PLANO, Texas – Free Market Foundation released a study today in conjunction with the Family Research Council and the American Family Business Foundation which evaluates the significant, negative impacts of the federal estate tax (the “death tax”) on the national and state economies, including Texas. The report, “Repealing Death Tax Will Create Jobs and Boost Economy,” explains how the best option in view of the economy is a repeal of the death tax.
“Allowing the death tax to come back and taking one-half of a person’s assets at death is not only morally wrong, it would destroy over 30,000 Texas jobs,” said Kelly Shackelford, President/CEO of Free Market Foundation.
This paper, which combines two recent analyses of the death tax by Douglas Holtz-Eakin, former director of the Congressional Budget Office, and Stephen Entin, president and executive director of the Institute for Research on the Economics of Taxation (IRET), considers the various options available to Congress, including reversion to the 2001 tax rate and exemption, reduction, and elimination, and the economic ramifications of each option.
Though Congress set an annual reduction and increased exemption schedule for the death tax in 2002, Congress will revisit the death tax soon, as it is slated for elimination in 2010 before reverting to the high marginal tax rate and low exemption of the 1990s in 2011. According to Holtz-Eakin, such a reversion would eliminate 33,830 jobs in Texas alone. By contrast, eliminating the estate tax would create 101,489 jobs in Texas.
As the paper reveals, the best outcome is elimination of the death tax; a full repeal increases jobs and expands the economy, as well as provides the largest increase in government revenue.
Click here to read the full study.