At a recent Senate hearing, Finance Chairman Senator Max Baucus made illuminating statements that echo the calls for tax reform in the House of Representatives, while laying out goals for the Senate Finance Committee for 2013.
Senator Baucus wrote, “We need to take a scalpel to waste and inefficiency, not allow a hatchet to hack into American jobs.” He outlined three key goals for the 113th Congress: job creation, simplify the tax code for America’s families and businesses, and return stability and confidence to our economy.
The DOW Jones Industrial average soared on positive economic news on March 5th. This is an encouraging sign of the exuberance that Wall Street is feeling about the economy. But feelings are fleeting. The phrase, “In God we trust, all others bring data,” comes to mind.
Just over a week ago, Senator Baucus in his opening statement to the Senate Finance Committee pointed out that there are twelve million people actively looking for work who are unable to find a job. An additional eight million Americans are working part-time, when they would prefer full-time positions.
America’s small businesses and family farms provide jobs. These employees help to grow businesses. These jobs are at serious risk if 40% of a family business or farm must be sold upon the death of an owner, or if they liquidate to avoid the tax in advance. We need to protect these jobs.
The good news for Senator Baucus and the Finance committee is that the creative spirit and American ingenuity lives. A growing coalition has been working on an out-of–the-box idea that’s gaining mainstream approval, and now has thousands of supporters. Lawmakers and think tanks are intrigued with the idea and are exploring it. This idea is called the ASSET estate tax proposal.
It has indeed been close to thirty years since the last major overhaul of America’s tax code and in many ways the world has changed. But when a Wall Street Fortune 500 announces mass layoffs, the headlines on the following day talk about the company’s anticipated increased stock prices. This is a reward for layoffs, often labeled as “finding more efficiencies” in SEC filings. Contrast that with small business.
Small business is hiring those workers because they are job creators. While both public and private businesses struggle with increased regulation and a growing tax burden, only private businesses face the long-standing threat of losing it all with the death of the owner, and the employees face the loss of their job. ASSET stops that threat immediately, creating a level playing field in the marketplace.
The ASSET solution is both pro-growth and gives America’s family businesses and farm owners the certainty they need to compete and grow, rather than winding down operations or liquidating the business to avoid taxes. The ASSET solution grows the economy.
If the Senate Finance committee wants to make it a priority to return stability and confidence to our economy, then we need to stabilize the job creators. ASSET changes how estate tax is collected and preserves U.S. jobs, eliminates death as a taxable occurrence, and makes it more attractive to pay an estate tax than to pay to avoid it.
The ASSET solution is aligned with the goals of the Senate Finance Committee. It has to be about the math first, and the politics second.