Neal Dunn: “the Democratic substitute is short term fix masquerading as real tax relief. It will not solve the problem. Here is why…”

“the Democratic substitute is short term fix masquerading as real tax relief. It will not solve the problem. Here is why: First, it does not address the high death tax rates. On the first after their $2 million dollar credit, the family is forced to pay taxes starting at a 49 percent rate on every dollar over the credit. For businesses valued at 6 million dollars, this could mean a tax bill approaching 2 million. Under the substitute the U.S. will still have the second-highest death tax rates in the world--behind bastions of free market capitalism such as France and Sweden. Second, every attempt to provide relief from the death tax has been a failure. In 1997, with the best intentions, we fashioned the Qualified Family-Owned Business Exemption as a way of addressing the concerns of small businesses and farmers, but it has not been the solution we envisioned. It is so complicated and onerous that the American Bar Association has called for its repeal. It also has a limited reach. According to Treasury estimates, only between 3 and 5 percent of estates qualify. In short, our experience shows that reform will only prolong the problem. Finally, and perhaps most importantly, the substitute affirms the flawed notion that it is fair and reasonable to tax people at the end of their life. Instead of rewarding them for saving or for building a business, we punish them by assessing a burdensome tax.”