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Congressman Warren Davidson

Representing the 8th Congressional District of Ohio

Rep. Davidson Introduces Legislation to Stop the IRS’s Unilateral Death Tax Increase

September 21, 2016
Press Release

Media Contact- Alexei Woltornist (202)225-6205

 

Rep. Warren Davidson (R-OH) introduced the Protect Family Farms and Businesses Act (H.R. 6100) to halt the stealth death tax increase, which barring Congressional action could go into effect later this year.
 

On August 4, 2016, the Treasury Department released a proposed rule that would significantly increase the burden of the death tax. Specifically, the rule will hinder the ability of businesses to apply proper valuation discounts for estate, gift, and generation skipping taxes.
 

For the past 25 years, across Republican and Democratic administrations, valuation discounts have been applied to closely held family businesses that do not have a frequently-traded market. The new IRS rule undermines this settled law and effectively increases the death tax by 30% or more on family-owned businesses. One of the industries hardest hit by the estate tax is family owned farms that get passed on from generation to generation - an embodiment of the American Dream.
 

“The Constitution is very clear: ‘The Congress shall have the power to lay and collect taxes.’ The Obama Administration’s proposed tax increase violates what was clearly spelled out by Congress. This increase on the part of the executive branch violates the separation of powers within the federal government by unilaterally changing well-established tax law and practice and rejecting the clear will of Congress” Davidson says.
 

“Beyond violating the separation of powers, it’s simply bad policy which will remove billions of dollars invested into our economy. Family businesses are the bedrock of our economy. Instead of undermining this essential part of our economy in his lame duck presidency power grab, President Obama should be working with Congress to strengthen it.” he continued.
 

In the United States, family businesses generate over 50% of the GDP and employ 62% of the workforce. Of those family businesses that survive, only 30% survive to the second generation, many of them citing financial difficulties in transition.
 

The bill has garnered support from free market and business groups alike [* = letter of support at hyperlink]:

The Family Business Coalition, a coalition of trade associations supporting repeal of the estate tax, supports the Protect Family Farms and Businesses Act, and recently wrote in a letter to the Treasury Department, “The proposed regulations would force even more family business and farms to grapple with the complicated and costly estate tax. Moreover, Treasury’s action does not comport with the will of Congress.”
 

Cosponsors include [* = original cosponsor]

  • Rep Abraham, Ralph Lee [R-LA-5]* 
  • Rep Blackburn, Marsha [R-TN-7]
  • Rep Brat, Dave [R-VA-7]* 
  • Rep Bridenstine, Jim [R-OK-1]
  • Rep Brooks, Mo [R-AL-5]
  • Rep Chabot, Steve [R-OH-1]* 
  • Rep Cole, Tom [R-OK-4]* 
  • Rep Collins, Chris [R-NY-27]* 
  • Rep Cramer, Kevin [R-ND]
  • Rep Davis, Rodney [R-IL-13]* 
  • Rep Duffy, Sean P. [R-WI-7]
  • Rep Flores, Bill [R-TX-17]* 
  • Rep Franks, Trent [R-AZ-8]* 
  • Rep Garrett, Scott [R-NJ-5]
  • Rep Gohmert, Louie [R-TX-1]* 
  • Rep Gosar, Paul A. [R-AZ-4]* 
  • Rep Gowdy, Trey [R-SC-4]
  • Rep Harper, Gregg [R-MS-3]* 
  • Rep Harris, Andy [R-MD-1]* 
  • Rep Hartzler, Vicky [R-MO-4]* 
  • Rep Hudson, Richard [R-NC-8]* 
  • Rep Huelskamp, Tim [R-KS-1]* 
  • Rep King, Steve [R-IA-4]
  • Rep LaMalfa, Doug [R-CA-1]* 
  • Rep Latta, Robert E. [R-OH-5]
  • Rep Love, Mia B. [R-UT-4]
  • Rep Lummis, Cynthia M. [R-WY]* 
  • Rep McClintock, Tom [R-CA-4]
  • Rep Meadows, Mark [R-NC-11]
  • Rep Messer, Luke [R-IN-6]* 
  • Rep Mulvaney, Mick [R-SC-5] 
  • Rep Noem, Kristi L. [R-SD]
  • Rep Palmer, Gary J. [R-AL-6]
  • Rep Shimkus, John [R-IL-15]
  • Rep Tiberi, Patrick J. [R-OH-12]* 
  • Rep Turner, Michael R. [R-OH-10]
  • Rep Valadao, David G. [R-CA-21]
  • Rep Weber, Randy K., Sr. [R-TX-14]* 
  • Rep Wenstrup, Brad R. [R-OH-2]
  • Rep Westerman, Bruce [R-AR-4]
  • Rep Williams, Roger [R-TX-25]
  • Rep Yoho, Ted S. [R-FL-3]*

 

PDF iconProtect Family Farms and Businesses Act.pdf

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