CONGRESSIONAL STUDY: DEATH TAX DESTRUCTIVE TO U.S. ECONOMY
The Joint Economic Committee of Congress says that the federal estate tax fails to reduce inequality and harms many small businesses.
WASHINGTON, DC. - - The Joint Economic Committee of Congress says that the federal estate tax fails to reduce inequality and harms many small businesses. The study, Costs and Consequences of the Federal Estate Tax, makes the case that the tax ought to be eliminated once and for all. U.S. Rep. Kenny Hulshof (R-MO) and U.S. Senator Jon Kyl (R-AZ), leading sponsors of legislation to kill the death tax, hailed the study as conclusive evidence that the death tax should die now and forever.
"The death tax is the most unfair and least productive federal tax," stated Hulshof. "It benefits the U.S. Treasury very little, but hits small businesses and farmers very hard. I call on my colleagues to read this report with an open mind. They will see that the time has come to lift this unnecessary burden from the shoulders of taxpayers once and for all."
"The JEC report confirms what we've known about the death tax for years," said Kyl, "that it hurts economic growth by forcing families and family businesses to spend valuable resources trying to avoid paying the death tax, rather than putting those resources to work creating jobs."
Among the findings of JEC's study (www.house.gov/jec):
* The benefits of the tax are often overstated, and in any case are far smaller than the documented costs. In light of this finding, there is no compelling reason to keep the tax, and a number of reasons to reduce or abolish it.
* The estate tax impedes economic growth through high compliance costs and economic inefficiencies, and has reduced the stock of capital in the economy by approximately $847 billion.
* The tax hinders entry into self-employment and breaks up family-run businesses, many of which lack the liquid resources needed to meet their estate tax obligation. The tax is also in impediment to upward income and wealth mobility.
* Research indicates that the estate tax is an ineffective tool for fighting wealth and income inequality. In fact, estimates indicate that the tax exacerbates inequality.
"Death should not be a taxable event," Hulshof said. "To small business owners and their families, this punitive tax threatens to undo a lifetime of hard work and thrift. This is not right and needs to be fixed now."
"The Senate intends to deal with the death tax in the next couple of weeks," said Kyl. "And this report reaffirms that we must do whatever is necessary to bring a permanent end to the damaging burden of this tax as soon as we can."