Business Woman Endorses Repeal

Richmond Times-Dispatch
RHODA ELLIOT

My father's goal was to pass on our family business to his kids, and his kids' kids, so they could continue the tradition of providing Richmond families with great food and a friendly environment, while providing jobs for more than 200 people in this community.

Tragically, we almost lost the business once as a result of the death tax when Daddy passed away. If the state continues its current practice of collecting as much as a 16 percent death tax, I don't know how we will continue what Daddy started.

My father founded our family restaurant in 1930. We had one store, located in Richmond, and everyone in the family pitched in. Over time we grew, opening new stores in Richmond, Henrico, Chesterfield, Goochland, and Hanover. Today our chain of restaurants has grown to 10 and we employ 200 Richmond-area residents. Some have been with us for as many as 57 years.

When my father passed, we struggled - but succeeded - in keeping the business alive despite years of nightmares with the government over paying the death tax, which at that time was much higher. Still, Virginia's rate of almost 16 percent for some businesses is outrageous; nearly three times the income tax, nearly four times the sales tax, and nearly three times the meals tax. And the tax is applied on assets that already have been taxed through local property and business taxes and those same state sales and income taxes.

As a small-business woman I know that the death tax affects many more people than some opponents charge. It is not a tax just on the wealthy; it is a tax on hard-working, middle-class families like mine, and it is a tax on the 200 employees who work for our restaurants.

WHILE WE WERE fortunate, others are not. Many small-business men and women are unable to pass their companies on, and are forced to sell, often breaking up the company and laying off employees to pay the tax.

The wealthy are able to pay lawyers and accountants to move their money around - or, in many cases, the wealthy can just move their business to another state that, like Florida, does not have the state death tax.

Repealing the death tax, therefore, has little impact on the wealthiest of Virginians. It applies to those companies, like my family's, that have assets tied up in property, equipment, and salaries.

Until the federal government repealed the death tax it did not make much of a difference. Virginia estates received a dollar-for-dollar reduction in their federal tax bill based on what they owed the state.

But while changes at the federal level reduce, and eventually eliminate, the federal tax, Virginians continue to pay as much as 16 percent. In fact, our actual tax burden has increased over the past two years, and will increase again next year, with the extra tax going to the federal government.

I am told that at least 30 other states have no death tax on the books. Even states with worse fiscal situations than Virginia have decided that the death tax is unfair and that it is poor public policy to grow out of a recession by taxing small-business owners and family farmers.

THE DEATH tax represents about three-tenths of 1 percent of the state's budget. But for families grieving a loss and forced to deal with passing on a business, it can represent as much as almost 16 percent of their assets.

Thousands of Virginians are affected by this tax, as evidenced by the outpouring of support from middle-class and working-class business organizations.

Abolishing Virginia's death tax in the responsible manner in which HB 2490 and SB 1123 passed will protect middle-class family-owned farms and businesses and promote additional investment and job creation. It also will protect women and minority-owned ventures that are often hit hard by the death tax. Ridding the state of this unfair tax will attract businesses, assets, and jobs from other states where death taxes are imposed, and prevent companies and families - those who can - from relocating to other states.

I urge members of the General Assembly who supported repealing the death tax to stand firm against those who would delay this tax relief and look to the small-business men and women and family farmers in their communities for some guidance on this issue, realizing that it is not a tax on the wealthy, but a tax on all Virginians and a tax on our collective prosperity.

Rhoda Elliott is the president of Bill's Barbecue, and past president of the Virginia Hospitality and Travel Association.