IIAA Praises Dunn/Tanner Bill on Estate and Gift Taxes

Thousands of small business owners are supporting a congressional proposal to eliminate the so-called death tax because it will help solidify the future of family-owned businesses, like independent insurance agencies, instead of forcing them to close their doors following the death of an owner, says Independent Insurance Agents of America (IIAA) spokesman Richard Naught, CPCU.

Naught says the 300,000-member IIAA is supporting the Estate and Gift Tax Rate Reduction Act (H.R. 3879) introduced on a bipartisan basis recently by House Republican Conference Vice Chairwoman Jennifer Dunn (WA) and Rep. John Tanner (D-TN). Both serve on the House tax-writing Ways and Means Committee.

In all, 53 House members from both sides of the aisle, including such notables as House Speaker Newt Gingrich (R-GA), Rules Committee Chairman Jerry Solomon (R-NY) and Ways and Means Committee Democratic members Reps. William J. Jefferson (LA) and Karen Thurman (FL), are cosponsoring the tax-elimination proposal.

H.R. 3879 proposes to phaseout estate and gift taxes over a 11-year period beginning immediately. Under the legislation, current estate and gift tax rates would be reduced by five percent each year until they are completely eliminated in 2009.

"This bill is great news for hundreds of thousands of small businesses across the country that are family-owned," says Naught, vice president of Jefferson City, MO-based Naught-Naught Insurance Agency, Inc. "All too often, surviving family members have no choice but to sell the family business after the passing of an owner in order to pay the hefty estate tax bill.

"Estate taxes suck up between 37 percent and 55 percent of the net worth of a family business when an owner dies," continues Naught. "So it's very easy to understand why nearly a third of family-owned businesses fold following the death of a founding owner."

Naught says H.R. 3879 will reverse this alarming trend and at the same time aid the perpetuation of family-owned businesses from one generation to another. "As has been documented time and again, small business is the engine that drives the national economy," he says. "Preserving thousands of small businesses each year will provide a big boost to the national economy and simultaneously protect a way of life for millions of Americans."

IIAA Vice President of Federal Government Affairs Maria L. Berthoud also offered praise for Reps. Dunn and Tanner for their leadership on the estate and gift tax issue. "Elimination of estate and gift taxes is a priority for many of IIAA's family-owned businesses," says Berthoud. "We are extremely gratified that Reps. Dunn and Tanner recognized that this issue needed congressional leadership and stepped forward to marshal this important small-business concern through Capitol Hill.

"The future of many independent insurance agencies is on the line because of unfair estate taxes," says Berthoud. "Passage of H.R. 3879 will guarantee that most of these agencies will survive beyond first-generation ownership."

Berthoud says IIAA will be working with Dunn, Tanner and other interested congressional members and organizations to build support for H.R. 3879 on Capitol Hill and to help get the proposal through Congress as quickly as possible.