President Obama and Democrats in Congress are tripping over themselves to tout their support for small business tax breaks, but they're not mentioning the automatic tax increase that will hit family-owned businesses hard beginning Jan. 1, AWB President Don Brunell writes in his weekly column.
Unless Congress and the president act, the inheritance or "death tax" will automatically revert to its pre-2001 level of 55 percent of the value of one's estate after a $1 million deduction. "That tax alone often breaks a small business," Brunell writes.
Some may think the tax only targets a small number of wealthy people, but the reality is that the wealth being taxed is in things like equipment, machinery, inventory and factories -- not jewelry and jets.
Even now, the Heritage Foundation estimates that 300,000 jobs are lost each year to the death tax because families have to sell the farm, manufacturing plant or store just to pay state and federal estate taxes.
"During his presidential campaign, Mr. Obama proposed a 45 percent estate tax with a $7 million deduction," Brunell writes. "Now, farmers and small-business owners fear the president will forget his promise in order to collect more tax money for the federal government."