On Thursday, December 3rd, the U. S. House of Representatives voted to pass H.R. 4154, the bill which permanently sets the estate tax rate and exemption amount at this year’s levels, currently a 45% tax rate with an exemption of $3.5 million. The tax is currently scheduled to be repealed in 2010, and return in 2011 with a rate of 55% and an exemption of $1 million.
Needless to say, Insurance agents are happy about the news. Representatives of the Independent Insurance Agents and Brokers of America (the Big “I”) said family-owned businesses, such as farms and independent insurance agencies are “deeply impacted” by estate taxes.
Speaking on behalf of the Big “I,” Robert Rusbuldt, president and CEO, referred to H.R. 4154 as a “good step in the right direction,” going on to add that insurance agents believe that estate tax reform will encourage investment and growth in small business.
Earlier this year, the Big “I,” along with more than 40 other business trade associations, joined forces under the name of the Family Business Estate Tax Coalition. The group is supporting the bipartisan amendment sponsored by Senators Jon Kyl (R – AZ) and Blanche Lincoln (D – AK) that was passed by the Senate during congressional budget considerations. The Lincoln/Kyl amendment would reduce the top rate to 35%, and increase the exemption to $5 million, but the amendment was non-binding.
The Big “I” is hopeful that the Senate will adopt the amendment. Senior vice president of government affairs, Charles Symington, said, “The estate tax disproportionately impacts small and family-owned businesses that serve local communities and fuel our economy. Without real permanent relief, family-owned small businesses are unable to plan ahead and make important business decisions. Many of these businesses are asset-rich, yet lack liquidity to pay estate taxes when an owner passes away. There is evidence that the estate tax hinders the perpetuation of family-owned businesses because survivors are often forced to sell the business to pay their tax.”