Virginia the latest state to abolish death tax - Washington next?

Contact: Carolyn Logue, NFIB (360)786-8675

Bipartisan action follows on heels of 24 other states in past two years

OLYMPIA, Wash., Oct. 4, 2006 - Virginia became the latest state to offer Washingtonian a better place to die, when it abolished its death tax last month.

In the end, the cost to the state's economy of losing small businesses to nearby locales became much more expensive than the money the tax brought in to government coffers. As reported by the Wall Street Journal, "Democratic Governor Tim Kaine and the Republican-controlled legislature struck a deal to abolish the state's estate tax, effective July 1 next year. The tax only brings in about $140 million a year to Richmond from several hundred estates, but the levy has made it harder for Virginia to compete for small businesses and retirees with Florida and the 24 other states that no longer have a death tax."

Congress abolished the federal death tax for 10 years in 2001, but it allowed states that had their own ties into it to take a tax credit, which expired in 2004. Since that time, two dozen states have abolished their death taxes, leaving Washington one of only five states remaining with a stand-alone death tax.

"Virginia and the other states that have been tripping head over heels to abolish their death taxes are not doing so in order to please a few rich people, but are acting to stop their own small-business owners and retirees from leaving, which should put to rest any argument that only the rich benefit," said Don Brunell, president of the Association of Washington Business.

"What is sad in all this is that Washington beat almost all other states to the punch 25 years ago when an overwhelming majority of voters eliminated the state death tax by initiative," added Brunell. "Our own supreme court ruled unanimously that the state Department of Revenue had been illegally collecting it since 2001. Now, surviving family members of a small business are staring down the barrel of a nearly 70 percent death tax when combined with the federal tax, which is why such Main Street enterprises as Services Group of American recently packed up and moved to Scottsdale."

More information is available at www.yeson920.com.