[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]



 
                    FULL COMMITTEE HEARING ON SMALL


                      BUSINESS AND THE ESTATE TAX:


                 IDENTIFYING REFORMS TO MEET THE NEEDS


                   OF SMALL FIRMS AND FAMILY FARMERS

=======================================================================

                                HEARING

                               before the


                      COMMITTEE ON SMALL BUSINESS
                             UNITED STATES
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

                              HEARING HELD
                            NOVEMBER 4, 2009

                               __________

                 Small Business Committee Document Number 111-054
Available via the GPO Website: http://www.access.gpo.gov/congress/house




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                   HOUSE COMMITTEE ON SMALL BUSINESS

                NYDIA M. VELAZQUEZ, New York, Chairwoman

                          DENNIS MOORE, Kansas

                      HEATH SHULER, North Carolina

                     KATHY DAHLKEMPER, Pennsylvania

                         KURT SCHRADER, Oregon

                        ANN KIRKPATRICK, Arizona

                          GLENN NYE, Virginia

                         MICHAEL MICHAUD, Maine

                         MELISSA BEAN, Illinois

                         DAN LIPINSKI, Illinois

                      JASON ALTMIRE, Pennsylvania

                        YVETTE CLARKE, New York

                        BRAD ELLSWORTH, Indiana

                        JOE SESTAK, Pennsylvania

                         BOBBY BRIGHT, Alabama

                        PARKER GRIFFITH, Alabama

                      DEBORAH HALVORSON, Illinois

                  SAM GRAVES, Missouri, Ranking Member

                      ROSCOE G. BARTLETT, Maryland

                         W. TODD AKIN, Missouri

                            STEVE KING, Iowa

                     LYNN A. WESTMORELAND, Georgia

                          LOUIE GOHMERT, Texas

                         MARY FALLIN, Oklahoma

                         VERN BUCHANAN, Florida

                      BLAINE LUETKEMEYER, Missouri

                         AARON SCHOCK, Illinois

                      GLENN THOMPSON, Pennsylvania

                         MIKE COFFMAN, Colorado

                  Michael Day, Majority Staff Director

                 Adam Minehardt, Deputy Staff Director

                      Tim Slattery, Chief Counsel

                  Karen Haas, Minority Staff Director

        .........................................................

                                  (ii)



                         STANDING SUBCOMMITTEES

                                 ______

               Subcommittee on Contracting and Technology

                     GLENN NYE, Virginia, Chairman


YVETTE CLARKE, New York              AARON SCHOCK, Illinois, Ranking
BRAD ELLSWORTH, Indiana              ROSCOE BARTLETT, Maryland
KURT SCHRADER, Oregon                W. TODD AKIN, Missouri
DEBORAH HALVORSON, Illinois          MARY FALLIN, Oklahoma
MELISSA BEAN, Illinois               GLENN THOMPSON, Pennsylvania
JOE SESTAK, Pennsylvania
PARKER GRIFFITH, Alabama

                                 ______

                    Subcommittee on Finance and Tax

                    KURT SCHRADER, Oregon, Chairman


DENNIS MOORE, Kansas                 VERN BUCHANAN, Florida, Ranking
ANN KIRKPATRICK, Arizona             STEVE KING, Iowa
MELISSA BEAN, Illinois               W. TODD AKIN, Missouri
JOE SESTAK, Pennsylvania             BLAINE LUETKEMEYER, Missouri
DEBORAH HALVORSON, Illinois          MIKE COFFMAN, Colorado
GLENN NYE, Virginia
MICHAEL MICHAUD, Maine

                                 ______

              Subcommittee on Investigations and Oversight

                 JASON ALTMIRE, Pennsylvania, Chairman


HEATH SHULER, North Carolina         MARY FALLIN, Oklahoma, Ranking
BRAD ELLSWORTH, Indiana              LOUIE GOHMERT, Texas
PARKER GRIFFITH, Alabama

                                 (iii)



               Subcommittee on Regulations and Healthcare

               KATHY DAHLKEMPER, Pennsylvania, Chairwoman


DAN LIPINSKI, Illinois               LYNN WESTMORELAND, Georgia, 
PARKER GRIFFITH, Alabama             Ranking
MELISSA BEAN, Illinois               STEVE KING, Iowa
JASON ALTMIRE, Pennsylvania          VERN BUCHANAN, Florida
JOE SESTAK, Pennsylvania             GLENN THOMPSON, Pennsylvania
BOBBY BRIGHT, Alabama                MIKE COFFMAN, Colorado

                                 ______

     Subcommittee on Rural Development, Entrepreneurship and Trade

                 HEATH SHULER, North Carolina, Chairman


MICHAEL MICHAUD, Maine               BLAINE LUETKEMEYER, Missouri, 
BOBBY BRIGHT, Alabama                Ranking
KATHY DAHLKEMPER, Pennsylvania       STEVE KING, Iowa
ANN KIRKPATRICK, Arizona             AARON SCHOCK, Illinois
YVETTE CLARKE, New York              GLENN THOMPSON, Pennsylvania

                                  (iv)




                            C O N T E N T S

                              ----------                              

                           OPENING STATEMENTS

                                                                   Page

Velazquez, Hon. Nydia M..........................................     1
Graves, Hon. Sam.................................................     2

                               WITNESSES

Spoa, Sr., Mr. Christy, President, Ellwood City Save-A-Lot, 
  Ellwood City, Pennsylvania, on behalf of Food Marketing 
  Institute......................................................     3
Mayes, Ms. Meredith, Digital Solutions Manager, Colorcraft of 
  Virginia, Sterling, Virginia, on behalf of Printing Industries 
  of America.....................................................     5
Uhl, Uhl, Mr. Arthur, Fitzsimons & Jewett, PLLC, San Antonio, 
  Texas, on behalf of National Cattlemen's Beef Association......     7
Neese, Ms. Terry, Distinguished Fellow, National Center for 
  Policy Analysis................................................     9

                                APPENDIX


Prepared Statements:
Velazquez, Hon. Nydia M..........................................    18
Graves, Hon. Sam.................................................    20
Spoa, Sr., Mr. Christy, President, Ellwood City Save-A-Lot, 
  Ellwood City, Pennsylvania, on behalf of Food Marketing 
  Institute......................................................    22
Mayes, Ms. Meredith, Digital Solutions Manager, Colorcraft of 
  Virginia, Sterling, Virginia, on behalf of Printing Industries 
  of America.....................................................    27
Uhl, Uhl, Mr. Arthur, Fitzsimons & Jewett, PLLC, San Antonio, 
  Texas, on behalf of National Cattlemen's Beef Association......    33
Neese, Ms. Terry, Distinguished Fellow, National Center for 
  Policy Analysis................................................    36

