One of the single most damaging federal policies to family-run businesses and farms throughout Ohio's 7th District, is the estate tax, also known as the death tax. Estate taxes, simply put, are federal and state taxes levied on transfers of assets at the time of a person's death. Assets can be anything from houses and ancestral farmland to furniture and farm equipment. Small businesses and farms are prime targets for the estate tax, despite their position as a vital component of our national economy. According to the National Federation of Independent Businesses, small businesses have accounted for roughly two out of every three new jobs created since the early 1970s.
Many small businesses grow and prosper as they pass through generations of dedicated family members.
Family businesses provide jobs and a way of life for those who invest tremendous time and effort into their operation. But with increasing frequency, family businesses are either sold off or dissolved because of the crushing burden of the federal estate tax. Research conducted by the Joint Economic Committee has identified the estate tax as a primary reason why small family businesses do not survive past one generation. The committee's research also found that as many as 28 percent of the 20,000 small businesses affected by the estate tax between 1990 to 1996 have been either sold or discontinued. To shield themselves from estate taxes, many families spend significant sums on estate planning, litigation, and paperwork.