Claims that the estate tax could hurt small businesses or discourage entrepreneurs from starting an LLC don’t reflect reality, writes small business owner Jim Amaral in Arkansas’s Baxter Bulletin.
With business owners earning less than $85,000 accounting for 95 percent of all small business revenues, Amaral claims the estate tax would really only apply to a very small portion of the wealthy.
“The estate tax is a boon to small businesses,” Amaral writes. “The estate tax revenue that comes from extremely wealthy families can fund things like small business and student loans so future generations of entrepreneurs have opportunities to secure their own prosperity.”
Amaral points out that estate tax revenues also help pay for infrastructure that many small businesses rely on.
An estate tax requires descendants to pay a one-time tax on property or assets inherited from a deceased relative, including family-owned businesses. The 2010 estate tax was repealed, but is set to return next year.
However, instead of returning to 10-year-old tax rates in 2011, the U.S. Senate is debating the Responsible Estate Tax Act, which would provide a $3.5 million exception per spouse, while taxing larger inheritances at 45 to 65 percent.
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