: Recommitting to an America That Works.
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