Statements for the Record:
Clarke, Hon. Yvette D............................................    40
Associated Builders and Contractors, Inc.........................    43
Printing Industries of America...................................    44
Small Business Council of America................................    46
International Franchise Association..............................    54
Society of American Florists.....................................    55
Imperial Lithographics, Phoenix, AZ..............................    57
Marc Nelson Oil Products, Salem, OR..............................    59
RFI Enterprises, San Jose, CA....................................    61
Grande Harvest Wines, New York, NY...............................    63
Simkins-Hallin, Inc., Bozeman, MT................................    65
Mavar Shrimp & Oyster Co. Inc., Biloxi, MS.......................    69

                                  (v)




                    FULL COMMITTEE HEARING ON SMALL



                      BUSINESS AND THE ESTATE TAX:



                   INDENTIFYING REFORMS TO MEET THE NEEDS


                   OF SMALL FIRMS AND FAMILY FARMERS

                      Wednesday, November 4, 2009

                     U.S. House of Representatives,
                               Committee on Small Business,
                                                    Washington, DC.
    The Committee met, pursuant to call, at 1:05 p.m., in Room 
2360, Rayburn House Office Building, Hon. Nydia Velazquez 
[chairwoman of the Committee] presiding.
    Present: Representatives Velazquez, Dahlkemper, Schrader, 
Nye, Altmire, Bright, Griffith, Graves, Fallin, Luetkemeyer, 
and Thompson.
    Chairwoman Velazquez. [Presiding.] I call this hearing of 
the House Small Business Committee to order.
    For many, starting a successful business and seeing it grow 
is the cornerstone of the American dream. As the daughter of an 
entrepreneur, I saw firsthand what my family had to do to keep 
a small business afloat. With big ideas for the future and 
limited resources to call upon, I know that starting and 
running your own venture for many entrepreneurs is a family 
affair.
    It is not surprising then that many small-business owners 
imagine passing along the farm or business they have built to a 
child or grandchild to carry on the family trade. But for many 
parents who have spent their whole lives working to leave their 
business to their children, the estate tax can threaten the 
dream of having a son or daughter follow in their footsteps.
    For many family businesses, the estate tax was a hurdle too 
great to overcome as the heirs of a family farm or business 
suddenly found themselves in the middle of a complex outdated 
law. It closed the doors on countless viable family businesses 
because they did not have the cash on hand when the estate tax 
came due. This was especially true for many family farmers, who 
were forced to liquidate--their greatest wealth is the land 
they till, not the cash in their bank accounts.
    For small-business owners that sought to overcome these 
hurdles, the anxiety and costs were tremendous. After all, 
estate planning for small businesses is complex and costly. 
Entrepreneurs attempting to plan for the future had to hire 
costly lawyers and accountants to navigate laws, calculate 
their estate tax, and set aside funds so they could pass along 
the family trade.
    Even then, entrepreneurs were not guaranteed their family 
business or farm would survive to pass on to the next 
generation. One entrepreneur told me he spent 5 years, hundreds 
of thousands of dollars for consultants, and carried a life 
insurance policy to protect his children from having to sell 
the family business. Despite his careful planning, he was still 
worried he may have overlooked something which would cost his 
employees their jobs if his children were not able to pay the 
estate taxes to keep their doors open.
    It is not surprising then that before estate tax reform was 
enacted in 2001, some 70 percent of family businesses did not 
survive into the second generation. Almost 90 percent did not 
make it to the third generation.
    While the estate tax reforms enacted in 2001 allowed 
entrepreneurs to focus on growing their ventures, the reforms 
were enacted on a temporary basis and will soon end. Starting 
in 2011, the estate tax exemptions for small businesses will 
expire. When they disappear, millions of family enterprises 
will again find their chances for survival beyond the first 
generation in jeopardy.
    In today's hearing, we will examine what the future of the 
estate tax holds for small businesses. Some are calling for 
complete repeal of the estate tax; others have suggested that 
Congress freeze estate tax provisions in their 2010 form. One 
thing is clear: We will need to find a solution.
    Small businesses face enough hurdles to succeed even 
without the estate tax as an insurmountable obstacle in their 
way. Children who inherit the family farm or firm and wish to 
carry on their trade should not be forced to sell or liquidate 
their business.
    Protecting the family business and farm so it can flourish 
into the next generation will also help the communities who 
depend on these enterprises for jobs and services. By crafting 
an estate tax policy that works for small businesses and family 
farms, entrepreneurs can focus on growing their ventures, 
creating the jobs and growth needed for long-term prosperity.
    I would like to take this opportunity to thank all the 
witnesses for being here. I am glad that they were able to make 
this trip to Washington to be with us this afternoon and look 
forward to the hearing from them--or to hear from you.
    With that, I will yield to Ranking Member Graves for his 
opening statement.
    Mr. Graves. Madam Chair, I appreciate it very much, and I 
also want to join you in thanking our witnesses for coming 
today, and some of you from a long way, but I do appreciate you 
taking the time out of your schedule to be here.
    Entrepreneurs are struggling, and they are responding to a 
very difficult economy by working to expand and create jobs at 
a time of high unemployment. Now they are threatened with 
additional regulations, mandates, and tax increases to pay for 
health care and additional government spending. The last thing 
that they need is the possibility of losing their businesses. 
Yet if Congress fails to act before 2011, family businesses and 
entrepreneurs may find their companies at risk.
    Current law, which would phase out the estate tax for those 
who pass away in 2010 only, is scheduled to sunset January 1, 
2011. If Congress does nothing, the top marginal estate tax 
rate of 55 percent and an exemption of just $1 million would 
again take effect in 2011.
    Small businesses and farms are often operated by families 
and transferred from one family member to the next. These 
entrepreneurs frequently return any savings right back into 
their businesses by purchasing valuable equipment or land 
needed to operate the company.
    In the case of a small company or a farm, although the 
assets are transferred after a descendant's death may be 
valuable, the heir's net worth or liquidity may not be high. 
The heir, facing a 50 percent estate tax bill, may be forced to 
sell vital equipment or land just to pay the tax, rendering the 
business inoperable. The net effect is the reduction of capital 
formation for productivity and business expansion.
    Death should not be a taxable event. The notion that the 
federal government is owed anything upon the death of a family 
member is outrageous to me.
    Before current law sunsets at the end of 2010, Congress 
must act. I support a full repeal of the estate tax, and I have 
introduced legislation, H.R. 664, to make the 2001 and 2003 tax 
relief, including the estate tax phase-out, permanent. But the 
fact that there is uncertainty in the law makes it very 
difficult for small-business owners and farmers to plan, and we 
cannot allow these entrepreneurs to risk their future or their 
companies.
    Madam Chair, again, I want to thank you for holding this 
hearing, and I appreciate and look forward to the testimony.
    Chairwoman Velazquez. Thank you.
    The chair recognizes the gentleman from Pennsylvania, Mr. 
Altmire, for the purpose of introducing our first witness.
    Mr. Altmire. Thank you, Madam Chair. And welcome to all of 
our witnesses, especially my constituent, Mr. Spoa. Mr. Christy 
Spoa is the president of Ellwood City Save-a-Lot, located in 
Ellwood City, Pennsylvania. Mr. Spoa's company is family-owned 
and was started over 90 years ago.
    He is testifying on behalf of the Food Marketing Institute. 
FMI represents more than 1,500 food retailers and wholesalers 
worldwide.
    Welcome, Mr. Spoa.
    Chairwoman Velazquez. Your mic is not on. Thank you.

