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House rejects motion to move tax cut bill
House
Republican plan to repeal “death tax” scuttled by majority lawmakers
A proposal to repeal a
state tax on assets handed down from one generation to the next was
rejected by lawmakers in the House of Representatives. A motion by House
Republicans to move House Bill 3306, which would eliminate the so-called
death tax, was defeated 53-45.
Eliminating the death tax is part of the Republican legislative agenda,
known as the Commitment to Washington. GOP lawmakers say the tax is too
onerous and can force family businesses to close their doors when the
owner dies.
“We want to protect family businesses in our state, not drive them out,”
said House Republican Leader Richard DeBolt, R-Chehalis. “These families
work hard to build businesses that support their families and create
jobs in their communities. The state taxes their income, they generate
tax on their sales, and their assets are taxes as real property. It
doesn’t make sense to tax them again when the head of the family passes
on. It’s an egregious, unfair tax, and the state does not need to
generate tax revenue from grieving families.”
Prior to 2001, Washington’s death tax, also known as an estate tax, was
tied to a similar federal tax. However, Congress began phasing out the
federal estate tax five years ago, and Washington’s law was never
updated. The state simply continued to collect the tax illegally. When
the courts finally put a stop to collection of the tax, the majority
party in the Legislature promptly passed a bill to reinstate the tax on
estates valued at over $2 million.
“We are fortunate that our economy is generating sufficient general tax
revenue to support a responsible level of state spending without the
death tax,” said
Rep. Gary
Alexander, R-Olympia, who is ranking
Republican on the Appropriations Committee. “We call this a ‘death’ tax
because it could kill off our small family-owned businesses, like
commercial printing shops or other enterprises that have most of their
working capital tied up in high value property and equipment. A tax on
these businesses forces them to sell their assets to pay the tax,
forcing many to close their doors. Our state treasury is healthy enough
for us to do away with the death tax.”
The 2005 Democrat bill that reinstated the death tax tied revenues to
education expenditures. Alexander and DeBolt called the connection
between the tax and schools a political smoke screen intended to make
the tax more difficult to repeal.
“We funded schools before this tax and we can do it after it’s gone.
It’s simply a matter of priorities,” said Alexander.
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For more information, contact:
Brendon Wold, Public
Information Officer: (360) 786-7698
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