ICBA said the proposed amendment to Section 2704 of the tax code would have increased by more than 30 percent the estate tax on family-owned community banks and other small businesses.
“ICBA thanks the Treasury Department for withdrawing this costly and harmful tax increase, which would have imposed a significant financial hardship on many family-owned community banks and the communities they serve,” ICBA President and CEO Camden Fine said. “Today’s announcement will help ensure that community banks can continue making loans and serving local communities to support economic and job growth nationwide.”
The proposed rule would have effectively ended estate planning techniques commonly used to transfer community banks and other family-owned businesses to subsequent generations. To support its argument, ICBA cited a study released in May that said the proposed rule would cost the U.S. economy nearly 106,000 jobs and reduce the gross domestic product by more than $150 billion over the next decade.
ICBA supports a full repeal of the estate tax, as outlined in its paper, Principles for Tax Reform, and its Plan for Prosperity regulatory relief platform.