                   STATEMENT OF CHRISTY SPOA

    Mr. Spoa. --thank you--and members of the Committee. Thank 
you for inviting me to testify about the impact of the estate 
tax on small businesses.
    My name is Christy Spoa, Senior, and I am the president of 
the Ellwood City Save-a-Lot in Ellwood City, Pennsylvania. We 
have been a family-owned business for 91 years and are proud of 
the relations we have built with our customers and our 
community.
    I am pleased to say that the fourth generation of Spoas 
will carry on this tradition. Three of my children work with me 
at the Save-a-Lot and will eventually run the company.
    Operating a supermarket is a demanding undertaking that 
requires long hours and dedication, but they have tackled these 
challenges with creativity and enthusiasm. I take great pride 
in knowing that I am leaving the business in good hands.
    However, the existence of the estate tax makes planning 
this succession harder than it should be. For a number of 
years, I have worked with my industry association, the Food 
Marketing Institute, to advocate for the repeal of this unfair 
tax.
    I hoped the 2001 reforms would be the first steps in this 
process. But the situation it created by having the tax 
disappear next year before snapping back to as much as 55 
percent in 2011 has made estate planning nearly impossible.
    I continue to hope that Congress will repeal the tax or 
eliminate it for companies to stay in the family, but right 
now, businesses like mine need certainty and predictability.
    The estate tax hits family-owned businesses when they are 
at their weakest, following the death of the head of the 
company. This period can turn into a nightmare for families 
that have not adequately prepared. I can only imagine how 
painful it must be to have to sell off all or part of a once-
thriving family business in order to pay the estate tax.
    Supermarket owners tend to be asset-rich in terms of 
buildings, equipment and stock, but cash poor. Even single-
store operator can quickly find themselves exceeding the 
current exemption levels, and multi-store companies can easily 
exceed $10 million.
    It is exceedingly difficult for companies like mine and 
others in the industry to withdraw significant amounts of cash 
to pay the estate tax. And since I operate a single store, 
selling off part of the business to raise funds is not an 
option. No one wants to leave that as a legacy for their 
children.
    So in order to protect against the cost of the tax, I carry 
a life insurance policy that would help my family cover the 
expense of compliance, should anything happen to me. Similarly, 
I have spent countless hours with lawyers and accountants to 
plan for the orderly transition of leadership from myself to my 
children.
    The estate tax makes this process infinitely more 
complicated, and it will even be more complex once my children 
take over, since there will now be three owners. They will also 
have to spend a significant amount of money to make sure that 
unforeseen circumstances do not threaten the viability of the 
business and their ability to leave it to the next generation. 
So I am not just passing on the company, but the cost of estate 
planning, as well.
    Some might argue that this is the cost of doing business. 
But every dollar that goes toward insurance premiums and estate 
planning is a dollar not invested in my business. It is money 
taken from job creation, increased wages, and better benefits. 
Right now, I have 25 employees, and they bear the brunt of this 
tax just as much as my family do.
    In the 91 years we have been in business, I would guess we 
have employed over 1,000 people at one time or another. Where 
are these jobs going to come from if family businesses are 
weakened or sold to cover the cost of the tax? It can be easy 
to ignore this impact, but for communities that are struggling 
to create good jobs, it is a question that needs to be 
answered.
    At the start of my testimony, I mentioned that I have been 
advocating for years to repeal this tax. It is my belief that 
it simply does more harm than good. Both the industry and I 
recognize that this is a difficult task and have worked to 
support reasonable compromises when they are offered. But I 
continue to believe that repeal is the best solution and the 
best way to make sure that small and family-owned businesses 
continue to thrive and create jobs.
    For individually owned and operated grocery stores like 
mine, the estate tax is a constant source of anxiety that has 
real consequences for my family, my employees, and the day-to-
day operations of my business. I do not have the cash or assets 
on hand to simply write the government a check, so I have spent 
years and thousands of dollars to plan for the worst. But no 
matter how much I spend, I always wonder, have I done enough?
    Thank you for inviting me to testify, and I will be happy 
to answer any questions.
    [The statement of Mr. Spoa is included in the appendix.]
    Chairwoman Velazquez. Thank you, Mr. Spoa.
    Our next witness is Ms. Meredith Mayes. She is the digital 
solutions manager of ColorCraft of Virginia, located in 
Sterling, Virginia. ColorCraft is a family-owned, high-end 
commercial digital printing company. Ms. Mayes testifying on 
behalf of Printing Industries of American. PIA is the world's 
largest graphic arts trade association, representing an 
industry with approximately 1 million employees.
    You have 5 minutes.

