Pete Sessions: “I thank the Chair. So these large corporations are never impacted by estate taxes, but they are competing with smaller…”

“I thank the Chair. So these large corporations are never impacted by estate taxes, but they are competing with smaller farmers, smaller timber producers, and smaller landowners. Whenever a family member in one of those privately held companies dies, they get whacked by the Federal Government with a tax. It makes them less competitive. In my State of Alabama, we have seen an extraordinary number of banks go out of business by selling out to larger banks. Small, closely held banks no longer exist today. One of the main reasons is that the family sits around the table and wrestles with what they are going to do about the future. They get an offer from a big holding company to buy them out. They consider how much in taxes they are going to have to pay and how they are going to keep the bank going while paying 55 percent tax on it. They end up selling out, and then we get bigger and larger corporations with more and more concentrations of wealth and less competitiveness in the American economy. We need and desire more smaller motel companies. We need more small entrepreneurs. We need more stores selling material, like Home Depot or Wal-Mart. But those stores, if they are closely held, end up getting whacked in each generation by an estate tax. I talked to a young man and his father. They had four motels. He told me they were paying $5,000 a month for insurance on the father's life, trying to make sure that if he were to die, they wouldn't lose their investment.”