• 11
  • August
    2011

A lobbying group called the American Family Business Institute (AFBI) has been working diligently to convince the United States Congress to eliminate federal estate tax. This bill, if passed, would change the face of estate planning and probate nationwide, and the group believes that the current anti-tax mood in Washington and many state legislatures makes this the year such a measure could pass.

The AFBI has already had some success in eliminating estate taxes at the state level. The group claims credit for pressuring Washington State, Ohio and Maine to eliminate or sharply reduce their estate taxes, and founder Dick Patten has recently joined forces with anti-tax advocate Grover Norquist.

Florida does not currently have an estate tax, although that may change. For Floridians, good estate planning can typically reduce or eliminate virtually all of their exposure to estate tax liability. If Patten and the AFBI succeed in eliminating the federal estate tax, however, the assumptions upon which a great many estate plans were created will change.

One argument for states eliminating or reducing their estate tax rates is that an overly burdensome tax will drive wealthier residents out of state. If that happens, argue the AFBI and like-minded groups, there will be no estate tax revenue at all. States would be better off reducing their estate tax rates to a level that doesn't drive away the pool of those expected to be taxed.

Patten was inspired to lobby against estate taxes by events in his personal life almost forty years ago. Patten credits watching his father write a large check to pay estate taxes during the probate of his grandmother's estate as the moment his crusade against estate taxation began.

Patten saw that big tax payment as punishment for his grandmother's frugality during her lifetime. Because she was frugal, her estate was larger than some others and, because her estate was larger, her estate tax was higher.

Patten has been actively working in anti-tax lobbying, with a special focus on the estate tax, since 1991, when he launched a successful campaign to end the estate tax in his home state of Washington. Sixteen years later, he began to work nationally against the federal estate tax.

Source: Reuters, "American estate-tax crusader sees a good fight ahead," Nanette Byrnes, Aug. 8, 2011