                  STATEMENT OF MEREDITH MAYES

    Ms. Mayes. Chairwoman Velazquez, Ranking Member Graves, and 
members of the Committee, good afternoon, and thank you for 
inviting me to testify today. My name is Meredith Mayes, and I 
work as a digital solutions manager at ColorCraft of Virginia, 
a commercial printing company.
    I represent the second generation of the company. My 
father, Jim Mayes, acquired ColorCraft in 1986 and grew it from 
a 23-employee shop to one with nearly 98 employees at its peak. 
We currently employ 51 workers, including my mother, who--in 
the traditional mom-and-pop sense of small business--oversees 
the company's accounting.
    Through all of the ups and downs, our company has always 
remained true to its family atmosphere. Our longest serving 
employee has been with us for 23 years. We know that this term 
is more than just company culture; it is a commitment to jobs 
and growth for our family, but also for those families who 
depend on ColorCraft for their livelihoods. That is why the 
estate tax is a tremendous concern for us and for thousands of 
printers across the country.
    According to the Printing Industries of America, of which 
ColorCraft is a proud member, 6 out of 10 printing companies 
are family-owned. In total, there are approximately 17,000 
family-owned plants in the United States, and they employ close 
to 600,000 workers. The uncertain future of the estate tax is 
top of mind for nearly all of these firms.
    At ColorCraft, I have watched my father spend numerous 
hours and dollars attempting to ensure the longevity of a 
company he works so hard to keep afloat and growing. Annually, 
we spend $5,000 on estate tax planning. All told, we have spent 
$730,000. Our company would much rather have reinvested that 
$730,000 to fund sales training, technical education, and debt 
reduction, all of which would benefit the entire ColorCraft 
family and the jobs we provide.
    On that note, job creation should definitely be part of an 
estate tax discussion. The printing industry has lost 73,000 
jobs since mid-2008. Family-owned small businesses are critical 
to the revival of our economy, and an estate tax that soaks up 
financial resources and negatively impacts job creation is very 
troubling.
    This is especially true, as a 2006 Joint Economic Committee 
report stated that the revenue raised by the death tax amounts 
to only 1.2 percent of total federal revenues.
    There are non-economic costs to the estate tax, too. Small 
businesses are known for community service. And, trust me, a 
local printer is often the first stop for every local club, 
school, and charity seeking an in-kind donation.
    For instance, ColorCraft supports local educational 
programs, including Head Start and the Monroe Technology Center 
in Leesburg, Virginia. An estate tax that threatens small-
business survival also threatens non-profit and community 
support.
    So what can Congress do to ensure that the estate tax 
doesn't continue to be an albatross on small printers' necks as 
we seek to survive and grow? In my opinion, a full, outright 
and permanent repeal of this tax is the best solution. The next 
best-case scenario is permanent reform.
    One reform idea is the Estate Tax Relief Act of 2009, 
introduced by Rep. Shelley Berkley and others, which would 
phase in the estate tax exemption levels over 10 years to $5 
million, while also decreasing the tax rate to 35 percent. This 
particular adjustment of exemption levels and rates, if indexed 
for inflation and made permanent, would relieve approximately 
80 percent of family-owned printers from both the destructive 
planning and payment of the estate tax.
    This approach is one our industry would welcome and 
support, though a higher starting exemption level and a 
shortened timeframe would provide more practical relief.
    I would add a note of caution regarding top exemption 
levels. I urge Congress to be mindful that capital-intensive 
industries like printing have non-cash assets that add up very 
quickly in spite of depreciation schedules. For example, our 
most recent equipment purchase was a printing press at $3.8 
million.
    Additionally, many family-owned printers strive to own 
rather than lease their plants, which also adds to the estate 
tax calculation. What may sound like a lot of money on paper 
doesn't always translate to cash on hand.
    As stated previously, I manage the digital printing side of 
my family's business. My father and many of his generational 
peers have an expertise in traditional ink-on-paper printing, 
an area of the industry that is expected to have less than 1 
percent annual sales growth between now and 2020. In contrast, 
digital printing is expected to have 133 percent sales growth 
by 2020.
    As I network with second-and third-generation printers 
across the country, many of us are driving the digital 
expertise and, therefore, driving the future growth of the 
entire industry. My generation wants the chance to lead our 
family-owned businesses into the future. I hope fervently that 
Congress will act upon the problem of the estate tax issue to 
allow ColorCraft and other printers to continue growing, 
succeeding, and reaching our full potential.
    Again, thank you for holding today's hearing and for 
inviting me to testify. I look forward to answering any 
questions you may have.
    [The statement of Ms. Mayes is included in the appendix.]
    Chairwoman Velazquez. Thank you, Ms. Mayes.
    Our next witness is Mr. Arthur Uhl. He is an attorney and 
founding partner of Uhl, Fitzsimons & Jewett law firm in San 
Antonio, Texas. The law firm focuses on real estate, business 
and energy law matters. Mr. Uhl is also a cattle rancher and 
producer. He is testifying on behalf of the National 
Cattlemen's Beef Association, a marketing organization and 
trade association for a million cattle farmers and ranchers.
    Welcome.

