FMI Disagrees with President’s New Tax Plan

JANUARY 22, 2015, ARLINGTON, VA– President Obama’s “State of the Union” address to the nation included a series of new tax proposals, including a plan to radically revise the current capital gains system.  The Food Marketing Institute released the following statement from Andrew Harig, Director of Government Relations, in response to the President’s speech:
“President Obama’s plan to eliminate the “stepped-up” basis for calculating capital gains on bequests and other gifts will make it significantly more difficult for family-owned supermarkets to stay ‘family-owned’. This proposal will not only increase the complexity of the already Byzantine tax code, it also injects more expense and uncertainty into the arduous process of estate and succession planning – a serious concern for business people who want to pass along their companies to the next generation of leaders. And to add insult to injury, the President included a significant tax increase in his plan.
The use of the stepped-up basis is not a loophole and death should not be a “realization event”. Business owners already face a confiscatory estate tax of 40 percent. The elimination of the stepped-up basis has the potential to add yet another “death tax” on top of that. The President may have been targeting millionaires with this proposal, but he is squarely hitting middle class food wholesalers and retailers who play an important role in their communities as leaders and job creators.
FMI will continue to work with its coalition partners at the Family Business Estate Tax Coalition to encourage Congress to abolish the estate tax.”