Rep. Christopher Cox (R-CA) has rallied nearly 200 members of the House to sponsor the Family Heritage Preservation Act (H.R. 86). The bill would eliminate individual estate taxes.
This measure is of particular interest to owners of family businesses, who argue that estate taxes make it extremely difficult for them to pass on their businesses to successive generations. Federal estate taxes can eat up as much as 55 percent of a company's assets, often meaning heirs have to sell the business to pay the taxes on it. According to Cox, the bill's prospects for passage look good in the wake of a Congressional Joint Economic Committee report indicating estate taxes have the potential to cause slowed economic growth, reduced social mobility and wasted productivity.
Tax analysts, however, believe the Cox plan goes too far in its attempt at total repeal. What may happen instead, says Ochsenschlager, is that Congress will pass a partial reduction in the existing tax that would provide at least some relief for family business owners.