To prepare for the opportunities in the year ahead, we have already begun engaging with lawmakers and identifying our champions – including Rep. Mike Kelly (R-PA), who we would like to see take the issue from Rep. Krisi Noem (R-ND) when she leaves Congress at the end of the year, and Senator Rob Portman (R-OH), who is open to taking on our issue if Senator John Thune (R-ND) determines he no longer wants to be the lead in the Senate given that most of his constituents subject to the tax were helped in tax reform.
Meetings were held with all of them last week in DC. Notably, as part of our discussions with lawmakers, we are also raising the idea of reducing the rate of the tax and potentially allowing for a “family business exemption”; we believe this multifaceted approach will allow us various paths forward if repeal of the tax is not achievable.
It is important to note that while 88% of those who file an estate tax return were helped with an increase in the exemption, but 66% of those who pay the tax were not helped. We are also gathering data on family businesses; the jobs they create, the economic activity they generate, and their charitable giving, to support our asks, in addition to an updated revenue estimate from Quantria, engaged by FEUSA. We are also in the process of exploring options to leverage social media to engage with and inform voters about the death tax and build our base of supporters and FEUSA is also in the process of conducting it annual family business survey.
Aubrey Rothrock of Squire Patton Boggs discussed the various legislative opportunities we have this year to achieve additional estate tax reform. These opportunities include infrastructure legislation, legislation to reauthorize the Federal Aviation Administration, and other tax-specific legislation – including tax extenders and legislation to make all of the individual tax provision in last year’s tax bill permanent (including the doubling of the estate tax lifetime exemption). He emphasized that those championing estate tax repeal have made clear that doubling of the exemption is only the first step and remain committed to further reform (lowering of the rate, eliminating the tax, etc.). Looking ahead, Aubrey discussed our continued engagement with other groups that are also supportive of reform, as well as potential obstacles (both practical and political) that we will need to address going forward.
Russ Sullivan of McGuire Woods Consulting also spoke on the politics surrounding estate tax reform, focusing on the Democratic perspective. He noted that while Democrats may not currently be willing to engage, the upcoming midterm election could factor into their decision (especially for those Senators in close races) to engage as Election Day nears. He also highlighted Senate Democrats’ recently-released infrastructure plan, which would largely pay for infrastructure development by rolling back various aspects of the tax reform bill – including reinstating the estate tax exemption to 2017 levels. Thus, while Republicans continue to control Congress and the White House, we should continue to press forward with efforts to reform the estate tax, as we cannot be certain what the political landscape will look like in 2019.
We were also joined by John Porter, Chief of Staff to House Ways and Means Committee Chairman Kevin Brady (R-TX). John discussed this week’s upcoming hearing on tax extenders – which he said will be the first of many hearings on tax policy in a post-tax reform world – and encouraged us to continue engaging with tax-writers. He mentioned that lawmakers simply ran out of time to push through all of their priorities last year and thus remain committed to further improving our tax Code. John agreed with our assessment that there remain various legislative opportunities to achieve reform this year. He also mentioned that while the Committee is focused on technical corrections and regulatory implementation, they are also more than willing to discuss policy concerns – including as relate to the estate tax.
To round out our call, we heard from Frank Luntz, FIL, Inc., who discussed what can happen legislatively in 2018. Though there are certainly challenges in achieving further reforms, Frank agreed that it is possible. Frank encouraged all families to get more involved and “tell their story”; we must have family businesses become more active for legislators to know the true impact the estate tax has or could have on their businesses. Frank is continuing to help us with our messaging – including as relates to the “family business exemption” – and will, along with Squire Patton Boggs and McGuire Woods Consulting, continue to support our advocacy efforts this year.
As I noted on the call, we very much appreciate your continued support and look forward to continuing to work for reform of the estate tax this year.