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Independent Community Bankers Pinpoint Estate-Tax and Rate Cuts as Top Priorities
WASHINGTON-- On behalf of its 5,000 members, the Independent Community Bankers of America applaud the Senate passage a budget plan that allows for $1.35 trillion in needed tax relief. "With a sluggish economy, it's now time to quickly detail and pass pro-growth tax relief measures into law," stated David Seim, chairman of ICBA's Tax Committee and the president and CEO of Lubbock National Bank, Lubbock Texas. The ICBA is part of the Tax Relief Coalition in full support of the President Bush's tax relief plan.
Seim noted that "with a trimmed $1.35 trillion available for tax relief, important priorities must be made. Specifically, the ICBA has prioritized two pro-growth tax relief items that should be included in any final tax cut bill, one, a significant reduction in the punitive estate tax, and two, a major reduction in today's steep marginal tax rates."
"Steep estate tax levies that can exceed 55 percent pose a long-term threat to all closely-owned businesses, including community banks and their family farm and small business customers.
ICBA supports preserving the stepped-up-basis on capital gains at death when adopting any estate tax relief measure. Seim also noted that, the Tax Reform Act of 1976 altered stepped-up-basis to carryover basis, but Congress ultimately repealed these rules retroactively in 1980 because of the enormous tax complexity and distortions posed by carryover basis. We simply don't want to see Congress make that mistake again," Seim stated.
ICBA believes cutting today's steep marginal income tax rates is key to getting our economy back on a strong growth path. More than 85 percent of our nation's small businesses pay the individual income tax because they are organized as sole proprietorships, partnerships, LLCs, or Subchapter S businesses. Therefore, cutting the top marginal tax rate from 40 percent to 33 percent would provide significant tax relief to the individual and small business community bank customers. The income tax rate cuts would also bolster the more than 1,400 Subchapter S community banks that pay taxes at the individual shareholder level.