Jun 12, 2002
Washington, DC — June 12, 2002 — “The Senate’s failure today to make estate tax repeal permanent stymies family businesses from making plans for growth, job creation and investments in new technologies,” said Tim Hammonds, president and CEO of the Food Marketing Institute (FMI) and chairman of the anti-estate tax coalition Americans Against Unfair Family Taxation.

He issued the statement after the Senate fell short of the 60 votes needed to ensure approval of a bill to make permanent the repeal measure, which is due to expire Jan. 1, 2011.

“Family-owned companies today must face the uncertainty that the estate tax will be reinstated in 2011 with rates as high as 60 percent for estates worth $10 million or more. A single new supermarket today is worth $10 million to $20 million. That money, however, is tied up in bricks, mortar, computers, inventory, trucks, refrigerators and other systems. Facing a 60 percent tax, family food retailers cannot build new supermarkets, hire more employees or upgrade technologies.

“Instead, they have to pay estate tax planners thousands of dollars to minimize the fiscal impact, take out special insurance policies to cover the liability and decide which assets to sell to pay this reprehensible tax. In some cases, they must sell the entire business when the owner dies.

“What opponents don’t understand is that estate tax repeal does not shelter assets from taxes. Capital gains taxes are still due whenever the assets are sold. But in this case, the rate is the 20 percent capital gains tax, and the business owner — not the coroner — decides when to pay it.

“Killing the estate tax altogether would benefit the more than five million family businesses and households whose livelihood is threatened by this tax. And it frees those billions to stimulate the economy at a time when we need it most. We will continue our quest to kill America’s most unfair tax, and we are confident that ultimately we will prevail.”