Posted on 04 Dec 2009
The Independent Insurance Agents & Brokers of America (IIABA or the Big "I"), commented on the U.S. House of Representatives' passage of H.R. 4154, titled the "Permanent Estate Tax Relief for Families, Farmers, and Small Businesses Act of 2009," which permanently sets the estate tax rate and exemption amount at this year's levels.
As present time, the estate tax has a rate of 45% with a $3.5 million exemption. The estate tax is scheduled to be repealed in 2010 and return in 2011 with a 55% rate and a $1 million exemption.
“We applaud Rep. Earl Pomeroy (D-N.D.) for his efforts to bring attention to the plight of family-owned business and farmers who are deeply impacted by the estate tax,” says Robert Rusbuldt, Big “I” president & CEO. “Although H.R. 4154 is a good step in the right direction, more is needed. The Big ‘I’ believes now is the time for Congress to significantly reform the estate tax to encourage investment and growth in small business. This reform should come in the form of a decrease in the estate tax rate and/or increase in the exemption amount and should be indexed for inflation for the future.”
Earlier this year, the Big “I” and its coalition partners, over forty business trade associations that formed the Family Business Estate Tax Coalition, voiced their support for a bipartisan amendment sponsored by Senators Blanche Lincoln (D-Ark.) and Jon Kyl (R-Ariz.) that was passed by the Senate during consideration of the congressional budget. The Lincoln/Kyl amendment would reduce the top rate to 35% and increased the exemption to $5 million. Unfortunately, the amendment was non-binding as are all amendments considered during congressional budget proceedings. The Big “I” hopes the Senate will adopt the Lincoln/Kyl amendment and provide relief to family-owned small businesses across the country.
“The estate tax disproportionately impacts small and family-owned businesses that serve local communities and fuel our economy,” says Charles Symington, Big “I” senior vice president of government affairs. “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.”
Founded in 1896, the Big “I” is the nation’s oldest and largest national association of independent insurance agents and brokers, representing a network of more than 300,000 agents, brokers and their employees nationally. Its members are businesses that offer customers a choice of policies from a variety of insurance companies. Independent agents and brokers offer all lines of insurance—property, casualty, life, health, employee benefit plans and retirement products.