Lubbock Times

House Budget Chairman Jodey Arrington has introduced the Estate Tax Rate Reduction Act, a bipartisan proposal aimed at reducing the estate tax by half. The current estate tax rate stands at 40%, making it the highest in the U.S. Tax Code.

Chairman Arrington stated, "The Death Tax is an unfair double tax that could force the next generation to sell their family business - on which they’ve paid a lifetime of taxes - to pay another tax simply because of a family member’s passing." He emphasized that penalizing Americans who work hard and build businesses contradicts the American Dream.

Congressman Sanford Bishop expressed his support for this initiative, saying, "I am proud to join Congressman Arrington on this bipartisan effort to bring fairness to our families with businesses such as farms, funeral homes, radio stations, and others who are crushed by the overwhelming tax that comes at one of the most somber times of their lives – the death of a loved one."

Kent Bacus from the National Cattlemen’s Beef Association also endorsed the legislation: "To ensure the next generation can keep these farms and ranches thriving, we need sound tax policies like the Estate Tax Reduction Act." Tim Lust from National Sorghum Producers echoed this sentiment, stating that keeping family farms within families is crucial for smooth generational transitions.

Currently, much of a family-owned business's value lies in hard assets that must be sold upon an owner's death. This jeopardizes many businesses' ability to survive through generations. Statistics show only 30% survive first-to-second-generation ownership transitions; even fewer make it beyond second-to-third-generation.

Family-owned businesses play a significant role in employment and job creation in America. They employ 60% of the workforce and generate 78% of new jobs. The proposed legislation seeks to reduce taxes on estates, gifts, and generation-skipping transfers from 40% to 20%.