                    STATEMENT OF ARTHUR UHL

    Mr. Uhl. Madam Chair, Ranking Member Graves, and members of 
this Committee, my name is Arthur Uhl, and I am a rancher, cow 
producer, and attorney from San Antonio, Texas. I am testifying 
on behalf of the National Cattlemen's Beef Association, the 
NCBA, which is the largest and oldest national organization 
representing America's cattlemen and cattlewomen.
    As chairman of NCBA's tax and credit policy Committee, I 
can testify that the repeal or fundamental reform of our 
federal estate tax system is at the heart of NCBA's mission, 
and we believe it is critical to the long-term viability of our 
industry.
    I appreciate your Committee raising awareness of the 
tremendous burden that the estate tax places on America's 
farmers and ranchers. Ninety-seven percent of American farms 
and ranchers are owned and operated by families, many of which 
have owned their properties for generations. To a small-and 
medium-sized operation, this tax can be a death sentence. Thank 
you for holding this hearing and bringing cattlemen to the 
table.
    Tax policy is a key factor impacting American cattle 
producers, particularly in today's difficult business climate. 
In an industry where financial returns are historically small, 
we depend upon the ability to pass on a farm or ranch to the 
next generation without exhausting resources for arduous 
planning or being forced to break apart economically viable 
operations. We view the estate tax as fundamentally unfair, 
inefficient, economically stifling, and particularly 
devastating to our business, which requires highly valued 
assets to produce minimal economic returns.
    Cattle producers understand and appreciate the role of 
taxes in maintaining and improving our nation, but they also 
believe the most effective tax code is a fair one. For this 
reason, NCBA members fundamentally disagree with the taxing of 
assets that have already been taxed, sometimes two and three 
times over. In the eyes of American farmers and ranchers, death 
should not be a taxable event, either for the estate or for the 
heirs.
    The current onerous estate tax system is also at odds with 
our important national goals of preserving natural resources 
and open space. Family farms and ranches provide an abundant 
and necessary source of food and fiber to feed the growing 
global population, as well as Americans right here at home. Not 
only are they producing nutritious food, America's farmers and 
ranchers are taking care of the land, air and water that make 
our way of life possible.
    The death tax breaks up farm and ranch land and displaces 
family generational farms and ranches, expediting their 
conversion to strip malls and condo complexes and doing a great 
disservice to the American public and our rural way of life.
    All family businesses would like to see this tax go away, 
and historically the cattlemen have fought for full repeal of 
the estate tax. But our members recognize full repeal may not 
be an option at this time, so we are simply asking Congress to 
reform the estate tax to give relief and certainty to dedicated 
farming and ranching families who continue to work and preserve 
the land.
    The minimal amount of progress which has been made is at 
risk of being undone. Currently, the estate tax rate is set at 
45 percent for estate assets exceeding $3.5 million in value, 
or $7 million per couple. The president's proposed budget would 
freeze the estate tax at these levels so they could be dealt 
with at a later date. If Congress does nothing, in 2011, the 
exemption amount and tax rate will revert to staggering pre-
2001 tax levels, meaning estate assets exceeding $1 million 
would be taxed at the 55 percent rate.
    When you factor in land and equipment, not to mention 
rising property values, it is clear that most farms and ranches 
would easily exceed the million-dollar threshold. This is a 
value that most farmers and ranchers will never see in terms of 
cash, as it is tied up in productive assets, which we hope to 
pass down to the next generation.
    An estate tax exemption of agricultural lands is an optimal 
way to diminish the devastating effects of the estate tax on 
family ranching operations. Farm and ranch land market values 
continue to increase based on many things, including their 
proximity to urban sprawl. In most cases, this inflated market 
value is the basis for assessing the death tax, resulting in 
the need to liquidate productive agricultural assets in order 
to keep what we can.
    Indexing for inflation is absolutely critical in countering 
escalating land values, and stepped-up basis provisions are 
imperative when those assets have been levied with the tax. 
NCBA has supported recent legislative proposals to increase the 
exemption levels and decrease the rate of taxation.
    For these reasons, it is our recommendation that Congress 
act swiftly to bring further reform to the death tax. We urge 
you to work with Chairman Rangel and the Ways and Means 
Committee to include the reform ideas laid out in 
Representative Berkley's bill, as well as the adoption of the 
agricultural exemption contained in the Thompson-Salazar bill, 
because, at the end of the day, all we really want is to keep 
our farms and ranches in production.
    We need farms and ranches to stay whole and be passed down 
from generation to generation in order to take care of the 
land, feed our country, feed the world, and maintain our way of 
life.
    NCBA appreciates the House Small Business Committee holding 
this hearing, and U.S. cattle producers need your leadership 
and look forward to continuing dialogue on this important 
issue.
    [The statement of Mr. Uhl is included in the appendix.]
    Chairwoman Velazquez. Thank you, Mr. Uhl.
    The chair recognizes Ms. Fallin for the purpose of 
introducing our next witness.
    Ms. Fallin. All right. Thank you, Madam Chair. It is a 
great pleasure to be able to introduce one of my long-term 
friends and a woman that is very highly respected in Oklahoma, 
and that is Terry Neese. Terry, welcome. It is good to have you 
here in front of our Small Business Committee.
    Ms. Neese has served as a distinguished fellow at the 
National Center for Policy Analysis. In this role, she develops 
ideas to help small-business owners make better financial and 
health care decisions. She is the owner of a small business, a 
family farm, and has founded several organizations to educate 
and train small-business owners.
    Ms. Neese has been recognized by Fortune magazine as one of 
the power 30 most influential small-business women in 
Washington, and Inc. magazine has named her as one of four top 
advocates for entrepreneurs in the United States. So we are 
thrilled today that she was able to make time in her schedule 
to join us from Oklahoma.
    And welcome, Terry. It is good to have you here.

