1 November, the president of “Americans for Tax Reform” (ATR), Grover Norquist submitted a comment to the letter dated US Treasury Secretary Jacob Lew, counteracting the proposed decision, which will lead to an increase in the property tax (or “tax on death,” as it is called).
Under the current tax rules of real estate in accordance with Section 2704 of the Code of Internal Revenue, the fair market value of a share in the family business, which shall be held no current market – is not available on the basis of the test is “ready-seller willing-buyer”. However, the proposed changes would allow the Internal Revenue Service in the future to produce much higher estimates, limiting the use of discounts.
Norquist explained that “for families affected by the tax on the death of the two allowed discounts when determining the value of their property, lack of control discount and lack sold off. The lack of control discount can be claimed when the family has a minority ownership stake in the asset as a result of then a lower cost on the open market in holding the asset. The lack of marketability discounts apply when the asset is owned by the family and can not be easily eliminated due to market barriers.”
ATR said that the new regulation will “rise tax burden for many family businesses at a time when opposition to the death tax is as strong as ever.” He supported the proposed protection of family farms and businesses imposed by the law in recent years in both the Senate and House of Representatives that would prevent the new rules of section 2704, or any future similar positions.
Norquist came to the conclusion that the “death tax harms economic growth.” At a basic level, the Americans know that the death tax is not fair. It is a tax on savings, for which you have already paid taxes on at least once, and perhaps more than once. Those who suffer the most, namely the first and second generation of small business owners, because the really rich can avoid tax through an army of accountants, lawyers and charitable planners.”