Reasons for Repeal

Support Family Farmers and Small Business Owners

*The provisions in the budget agreement will repeal the Virginia estate tax on July 1, 2007, resulting in almost of a billion dollars in tax relief in future biennial budgets and representing the largest tax relief measure enacted by the General Assembly since 1998.

*Repeal will preserve family-owned farms and open spaces for future generations by preventing the liquidation of businesses and farms to pay estate tax bills. According to the Joint Economic Committee of the United States Congress, "through 2001, 2.6 million acres of forest land were harvested and 1.3 million acres were sold each year to raise funds to pay for estate taxes."

*Repeal will help relieve the financial burden placed on Virginia's farming community 98 percent of Virginia's farms are family-owned, totaling 48,000 farms whose assets are tied to the land they harvest.

*Repeal will save family farms and small businesses from spending hard earned money on estate tax attorneys and insurance policies, and instead keep tax dollars and jobs in Virginia thereby fostering economic growth and investment.

*Repeal will protect women and minority-owned ventures that are often hit hard by this unfair tax. Studies have shown many businesses spend on average $60,000 a year to plan for and pay the Death Tax; money that could be used to reinvest, create jobs or enhance health insurance benefits for employees.

*Economists in the Department of Planning and Budget assert that capital formation and investment in Virginia will increase as a result of the death tax cut (Virginia Dept. of Planning and Budget Division of Economic and Regulatory Analysis, January 7, 2004).

*Nearly 70 percent of family-owned businesses fail to reach the second generation, and 88 percent fail before the third due in large part to the costs of estate planning, policies and ultimately tax bills.

*Repeal will bring Virginia into conformity with federal law and in line with the more than 30 states that have phased out the onerous Death Tax.