                    STATEMENT OF TERRY NEESE

    Ms. Neese. Thank you. It is good to be with you. Thank you, 
Congresswoman Fallin.
    And, Madam Chairwoman, good to see you. It has been a 
while. And I appreciate you holding this important hearing.
    Members of the Committee, thank you for inviting me and 
giving me the opportunity to discuss the detrimental impact of 
the estate tax on small business and their families.
    Today, I am speaking on behalf of the National Center for 
Policy Analysis, a nonprofit, nonpartisan public policy 
research organization dedicated to developing and promoting 
private alternatives to government regulation and control. The 
NCPA recently started the Family Policy Center, where we focus 
on finding private solutions to issues faced by women, 
families, and small business. They are headquartered in Dallas, 
Texas, and I live and work in Oklahoma.
    Support for the estate tax is based on three major claims: 
first, inheritances are a major source of wealth inequality; 
second, the tax provides significant revenue for the federal 
government; and, third, the individuals required to pay the tax 
can easily afford it.
    These are, however, all myths. Not only the rich, but 
lower-and middle-class Americans, especially small-business 
owners, should be concerned if the estate tax is not repealed 
or maintained permanently.
    It is a common assumption that inheritances are a major 
source of wealth inequality. And an NCPA study shows that only 
17 percent of wealth for the top 1 percent wealth came from 
bequests. In actuality, individual skills and personal choices 
are far more important in determining household wealth.
    Because inheritances are only a minor factor determining 
the wealth distribution among retirees, using the estate tax as 
redistributive mechanism is unlikely to have a significant 
effect on that distribution. In fact, it may be self-defeating 
if it slows capital formation. The resulting increase in 
capital returns would make the rich even richer.
    The second myth, the tax provides significant revenue for 
the federal government, in fact, it makes up 1 percent to 3 
percent of federal tax revenue. It slows capital formation, 
reducing tax revenues, lowering wages, employment, federal 
payroll, and income tax revenues.
    And according to the Heritage Foundation, if the estate tax 
were repealed, the U.S. economy would average as much as $11 
billion per year in extra output, and an average of 145,000 new 
jobs per year could be created, and personal income could rise 
by an average of $8 billion annually above current projections.
    The third myth and final one is the individuals required to 
pay the tax can easily afford it. It is important to understand 
that the burden of the tax falls on the recipient, not the 
giver. Middle-class Americans, especially small-business 
owners, are often stuck with a burdensome estate. Small-
business owners and family farmers generally have large 
investments in infrastructure. Many don't have large capital 
assets that can be used to pay the tax. And, therefore, many 
heirs have to liquidate the farm or shut the doors on the 
family business to pay the estate tax.
    The NCPA views the estate tax as anti-family, because it 
does not allow a parent to pass their hard work and their 
wealth, if they have any wealth, to their children. It is anti-
farm, because farms are especially vulnerable because they hold 
vast amounts of land which are subject to the estate tax as 
they are passed from generation to generation. And it is anti-
small business. It hurts small businesses that don't enjoy the 
same tax shelters and benefits as large corporations.
    As Congresswoman Fallin said, I have been involved in 
small-business issues for more than 30 years, serving as a 
national president of the National Association of Women 
Business Owners, owner of my own business, and today as a 
distinguished fellow at the National Center for Policy 
Analysis.
    So, on behalf of the NCPA and the many small-business 
owners like me and families that might be affected by the 
actions of this Committee, I am in hopes that you will look at 
this, as small-business owners are the job-creators of this 
country, and we will lead us out of the recession as we did in 
2001. They don't need any more taxes, not now, and not when 
they die.
    Thank you very much. And I look forward to your questions.
    [The statement of Ms. Neese is included in the appendix.]
    Chairwoman Velazquez. Thank you. There is going to be a 
series of seven votes coming up. I am not going to be asking 
questions in this round, and I am going to recognize the rest 
of the members that are here, and then we will go into recess, 
and I will come back and ask my questions.
    So, Mr. Graves?
    Mr. Graves. I will defer, too, Madam Chair. I don't think 
there is anything that could be said or any question that I 
could ask that would get me to be more against the estate tax.
    [Laughter.]
    Chairwoman Velazquez. Mr. Griffith?
    Mr. Griffith. Madam Chair, thank you for holding this 
hearing. We appreciate so much your comments. I hope that we 
can translate that and transfer it into the floor of the House 
and make something happen so that our hard-earned tax dollars 
are not planning to try to avoid an estate tax in the future. 
It is a major, major problem and a major difficulty, and we 
appreciate, Madam Chair, holding this hearing and certainly you 
all for being here. Thank you.
    Chairwoman Velazquez. Mr. Luetkemeyer?
    Mr. Luetkemeyer. Thank you, Madam Chair.
    I would just ask a couple of brief questions. I think we 
are all in agreement here. This is an issue that we are all in 
agreement on. This is a really big problem for small 
businesses. As a small-business person myself, I have seen our 
family have to go through this discussion of how we can succeed 
or pass down businesses from one to the other.
    I know, Mr. Spoa, you talked a little bit about some of the 
problems in planning. You had the importance of life insurance 
in that. But it--you also made the comment about--it is 
extremely difficult to try and make a long-term plan on estates 
with this constant changing of the rules and every year, having 
to go back and redo this.
    Can you give some examples or experiences on the difficulty 
of doing this and the cost that is involved in trying to go 
back--and trying to revise this and protect this group this 
time and that asset this next time--moving target, isn't it?
    Mr. Spoa. Yes, it is. It is a moving target. And it becomes 
more difficult, I think, for my children that are taking over 
the business, because there are three of them involved, and 
they have to worry about the other two. I really only have to 
worry about myself, up to certain point, until these children 
decided they wanted to take over and stay in the business.
    They have to continually plan for each of them and what 
they have--what if something happens to one of them? What 
happens to the business? So they have had to invest in 
insurance policies. And the joke is sort of, if anybody is 
going to die, better do it next year, because then we can pass 
on. We don't have to worry about it.
    But it is a moving target. I mean, you have to sit down 
with the accountants. You have to sit down with the tax 
planners. You have to sit down with the attorneys. And you do 
it every year--
    Mr. Luetkemeyer. It is a cost that you have to incur that 
you have to incur, is it not?
    Mr. Spoa. Right, it is a cost.
    Mr. Luetkemeyer. Do you have an idea of roughly what your 
costs are or what the average cost is for people to comply?
    Mr. Spoa. I think I will go along with what the young lady 
next to me said, it was roughly around $5,000 a year. We may be 
a little higher than that, but I hate--I hesitate to guess 
without knowing for sure. But it is probably, I would say, 
between $5,000 and $10,000 a year.
    Mr. Luetkemeyer. Okay.
    Ms. Mayes, you made the comment about, you know, printing 
industry is very--it is unlike the cattlemen industry or the 
cattle industry over here, which you can sell off a number of 
acres to do this. It is hard to sell your printing press--
    Ms. Mayes. That is right.
    Mr. Luetkemeyer. --you know, to kind of divide that up and, 
you know, throw off this part and that part. I mean, when you 
buy a huge asset like that, which is probably 50 percent to 60 
percent of all your assets, are all tied up, or your money--
your capital is tied up in one asset, it makes it difficult to 
try to sell off parts in order to be able to keep the whole.
    Not that farming is not an industry that it is easy to 
accommodate estate taxes. I mean, that is also incumbent on the 
