Bipartisan Vote: Governor Should Let The Death Tax Die

Richmond Times-Dispatch
ROBERT MCDONNELL


The General Assembly's strong bi-partisan vote to eliminate the state's death tax in 2005 presents Governor Warner with a remarkable opportunity to show the citizens of Virginia that he is, in fact and deed, a fiscal conservative who will rise above partisan politics to do what is best for our Commonwealth.
But if the Governor has any lingering questions as to why eliminating the death tax is the right thing to do, let me offer him a few of my own reasons for sponsoring this legislation:

President Bush is right when he says that the most effective way to get our economy moving again is to reduce the tax burden on hard-working Americans. We know from experience that lower taxes mean more freedom and opportunity - the freedom to innovate and create jobs and the opportunity for individuals to invest in their own future and that of their children and grandchildren. A growing economy, together with a state budget that invests in our priorities and focuses on the core functions of government, will in time turn deficits to surpluses, as it did for most of the 1990s.

The death tax has a harmful ripple effect throughout our economy. Although legislation passed by Congress in 2001 is phasing out the federal death tax over the next several years, Virginians will continue to pay the state's version of the tax - a tax equal to as much as 16 percent of their estate.

VIRGINIA'S death tax is unfair to everyone who is forced to pay it, but it hits families and small businesses especially hard. Indeed, because of Virginia's death tax, many farmers, small-business owners, and other hard-working citizens who have paid taxes all their lives - and plenty of them - will forfeit another 16 percent of their life's savings to the government when they die.
Taxing the fruits of a life's work punishes effort and dedication; it inhibits investment and entrepreneurship; and, worst of all, it hurts those who make sacrifices throughout their own lives to make a better life for their children. The death tax punishes both sacrifice and success, and that makes it the antithesis of the American dream.

More than 30 other states already are following the federal government's lead and phasing out their death taxes by 2005. If Virginia remains among the minority of states levying this confiscatory tax, it is clear we will lose taxpaying families and job-producing businesses to other states, such as Florida, West Virginia, South Carolina, and California. And when these families and businesses leave, it is not just the death tax revenue that will go with them. Also lost will be income and sales tax revenue, other state and local tax payments, and the taxes paid by their businesses and employees.

As chairman of the Joint Subcommittee to Study and Revise Virginia's Tax Code,
I heard many compelling testimonies at public hearings from hard-working Virginians who have recounted their personal experiences with having to sell family-owned businesses and farms just to pay death taxes. Even when they do not have to sell the business to pay the tax bill, many small-business owners report that the death tax sapped their business of its working capital, making it struggle just to survive, and robbing it of the resources needed to grow, invest, and hire more Virginians. For this and many other reasons, this bipartisan commission overwhelmingly recommended the elimination of this tax.

IN HIS CAMPAIGN, Governor Warner said that he would fight to protect the family farm and our state's open space. At a time when many family farms are disappearing, and pastoral landscapes are giving way to centers of commercial activity, the death tax has an especially pernicious impact. Today, economic forces make survival of a small business challenging enough without the government placing its large thumb on the scale against the small-business owner. Our open space is vanishing too fast already; Virginia's state government should not hasten its disappearance by giving family farm-owners no choice but to sell out to developers.

We in the General Assembly will meet our obligation to balance the current state budget, and we will do it within existing resources. But if we are serious about building a future of expanding opportunity and growing prosperity for the people of our Commonwealth, we must free Virginians from the grip of the unfair, job-destroying death tax. It is the right thing to do for the hard-working small-business men and women who are the backbone of the Virginia economy, and who create the vast majority of new jobs.

Now, if that's not reason enough, the Governor may want to count the votes - 69 in the House and 33 in the Senate from both sides of the aisle - and recognize that a veto is likely to be overturned anyway.

Robert McDonnell represents the 84th District in the Virginia House of Delegates, and is co-chief patron of House Bill 2490, which if enacted would eliminate the state death tax in 2005.