To: outdriving
I'll jump right on that family business comment. I have experienced the same thing in business. A partner leaves with the cash, and you are left with the inventory and accounts receivable for which the partner is due a share.
Your business is the physical assets, not the cash. The governments share is the cash, not anything else, and if your business is large enough the family will not be able to come up with sufficient cash to pay the estate tax and keep the business running.
The estate tax destroys farms and small business. Far better to allow business to flourish untaxed by theft of the estate tax, for the taxes that will be paid every year the business is viable, for as long as it is viable. Easier on the business owner, and far more lucrative for the government in the long run.
6 posted on
10/10/2006 6:40:19 PM PDT by
wita
(truthspeaks@freerepublic.com)
To: wita
"I'll jump right on that family business comment. I have experienced the same thing in business. A partner leaves with the cash, and you are left with the inventory and accounts receivable for which the partner is due a share.
Your business is the physical assets, not the cash. The governments share is the cash, not anything else, and if your business is large enough the family will not be able to come up with sufficient cash to pay the estate tax and keep the business running.
The estate tax destroys farms and small business. Far better to allow business to flourish untaxed by theft of the estate tax, for the taxes that will be paid every year the business is viable, for as long as it is viable. Easier on the business owner, and far more lucrative for the government in the long run."
Your example of a partner leaving a business is irrelevant for obvious reasons. This is not what we are talking about.
If an heir chooses to cash out and run from a family business, similar to the partner in your example, the tax issue is peripheral to the central issue.
If all the family heirs choose to remain in the business as partners, then we are dealing with a 16% average hit for additional taxes according to the article, given a worst case scenario. A solid business could absorb a 16% hit through cash reserves or financing.
If not, the solid business could be sold at a discount as an entity, without dissolving. Then the economy as a whole takes no hit. Only the heirs.
11 posted on
10/10/2006 7:31:46 PM PDT by
outdriving
(Diversity is a nice place to visit, but I wouldn't want to live there.)
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