way you generate cash. But it really causes a problem for the 
printing industry, does it not?
    Ms. Mayes. Yes, it is a very capital-expensive industry. I 
mean, one press is $3 million. We have three large presses and 
all of the small equipment, as well, everything, it is just 
very capital-intensive industry.
    Mr. Luetkemeyer. It really affects everybody differently, 
like I say, under the capital--with the cattle industry here, 
you know, if you sell off too much land, suddenly it doesn't 
make your farm productive enough to maintain and to be able to 
stay in business, I would guess, Mr. Uhl. Is that correct?
    Mr. Uhl. Excuse me?
    Mr. Luetkemeyer. When talking about, if you have to sell 
off some of your property, it makes it difficult to try and 
cash flow your business. You are usually set up so you--the 
size of your business is--the activities that you have on your 
property is conducive to the size of the total ranch.
    Mr. Uhl. Absolutely. A critical mass is absolutely 
necessary in our business. And when you have to sell off part 
of your land, that obviously impacts your economic viability.
    Mr. Luetkemeyer. Right.
    Ms. Neese, just a real quick one for you. You were talking 
about the negative impact on economic activity. And I thought 
that was an interesting comment from the standpoint that 
actually the estate tax is a restraint on economic activity. 
That is an interesting comment. Can you elaborate on this a 
little bit?
    Ms. Neese. Well, I think it is because of--especially if 
you are a farmer, the infrastructure and the cash assets that 
you have, it is a detriment to employment, to wages, to 
revenues, federal revenues, if you look at it as a detriment.
    Mr. Luetkemeyer. Just expansion in general, I would guess.
    Ms. Neese. Exactly.
    Mr. Luetkemeyer. Yes. And if you have to sell off part of 
your assets, you have got less to leverage if you want to 
expand or improve your business, I would take it.
    Ms. Neese. Exactly. And one other quick comment from my 
perspective, in my business, I own a human resources firm in 
Oklahoma City. And we spent anywhere from around $5,000 to 
$7,500 a year. And we have been doing that now for 20 years. 
And the uncertainty is one of the biggest problems. We need 
permanent fix. And that will help all small-business owners. It 
will help us create more jobs. It will be so--the burden that 
will be released would be a huge one for us.
    Mr. Luetkemeyer. Thank you for your comments. My time is 
up.
    Thank you, Madam Chair.
    Chairwoman Velazquez. Mr. Schrader?
    Mr. Schrader. Thank you, Madam Chair.
    I guess a question for Mr. Uhl, maybe Ms. Neese, in terms 
of the farmers, I am a farmer, and also I have a small 
business. And I am very concerned about, you know, my estate 
and being able to pass things onto my kids. Any rough 
estimates, in terms of sizes, particularly of the average--you 
know, such as it is farm or ranch, where they would fall in the 
different proposals that are being discussed in terms of, you 
know, estate value, what percentage of farms, what percent of 
ranches are about $3.5 million, above $5 million, or below 
those numbers, that sort of thing?
    Mr. Uhl. To our knowledge, there is no hard economic data 
that will tell you an exact percentage of farms or ranches that 
will come within the standard. Certainly, if the exemption rate 
goes down to a million dollars, many, many more will come in.
    According to the National Agricultural Statistics Service 
in the USDA, the average beef operation was 573 acres, and the 
average operation also had 40 cows. Also, the average 
profitability over a 30-year average was $30 per head. So what 
that would lead you to, I believe, economically would be that 
that average beef operation would average about $1,200 in 
profitability per year for that 573-acre average.
    So I guess what that really tells you is that there are 
many people in the industry who are not in the industry full 
time, that it is merely on a part-time basis. For those of us 
who are in the business full time, many more acres are 
involved.
    Again, according to the National Agricultural Statistics 
Service, in 2009, the average pasture value per acre was 
$1,070. In 2003, that was $605. So during that 4-year period, 
the average per-acre value went up 77 percent, which shows you 
how rapidly these values have been escalating.
    Of course, that is of no use to us in the business, because 
we don't intend to sell our land. We would like to pass it 
along. So that is why this issue is so important to us.
    Mr. Schrader. Ms. Neese, any comments along the same lines?
    Ms. Neese. Just a personal experience. My family farm has 
been in our family for 100 years. My grandfather started the 
farm, passed it down to my father, and two other siblings. They 
ended up having to sell part of their land. It was a big 
problem for my father. I ended up purchasing the farm from my 
father to create less complications for him and giving him a 
life estate on the farm until his passing.
    So that is just an example of some of the things. And I 
have to tell you, this was back when the--was charging 20 
percent interest rates. So I got my father out of that and paid 
it off for him.
    So these are some of the things personally that I have been 
through in terms of trying to deal with passing the farm off 
generation to generation. We are in Cotton County, Oklahoma, 
and because it is a 100-year-old farm, I would love to keep it 
in my name.
    Mr. Schrader. Thank you very much.
    Just a comment, Madam Chair, that I think it is a nice, 
great, bipartisan bill that we could maybe get behind, and I 
hope this Committee will look favorably on it. We are actually 
getting something maybe from the Senate at end of this week or 
next week, whenever the Senate ever gets anything done, that is 
going to be spending a lot more for relief for our different 
businesses. I can't think of any better expense is to take care 
of this, and the $28 billion or whatever would pale in 
comparison to the benefit for American farmers and American 
small businesses.
    Chairwoman Velazquez. Mr. Thompson?
    Mr. Thompson. Thank you, Madam Chairwoman.
    Thank you to the panel for your testimony today.
    Mr. Spoa, it is good to have another Pennsylvanian here. 
And I wanted to start out with--just wanted to ask you, you 
talked about your family-owned company has provided jobs for 
many people over the years. And what are the kind of jobs that 
will disappear if small businesses must be sold to pay estate 
taxes? And are you concerned that the jobs won't be created to 
fill that void?
    Mr. Spoa. Well, the jobs that are filled by the retail 
grocery industry, you have well-paying jobs in the meat 
department, the bakeries, the delis, produce managers, front-
end manager. These are all well-paying jobs that people 
actually support families on.
    Now, a lot of your part-time workers are the high school 
students who get their first job, can learn a little bit about 
what it is like to have to go to work every day, to follow a 
schedule, learn how to take orders from your supervisors, and 
learn how to interact with the consumer, and just generally 
learn a little bit about life in general, rather than just the 
book-learning that they receive in school.
    So those are the jobs that would be lost, along with what 
every small retailer does for their community as a whole.
    Mr. Thompson. Can you tell me a little bit about that, in 
terms of how it would impact the surrounding community and the 
economy, give me some examples?
    Mr. Spoa. Ellwood is a small community. Businesses support 
the local hospital. Businesses support the local Distributive 
Education Clubs of America's program. Businesses support 
churches and all the clubs that go along with the churches, the 
bingos and the dinners that the churches throw. They support 
the bans from the high school. I mean, you name it, and small 
business is there to support, every business in relationship to 
what they can afford to help, but they all help. They all do 
something for their community.
    And if they are gone, where is the community going to get--
where are they going to get that--who is going to provide those 
services for them?
    Mr. Thompson. Okay. Thank you.
    Ms. Mayes, in your testimony, you emphasized the need for 
certainty in the estate tax. We have heard a little bit about 
that. Would you elaborate on why this is important?
    Ms. Mayes. It is so important for the planning phase. You 
know, I discussed that we spend $5,000 a year, total of 
$730,000. Most of that is on life insurance premiums, the life 
insurance premiums on my father, on myself, on another partner 
of ours, just to try and plan. We never know which direction it 
