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As Congress works to preserve pro-manufacturing tax policies, it must also fix the death tax to support family farms and small businesses, Reps. Greg Murphy (R-NC) and Randy Feenstra (R-IA) and NAM President and CEO Jay Timmons wrote in a Washington Examiner op-ed (subscription).

The background: “Under current law, the federal estate tax allows the government to take one more swipe at an individual’s assets upon their death, at a rate ranging from 18% to 40%,” Murphy, Feenstra and Timmons explained. 

• “Unfortunately, this often creates a devastating and immediate burden on families who must assume enormous tax liability due to the transfer of business assets from a deceased family member.”
• Furthermore, many of these family ventures own “expensive and illiquid assets”—like land or equipment—which cannot easily be sold off without damaging or destroying the business.

The problem: “During his first term, through the signature Tax Cuts and Jobs Act of 2017, President Donald Trump excluded more of a family-owned business’s assets from the death tax, easing their tax burden when a loved one dies. This policy is set to expire at the end of 2025, and if Congress fails to act, thousands of additional family-run enterprises may be forced to shut down.”

The bottom line: “While we need to raise revenue to pay for the essential functions of our federal government, we must be intelligent with tax policy. We need pro-growth policies to create job growth, improve wages and increase revenues.”

• “However, we cannot achieve this by destroying family-owned businesses and farms by taxing them out of existence. The death tax destroys local financial engines and the way of life for millions of good, hard-working people.”