>>How is it to the Govt's advantage to force small business owners out of business?<<
I don't know how we got to that question in this discussion. A better question, IMO, based on my previous comments is, Is it to the advantage of the country as a whole for Government to subsidize inefficient business operations solely so they can continue to be operated by the same family?
I previously said that I thought all citizens should have a death tax exemption of at least 3 million each, 5 million would be better. All citizens should have the same exemption. This is the only fair way IMO. This would give a married couple the ability, if they handle it most effectively, to pass on 6 to 10 million in assets to their children and grandchildren. This would take care of all the small businesses and small farms.
Exemptions of this size would substantially reduce the death tax on owners of the next size level - those with a few million in excess of the exemption. In fact, through lifetime gifts, discounting techniques, and carrying life insurance in a trust or other form protected from the tax, the owners of these larger businesses should be able to avoid substantially all death tax. And owners of businesses or farms worth more than 6 million should be able to afford to pay for the expert help to minimize these taxes. And, at this level any tax paid should be a very small percentage of the value of the business or farm, and should be allowed to be, as it is presently, paid over a long number of years at a favorable interest rate.
Owners of businesses or farms that are worth substantially more than 6 to 10 million should pay death tax on the value of the assets in excess of the exempted amount. (Of course, they should use sophisticated planning to minimize the tax bite.)
I did infer that if owners have a business or farm that is worth more than the substantially increased exemption, which produces so little income that the owners cannot afford to pay someone to help them minimize the tax and cannot pay, if necessary, a relatively small tax over a period of many years, it is better from a national viewpoint that the property be sold to someone who is a skilled operator and can cause the property to contribute more to the gross national product. |
