Estate Tax Drags Down the Economy, Hatch Says
ESTATE TAX DRAGS DOWN THE ECONOMY, HATCH SAYS
Sen. Orrin G. Hatch (R-Utah) today voted to move forward on a bill to repeal the estate tax, which he considers a punitive tax that harms economic growth. The Senate voted 57 to 41 to close off debate on H.R. 8, the Death Tax Repeal Permanency Act, falling just three votes shy of the 60 needed to enable an up-or-down vote.
"A sensible tax system should tax income just once and at a low rate the inheritance tax does neither," Hatch said. "Because of the estate tax, people save less, and businesses have less capital available to use to grow, expand, and create jobs."
At 46 percent, the United States is reported to have the third-highest estate tax rate among the 50 largest economies in the world. Hatch argues that repealing the estate tax would increase economic productivity, which has proven to raise overall tax revenues despite previous tax cuts.
"The Bush Administration's signature economic achievement has been to lower the tax on dividends and capital gains, a change that deserves much of the credit for the strong productivity growth of the past three years," Hatch said. "We're expected to collect 30 percent more tax revenue this year than we did just two years ago. This is really incredible, especially when you consider that the economy was headed for a free fall just five years ago. Our efforts to cut taxes have saved our economy over the last five years."
Hatch counters criticism that the estate tax repeal would only benefit the rich, at the expense of the poor. He agrees with economists who state the U.S. tax code should be designed solely to collect money in the most efficient way possible, so that it does the least damage to economic growth. From that beginning, Congress can then move address distributional issues outside of the scope of the tax code.
"Strong economic growth is in everyone's best interest, especially those on the lower rung of the economic ladder." Hatch said. "The way to help the people at the bottom of the ladder is not to pull down those at the top of the ladder. We help those at the bottom by giving them the education and training they need to obtain - and keep - good jobs."
http://hatch.senate.gov/index.cfm?FuseAction=PressReleases.Detail&PressRelease_id=1589&Month=6&Year=2006