FMI: Senate Vote to Cut Taxes Boosts U.S. Economy, Repeals Estate Tax -- A Half Trillion-Dollar Destroyer of Jobs, Family Businesses

Washington, DC — May 23, 2001 — “Today’s Senate vote to cut taxes — especially to repeal the estate tax and cut the income tax rates — is a great victory for family businesses, providing even more benefits than many people may realize,” said Tim Hammonds, president and CEO of the Food Marketing Institute (FMI).

“Estate tax repeal presents an excellent example of the benefits,” he said, citing recent research that shows continuing this tax would cost family businesses half a trillion dollars over the next decade. The cost includes excess life insurance premiums, estate tax planning fees and payments for the tax itself, according to The Federal Estate Tax: An Analysis of Three Prominent Issues, a study prepared by the CONSAD Research Corporation for FMI.

“That half a trillion dollars is money that otherwise could be reinvested in family businesses in every community in America,” Hammonds said, “Draining investment capital through the Death Tax stifles growth, kills jobs and destroys family businesses, inflicting even more economic damage than the number indicates.

“The Death Tax doesn’t affect just a few wealthy estates. It affects every family business in America, forcing them to pay life insurance premiums and estate planning fees that public companies do not have to pay. This is unfair and unnecessary. Putting that money to productive use would provide an immediate stimulus to the U.S. economy.

Strong Case for Speeding Up Estate Tax Repeal

“This makes a strong case for accelerating repeal of the estate tax,” now proposed to be phased out by 2011. “As pleased as we are with the Senate action, the job is not yet finished. We now urge the House-Senate conferees to speed up repeal in the final tax-cut package.” A conference committee is scheduled to begin work later this week.