Foodservice & Taxes: U.S. House of Representatives Passes Law Repealing DoubleTaxation on Small Business Assets

On behalf of the nation's 900,000 restaurants - many of which are small businesses - the National Restaurant Association praised the U.S. House of Representatives for passing H.R. 8, the Death Tax Repeal Permanency Act of 2005. Also known as “The Death Tax,” this law was enacted in 1916 primarily to raise revenue for World War I, and results in the double taxation by the government on many family assets of small businesses and farms - the greatest source of job creation in America today. Until 2001, those inheriting a restaurant or other business were forced to pay up to 55 percent in taxes-in cash-on all assets, including land, buildings and equipment, among other assets. Because of the unreasonably high tax rate, many heirs could not afford to pay and were forced to sell their business or liquidate their assets. Small, family-owned businesses are particularly vulnerable to the tax, since many owners of these operations have the entire value of their businesses in their estate. More than 70 percent of family businesses currently do not survive the second generation and 87 percent do not make the third generation. It is not surprising that in a recent survey, 89 percent of small business owners favor a permanent repeal of the Death Tax. President George W. Bush has said he will sign the bill if it reaches his desk. Source: http://www.zwire.com