is going to go in, and that is why just to get a certain plan 
down that we can plan for now would just be so helpful, and we 
wouldn't have to go back and forth.
    Mr. Thompson. Yes, thank you.
    Mr. Uhl, in your testimony, you talked about farmers and 
ranchers are often multi-generation small businesses. How 
frequently do they need assistance with succession and estate 
planning? And have you seen any trends related to this issue, 
you know, of that line of farming and ranching ending, where, 
you know, has there been up to this point situations where 
farmers have not continued to the next generation because of 
these costs and maybe combined with other factors?
    Mr. Uhl. Yes, absolutely, in two different ways. On account 
of farm economics now, many times in many instances, the 
primary farmer or rancher needs to take a second job, and so 
that sort of takes them out of the industry. And many times, 
the death tax can cause a requirement for a mortgage to be put 
on the property, which ultimately ends up being such a burden 
that it is--those economic assets are sold down the line.
    And so even though it may be 3, 4, 5 years after the death 
tax is imposed, ultimately, the land is sold on account of 
that, because there is no longer an economically viable unit 
intact. So, yes.
    Mr. Thompson. Thank you.
    And I will yield back, Madam Chair.
    Chairwoman Velazquez. Mr. Bright?
    Ms. Fallin?
    Ms. Fallin. Thank you, Madam Chair. I do have a couple of 
questions.
    And I, too, support eliminating the estate tax and hope we 
can accomplish that before it expires. I would like to ask Ms. 
Neese a couple of questions. Why is the estate tax more 
burdensome on a small family business than the larger ones?
    Ms. Neese. Well, I am not sure that it is more burdensome 
on small business, other than it costs small-business owners so 
much to get into compliance and to make sure that they are able 
to pass that small business on to the next generation.
    And especially in today's economy, a lot of small 
businesses are really hurting, and it is difficult for them to 
just make payroll. And so to know that they have got to take 
another $5,000 or $7,500 to help them with the estate tax 
planning is a huge lump to take out of their budget when they 
could be using those dollars to market and continue to sell 
their wares and keep themselves in business.
    Ms. Fallin. That would make sense. And I would assume that 
those small-business owners may not have the level of expertise 
in accounting that some of the larger ones might.
    Ms. Neese. They definitely have to have an attorney who--
perhaps the large corporations have an attorney on staff and 
human resource people that the large corporations have on 
staff, so absolutely correct.
    Ms. Fallin. That is good. If I could ask Mr. Spoa a 
question, you said that you carry a life insurance policy to 
protect your family against the expense of an estate tax. Can 
you just elaborate a little bit more on why it is important for 
companies in industries with low capital and small margins to 
have something like that?
    Mr. Spoa. Well, if you want to pass your business on, you 
have to. If something would happen, there is no money there for 
the payment of a tax. So you really don't have any choice.
    I guess you could say, if you don't do it, you are setting 
a plan that really isn't a plan. So what they say, you can have 
no plan be a plan. And if you don't have the insurance and you 
don't do some planning, then you are willing to let your 
business go and all the years that your parents put into it and 
the hours that my wife and I put into it and the hours that the 
kids are putting into that means nothing if you don't buy that 
insurance, so that at least you have the cash to pay that tax.
    Ms. Fallin. Thank you. That is very good.
    I know we are short on time, so, Madam Chairman, I will 
relinquish my time. Thank you very much.
    Chairwoman Velazquez. Thank you.
    Mr. Nye?
    Mr. Nye. Thank you, Madam Chairman. My questions were 
largely answered. I just wanted to say thank you for coming 
here. I know it is arduous to get into Washington, but it is 
important for us to hear from you. For us to be able to make 
good policy, we have to hear from people who are on the front 
lines every day who are experiencing this, trying to keep up 
with the regulations, paying the expenses that you have talked 
about today, in terms of keeping up with all this code.
    And I just want to say: Thank you for taking the time to 
come sit here before us, because we need to see from people who 
are out there on the front line every day for us to make good 
decisions. So we appreciate you being here.
    I yield back.
    Chairwoman Velazquez. Ms. Dahlkemper?
    Ms. Dahlkemper. Thank you, Madam Speaker, and I apologize 
for coming in late. I had another hearing. But I just want to 
thank you, also. And I don't have any further questions at this 
point, so I appreciate your testimony today and appreciate you 
coming in front of us.
    I yield back.
    Chairwoman Velazquez. Okay. So I do have a question.
    We all support your concern regarding the estate tax, but 
we have a lot of competing interests right now, and one of them 
is facing rising deficits and the impact this could have on our 
economy in the future.
    Estimates say that repeal will cost $1 trillion over 10 
years. So if there is an exemption amount, a magic number that 
will protect small businesses, while taking into consideration 
fiscal constraints, what will that number be, Mr. Spoa?
    Mr. Spoa. You are talking the exemption or the tax rates?
    Chairwoman Velazquez. The exemption.
    Mr. Spoa. The exemption. The problem with setting a set 
figure with the exemption is that may work very well today, 
this year or next year, but 5 to 10 years down the road, that 
number would mean nothing anymore. So I don't know if you--if 
you really can set a--
    Chairwoman Velazquez. So let me ask you this question, 
then. There are a broad array of estate tax proposals right 
now. And one proposal is to make the 2009 levels of $3.5 
million permanent. Would this provide, in the case of Mr. Uhl, 
farmers with the certainty they need and the necessary 
protection? If not, what would be an acceptable threshold for 
family farms?
    Mr. Uhl. It would provide the certainty. Certainly, the 
higher the exemption level, the more people that will be 
employed, the better it will be for our economy. The current 
level of $3.5 million is insufficient for a meaningful number 
of members not only in our association, but the industry, those 
who produce the most beef.
    I am not prepared to tell you a number, but I can tell you, 
the higher the number, the better for our industry and the 
better for our economy.
    Chairwoman Velazquez. Okay. Any other member of the panel 
would like to comment?
    Ms. Neese. You know, Madam Chairwoman, I would love to be 
really optimistic and say how important it is that it is 
totally repealed and we have a permanent repeal so that we can 
then permanently decide what to do with our businesses, in 
terms of estate tax.
    Chairwoman Velazquez. Sorry, Ms. Neese. We don't live in a 
perfect world.
    Ms. Neese. But I would point to, you know, some of the 
studies that have come out that have said that the economy 
would average as much as $11 billion a year in extra output. I 
mean, look at some of those.
    I just think that, to protect small business, Mr. Uhl has 
made two good points. One, we need to have something permanent. 
And, two, the higher the amount, the better. But I will keep my 
rose-colored glasses on and stick to total, permanent repeal.
    Chairwoman Velazquez. Okay.
    Ms. Mayes?
    Ms. Mayes. Well, just $5 million would help approximately 
80 percent of the printing companies that would be relieved of 
this burden in today's dollars and cents, but just something 
permanent so that we could plan would be great, because the 
most important thing is, I have 51 families that I have to 
worry about, not just my own. It is more important to worry 
about those 51 families and their longevity and their 
livelihoods.
    Chairwoman Velazquez. Okay. Well, thank you very much. And 
we will continue to listen and discuss this issue that I know 
is important for small businesses in America, especially at a 
time when small businesses are struggling. Thank you all for 
being here today.
    I ask unanimous consent that members will have 5 days to 
submit a statement and supporting materials for the record. 
Without objection, so ordered.
    This hearing is now adjourned.
    [Whereupon, at 2:00 p.m., the Committee was adjourned.]
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