KILLING THE DEATH TAX
November 30, 2009
In the coming weeks, Congress will once again take up debate on the dreaded estate tax (also known as the "death tax"). The death tax expires for one year, beginning on January 1, 2010, before coming back in full force on January 1, 2011. The death tax is a drag on America's family-owned businesses, destroys jobs, and lowers wages while raising little revenue. As such, Congress should repeal the estate tax once and for all to remove an unfair burden from the backs of American family-owned businesses and their workers, says Curtis S. Dubay, a Senior Analyst with the Heritage Foundation.
A recent study found that a full repeal of the death tax would create 1.5 million jobs. This is half the number of jobs President Obama claimed the $800 billion stimulus package would create -- at one-fifth the price, notes Dubay.
Additional benefits from full repeal of the estate tax include:
- Increasing small business capital by over $1.6 trillion.
- Increasing the probability of hiring by 8.6 percent.
- Increasing payrolls by 2.6 percent.
- Expanding investment by 3 percent.
- Slashing the current jobless rate by 0.9 percent.
The death tax also impedes economic growth because it stands opposed to the principles of virtue, thrift, and savings that made America the strongest nation on earth. For those Americans who think that their estates may one day pay federal death taxes, the death tax increases their incentive to consume their wealth today rather than invest and make more money in the future. Instead of putting their money in the hands of entrepreneurs or investing more in their own economic endeavors, Americans get the unmistakable message to consume it now, says Dubay.
It is time for Congress to kill the death tax once and for all. Doing so would lift a tremendous weight off the shoulders of America's family-owned businesses, create jobs for out-of-work Americans, and help the ailing economy, says Dubay.
Source: Curtis S. Dubay, "Estate Tax a Killer for Family-Owned Businesses and Their Workers," Heritage Foundation, WebMemo No. 2703, November 19, 2009.
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