Ehrlich on Washington column, March 20, 2000

MEWS FROM Robert L. Ehrlich, Jr. Second Congressional District of Maryland 1 407 York Road, Suite 304 Lutherville, Maryland 21093 315 Cannon House Office Building Washington, D.C. 205 1 5 EHRLICH ON WASHINGTON Week of March 20, 2000 By Congressman Robert L. Ehrlich, Jr. Relief to the Heart of Maryland’s Economy We have read about the extraordinary number of record breaking billion dollar mergers between major corporations which have occurred over the past year. This news may lead us to believe that our economy revolves around big business. The reality, however, is small businesses (50 or fewer employees) are the heart of the American economy, both in Maryland and across the nation. In fact, small businesses are America’s largest job generators, creating over two-thirds of the net new jobs in the last 25 years and employing one-half the private workforce. Last week, the Republican-led House of Representatives voted to provide these job producing small businesses with new tax relief provisions designed to create even more jobs and promote continued economic growth into the 21s1 century. We passed H.R. 3081, The Wage and Employment Growth Act, which provides retirement security, eases the estate or "death" tax, increases health care coverage, and moves more people from welfare to work. Retirement Security H.R. 3081 increases the amount of money employees can contribute to 401(k)s and other retirement plans. House Republicans cut the red tape, making it easier for small businesses to offer pension plans to their employees and for employees to roll their retirement savings over to different types of plans upon changing jobs. This policy change addresses the needs of an increasingly mobile workforce — the average worker will hold nine jobs by age 32 and typically does not stay in any one job for more than five years. Death Tax Relief Every year, upon the death of a relative, thousands of farmers and small businesspeople are hit with the death tax when the family business passes on to the next generation. Currently, when someone dies, the federal government assesses a tax of up to 55 percent of the estate’s value. This has resulted in approximately 70 percent of family-owned businesses not being inherited by the immediately surviving generation, and even more businesses not reaching the third