PIA joined two business coalitions recently in pushing back on proposals within the forthcoming $3.5 trillion reconciliation legislative spending package; the proposals PIA objects to would lead to major tax increases for small business owners.
The House Ways and Means Committee began considering the package on September 9. It would raise individual and corporate tax rates, increase the capital gains tax, and impose a new “double death tax,” which would raise taxes on small businessowners by repealing the stepped-up basis for capital gains, increasing the tax burden for when they operate, when they are sold, and when they are passed on to the next generation.
Ending the stepped-up basis is of particular concern for small business owners like PIA members, and we stated our opposition to it earlier this year. The stepped-up basis prevents family-owned businesses and farms from being hit with two significant and damaging tax bills when a family member passes away—the capital gains tax on any appreciated assets and the estate tax on whatever is left. Repealing the use of stepped-up basis by imposing capital gains taxes on asset transfers at death would force many family-owned businesses to liquidate assets or lay off employees to cover their tax burden. This new tax would be imposed on top of any existing estate tax liability, exacerbating the financial burden of the death and effectively creating an additional “death tax.”
The combination of raising taxes on individuals and corporations, and imposing a new tax by removing the stepped-up basis, will deliver a devastating blow to small business owners in the future.
PIA has actively opposed the repeal of the stepped-up basis since it was proposed in the administration’s initial blueprint in the spring, and we will continue to do so going forward.
PIA has launched a grassroots action alert pushing back on the troubling tax proposals currently under consideration. Please take a few moments to make your voice heard, and urge Congress to reject these tax increases.