BI-PARTISAN TAX RELIEF FOR FAMILY BUSINESSES INTRODUCED IN CONGRESS
The ASSET Coalition Works to Reform the Estate Tax Payment Method and Save Jobs
WASHINGTON DC – September 18, 2015 – The ASSET Coalition is pleased to announce that Congressman Andy Harris (R-MD) has introduced bi-partisan legislation in the U.S. House of Representatives that will provide a new, innovative approach to remedying the problems many Americans face as a result of the current federal estate tax. The Congressman has worked in tandem with the ASSET Coalition to develop the American Solution for Simplifying the Estate Tax Act of 2015 (“ASSET Act”)(H.R. 3508). The ASSET Act provides a voluntary, simplified method for Americans who face estate taxes to pay a fair share of taxes while they are alive, without any of the distortive, inefficient effects created by the current method of collecting the estate tax. The bill is co-sponsored by Rep. Alex Mooney (R-WV) and Rep. Don Beyer (D-VA).
“I am very pleased to introduce the ASSET Act with bipartisan support so that we can stimulate debate on how to improve a system in which our tax code restricts economic growth and creates substantial inefficiencies,” stated Congressman Andy Harris. “Family businesses and the jobs they create will benefit from the discussion and analysis of the proposal. We hope that with the help of the Joint Committee on Taxation, we can develop a bill that does not increase the tax burden on Americans, but instead simplifies the process and preserves jobs.”
The ASSET Act is designed to be “revenue neutral” for the U.S. Treasury. It relies on a combination of an annual surcharge and capital gains taxes when estate assets are sold to offset any revenues lost by the Treasury when death is no longer a taxable event. The significant innovation of the ASSET Act is that it helps avoid the frequent liquidation of ongoing family businesses or the “fire sale” of farms and ranches that occur when an owner passes away and leaves a substantial estate tax burden. Under the ASSET plan, the deaths of taxpayers who have opted in will not cause the immediate sale of their family business, farm, or ranch because the assets can pass to their heirs without a new tax obligation. Essentially, the ASSET Act is a jobs preservation bill since it will create greater stability for family businesses, some of which have hundreds and thousands of employees. When the heirs eventually sell, the sales price will likely be higher, therefore generating additional capital gains tax revenue for the U.S. Treasury and preventing the dislocation of employees seen when a rushed sale of such assets must take place.
“I think the [ASSET] option is a good one and will indeed provide much needed relief to farm families and agricultural businesses across America, and particularly in Montgomery County and other counties in Maryland where land values tend to be rather high. Such changes to the IRS code will enable families to make transitional plans from one generation to the next while grandparents and parents are living, enabling them to participate and see their wishes fulfilled,” said Lonnie Luther, active member of the Montgomery County Farm Bureau and ASSET supporter.
The ASSET coalition is grateful to Congressman Andy Harris for introducing the ASSET Act and giving more policymakers the opportunity to review the proposal as part of tax reform deliberations this year. The ASSET Act offers a better, simpler approach that permanently prevents the harm caused by the current estate tax to private businesses, farms and their employees.