For decades, America’s seniors have worked hard to build family businesses, farms, and ranches that provide jobs, support communities, and create opportunities for the next generation. Yet the federal estate tax, often called the “death tax,” has threatened that legacy and thrust the American Dream out of reach for too many.
The death tax does not just affect the ultra-wealthy. While high net-worth individuals and families are often able to hire legal help to navigate the system and avoid steep penalties, working families do not have that luxury. As a result, the death falls the hardest on multigenerational family businesses that are land-rich or asset-rich but cash-poor.
Farms, ranches, and small businesses often have most of their value tied up in property, equipment, inventory, or livestock. When the owner passes away, heirs can face a large tax bill based on the paper value of those assets, even if the business does not have the cash to pay it.
For many families, the result is devastating. Heirs may be forced to sell off land, equipment, or even the entire business simply to cover the tax liability. Generations of work and sacrifice can disappear overnight through no fault of the business owner, but rather as a result of bad tax policy that punishes hard work.
This is why the hard work that President Donald Trump and congressional Republicans put in to pass the Working Families Tax Cuts last year was so important. By increasing and permanently extending the estate tax exemption, the law provides meaningful relief for family businesses, farms, and ranches across the country. The changes protect more than 90 percent of private businesses from the death tax and give owners the certainty they need to plan for the future.
That certainty matters. When families know they will not be hit with a sudden and massive tax bill at the moment of transition, they can focus less on expensive estate planning and more on investing in their businesses, like expanding operations, hiring workers, and serving their communities – in addition to spending time with aging loved ones.
At AMAC Action, which represents nearly two million senior members nationwide, this issue is deeply personal. Within our membership are more than 130,000 small business owners. These are men and women who spent their lives building companies that employ their neighbors and sustain local economies. Many hope to pass those businesses on to their children or grandchildren, continuing a proud tradition of family ownership.
Our late founder, Dan Weber, understood this better than most. Dan ran a family business himself. He knew firsthand the dedication it takes to build something from the ground up and the importance of preserving it for the next generation. He was a staunch opponent of the death tax because he believed no family should be forced to dismantle a lifetime of work simply because a loved one passed away.
The Working Families Tax Cuts move us closer to that vision. By providing permanent estate tax relief, the law helps ensure that America’s family businesses and farms can remain in family hands. It protects the legacies that seniors spent their lives building and allows future generations to carry them forward.
3 Comments