Estate Tax Death Again Urged

March 16, 2001

Repealing the federal death tax is critical to the financial well-being and survival of family farms and small businesses, according to Sen. Chuck Grassley (R-IA), chairman of the Senate Committee on Finance. "Family farmers and small business owners live poor and die rich," Grassley said. "Their assets are tied up in land, buildings and everything they need to keep things running. When the farmers or business owners die, their children pay a big penalty to the government on their inheritance. 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 business owners and farmers described the devastating effects of the death tax. President Bush proposes repealing the tax, and a growing number of members of Congress advocate repeal or reform. Grassley said sories of taxpayers make a strong case for repealing the death tax.

Janet and Thomas Lovell of Clear Lake, Iowa, testified about the impact of the death tax on the Clear Lake Independent Telephone Co., a 26-employee company that Janet Lovell's great- grandfather founded 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 federal and state death taxes. Mrs. Lovell, her mother and her two sisters are the majority owners of the company. They worry about the future. Mrs. Lovell said, "In spite of all of our family's planning through the years, we still don't know if this company will survive the next estate tax bill when my parents pass on."

Thomas D. Goodner of Goodner's Supermarkets in Duncan, OK, testified that his family opened a grocery store in 1937 and lived in the back. With five food stores and a restaurant, they now employ more than 700 people. So far they have paid more than $700,000 in death taxes, and they expect to be in the 55-60% death tax bracket when Goodner dies. K.L. Bliss, a third-generation rancher from Sand Springs, MT, 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.

"Our ranch is more than just a business or a home; it is a lifetime commitment by past, present and future generations," said Bliss, "We have worked hard all our life on this ranch. Hard work should be rewarded, not penalized. This is my reality, but could become my son's nightmare if the death tax is not eliminated."

Bliss testified on behalf of the National Cattlemen's Beef Association and exemplified many cattle ranchers across the country, said NCBA. He emphasized the essential re-investment expenses his ranch operation incurs. The "death tax" drains resources from the operation that need to be used for environmental management programs to improve the land, new equipment and herd management practice.