Restaurants call on House to bury the death tax

(Washington, DC) The National Restaurant Association, today, urged the House of Representatives to repeal the estate tax or "death tax" on behalf of the nation's 844,000 restaurants, many of which are small, family-owned businesses.

The House is expected to vote tomorrow on a bipartisan bill, sponsored by Rep. Jennifer Dunn (R-WA) and Rep. John Tanner (D-TN), to eliminate the death tax. The death tax impairs or destroys family-owned businesses when they are transferred to a family member after the death of the owner. Repealing the estate tax is a component of President Bush's tax plan, which the National Restaurant Association strongly supports.

"The elimination of the death tax has long been a priority of the National Restaurant Association," said Steven C. Anderson, president and chief executive officer of the National Restaurant Association. "Many of the nation's 844,000 restaurants are small businesses that run on the hard work and dedication of families who plan to take over the businesses. This unfair and punitive tax takes away the promise that the businesses will be there for the next generation. We urge the House to kill the death tax."

"My family has owned the same restaurant for almost 42 years," said Van Eure, Association Board member and owner of The Angus Barn Restaurant in Raleigh, NC. "My deceased parents certainly paid their share of taxes in order to have this business. The estate tax is unfair since these taxes have already been paid during one's lifetime. It seems like punishment for working hard all of your life and passing your business on to your children, which is the American way."

"When our restaurant, which has been in our family since 1935, is passed on to me, I will be forced to take out substantial loans to keep the business in the family," said Richard Kubach, Association Board member and president of Melrose Diner in Philadelphia, PA. "What I worry about the most is that when something happens to me, after I inherit the business, my children, who are working in the business, will look at paying these taxes once again. Their future, along with the jobs of our employees, some of whom have worked here for 40 and 50 years, could be in jeopardy if the business is unable to maintain the burden of all this debt."

Currently, those inheriting a restaurant or other business must pay the government up to 55 percent in taxes-in cash-on all assets, including land, buildings and equipment, among other assets. Because estate taxes are unreasonably high, many heirs who cannot afford to pay them are forced to sell their business, or liquidate their assets. The Dunn/Tanner bill would repeal the estate tax through rate reduction over 10 years.

The Death Tax Elimination Act passed Congress last year, but former President Clinton vetoed the bill.