NCPA - National Center for Policy Analysis

Death Tax Repeal = Job Creation

August 17, 2010

Due to a legal quirk, the death tax is scheduled to come back to life in 2011.  The renewed death tax would once again inflict serious harm on family businesses, workers and the economy.  Congress should act before the end of the year to repeal this economically harmful tax permanently, says Curtis S. Dubay, a senior analyst in tax policy at the Heritage Foundation. 

Study after study shows that repealing the death tax would create jobs, says Dubay: 

  • In an econometric simulation run in 1993, when the death tax's exemption was $600,000, professor Richard E. Wagner found that if Congress repealed the death tax it would create 228,000 jobs.
  • In 1996, Heritage Foundation economist William W. Beach found that repealing the death tax would create an average of 145,000 jobs annually.
  • In an update to the 1996 research, Beach determined repealing the death tax would create 142,000 jobs in 2001.
  • Gary and Aldonna Robbins' 1999 analysis concluded that the economy would create 240,000 jobs 10 years after repeal of the death tax.
  • A study in 2001 by the Institute for Small and Emerging Businesses found that repealing the death tax would create 131,000 jobs.
  • In a later analysis in 2003, Beach's research established that repealing the death tax would create between 170,000 and 250,000 jobs.  

The most recent study on the effect on employment from repeal of the death tax by Douglas Holtz-Eakin and Cameron Smith, was completed in 2009.  They found: 

  • Even with a reduced number of estates paying the death tax in recent years, the death tax continues to destroy an unacceptable amount of jobs.
  • Full repeal of the death tax would create 1.5 million jobs. 

Source: Curtis Dubay, "The Economic Case Against the Death Tax:  Death Tax Repeal = Job Creation," Heritage Foundation, July 20, 2010.   

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