July 03, 2013 By Jason Knott
Congress is making another attempt to eliminate the so-called death tax that, due to the high tax liability, can force integrators and other small businesses to sell or close rather than have their children inherit the business.
This is probably relevant to the commercial integration industry in which more than a few companies are family owned.
Two bills - H.R. 2429 introduced by Representative Kevin Brady (R-Texas) and S. 1183 introduced by Senator John Thune (R-S.D.) - would call on the IRS to eliminate Inheritance Taxes and reduce Gift Taxes over a 10-year period.
Small businesses that often declare their business income as personal income are affected by the Inheritance Tax. The bill creates a scale for Gift Taxes between 18 percent for gifts under $10,000 to 35 percent for gifts more than $500,000.
The likelihood is low that the revenue-reducing bills, dubbed the “Death Tax Repeal Act of 2013,” will pass the Democrat-controlled Senate. The introduction of the bills was hailed by the National Association of Electrical Distributors (NAED). The group cites a study from the Congressional Budget Office that says repeal of the death tax would create 1.5 million new small business jobs and cut the nation’s unemployment rate by one percentage point.