Death Tax Stories

Frank B. Lynott
5403 248th PL SE - ISSAQUAH, WA 98029
Ph: 425-392-9346 Fax: 425-392-9364

June 8, 1999

Honorable Jim McDermott
U.S. House of Representatives
1035 Longworth House Office Bldg.
Independence & New Jersey Avenues SE
Washington, D.C. 20515

Dear Representative:

I wish to tell you as briefly as possible how the current estate tax law cost the Government lost revenue and jobs in my personal estate.

After becoming bored with retirement, I bought two small bankrupt businesses, then spent 10 years and 10 million dollars turning them around into profitable enterprises. In the last few years after some illness (I am 78 years old) my family, which had helped manage and owned interests in both, realized they could not pay the taxes required to keep them in case of my death. Both businesses sold easily because of profit records and growth trends and Uncle Sam received its one time capital gains tax. The smaller company of 75 employees has been shut down and the buyers took over an $8 million write-off 3 years after buying. The other company of 165 employees is reducing staff and losing money and therefore not paying its past $1-$2 million per year tax.

Why? A reason you cannot legislate management — management — management.

Small companies require intense smart 14 hour a day management that almost always has stock benefits as the principal driving force. In our case, both larger unfamiliar buyers made mistake after mistake in their zeal to grow and now the government receives no operating profit tax and has about 75-100 less citizens on a payroll. Your 55% tax forced a sale and now the Government loses every year.

I paid taxes while earning my investment capital. I paid taxes while building a profitable company. I paid taxes when forced to sell because of estate taxes and if capable of saving any of the leftover, the government wants 55% of that at death! This is a very unfair tax on those willing to work extremely hard and take high risk. It is a very counterproductive tax for the Government. Please help repeal the Estate Tax Now.

Sincerely,

Frank B. Lynott

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