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HATCH CO-SPONSORS BILL TO AID FAMILY FIRMS

SHARE HATCH CO-SPONSORS BILL TO AID FAMILY FIRMS

Sen. Orrin Hatch, R-Utah, has co-sponsored a bill designed to help family-owned businesses transfer from one generation to another without crippling estate taxes.

The bill would repeal an estate tax section of the Internal Revenue Code that taxes the entire value of a family business transferred to another generation at rates as high as 55 percent, Hatch said. He wants to return to previous, more favorable laws."Under the old estate tax laws, an aging business owner could give or sell the potential future growth of the business to his or her heirs while still receiving income and keeping a hand in running the company," Hatch said.

"This `estate freeze' allowed a company's future growth to then be attributed to the owner's heirs while the original owner's holdings stayed at their frozen value. When the owner's estate was later passed on to the heirs, only the frozen part of the company would be subject to estate taxes."

He said his bill would reduce estate tax rates from a high of 55 percent to two rates of 15 and 28 percent, and increase the amount of assets exempt from estate tax from $600,000 to $1 million.

"Many families are now forced to sell their companies and assets simply to pay taxes," Hatch said. "Our nation is built on the dream of the family-owned business. We cannot allow our tax laws to destroy this dream."