‘Case of the Week’ 5 (Stoa): Repeal the Estate Tax

Important Disclaimer: We pretty much just throw these together over the weekend, and don’t put a lot of work into them. Case of the Week cases are not subject to the same editorial process and stringent quality standards as the COG 2011 sourcebook, and are frequently contributed by non-COG authors. You will likely find material and sources in these cases that would not appear in the sourcebook. Also the backups are not intended to be complete. That said, we hope these cases will be useful to you; enjoy!

About the Author: Amber Sivils has debated in both TP and LD debate. Among her stellar debate records are her 2009-2010 finishes: 2nd at the Texas National Open, and 19th at the National Championship at Regents University. Amber and her partner, Kevin Behne, were famous for running the infamous duplex printing case in environmental policy year.

Strategy Notes

The strategy for this case is pretty simple – nobody likes taxes. The estate tax (also called the “death tax”) is especially bad, because it taxes the capital of a deceased person. Taxing capital is always bad for the economy, because it hurts private investment while gaining minimal benefit for the public sector. The estate tax was originally put in place to prevent a family dynasty (a family that gets rich, and stays rich for years because of the original rich person in the family) from arising. The problem is, that doesn’t actually stop because of the estate tax. What does happen is a poor family business can’t afford a 55% tax, and has to sell their business to have the money for that tax. In 2010, a two year relief period was set in place. So, at the end of 2012, the death tax rises from the grave to haunt everyone again. There’s tons of evidence that we should definitely repeal the death tax before that happens.

Strongest arguments for this case are definitely that the estate tax benefits nobody, and that the best solution is to make the relief period permanent. Statistically, the relief period’s shown that the death tax was just a bad tax.

Arguments to be prepared for: that very few people are taxed, that the estate tax is needed for government survival, and that the estate tax plays a key role in our economy (preventing dynastic wealth). As far as few people being taxed right now, that’s correct. However, that’s only true because we’re in a relief period at the moment. When the relief period ends, so does that number’s ability to stay small. The death tax generates about 1% of government’s wealth; they can survive just fine without 1%. And, the dynastic wealth argument is covered in disadvantage response five.

Best of luck, and have fun with this!

1AC: Repeal the Estate Tax

By Amber Sivils

Two things in life are certain: death and taxes. And, one thing is certain in death: a lot of taxes. For the past 95 years, the United States Federal Government has made dying an expensive task. If a person leaves behind any of their estate, the heirs of their estate can be taxed up to 55% by the federal government. Because dying shouldn’t be a financial struggle, my partner and I stand resolved: That the United States federal government should substantially reform its revenue generation policies.

Let’s look at a few key…

Definitions

…to guide our debate.

United States Federal Government: The government of the United States; the government of a community of independent and sovereign states, united by compact. (Ballentine’s Law Dictionary, Third Edition, © 1969)

Reform: To Change for the better. (The American Heritage® Dictionary of the English Language, Fourth Edition Copyright © 2009)

Revenue Generation Policy: Revenue generation depends primarily on three elements: tax policy, the revenue administration system and overall economic activity. (Center On International Cooperation 2007. Political Economy Research Institute “Options for Revenue Generation In Post-Conflict Environments” Article Written by: Michael Carnahan)

Estate Tax (also referred to as the “death tax”): A tax levied on the net value of the estate of a deceased person before distribution to the heirs. (Merriam Webster Online Dictionary 2011 Edition © 2011 Merriam-Webster, Incorporated)

Now that we have our definitions laid out, let’s take a look at what our current revenue generation policy is. We’ll do that through the core issue we refer to as:

Inherency

Inherency one: Federal estate tax in place since 1916

William Ahern September 19, 2010 [“The Estate Tax Is Foolish, Wasteful, Ineffective” (William Ahern is director of policy and communications at the Tax Foundation, a nonprofit think tank in Washington, D.C.)]
http://www.taxfoundation.org/news/show/26725.html

“Alas, this foolish tax is soon to be reinstated, possibly even retroactively. The tombstone should read “Federal Estate Tax, 1916-2009, RIP” but instead it will almost certainly rise from the dead and haunt our economy for many years to come.”

For the past 95 years, the federal government has maintained a high estate tax. However, in 2010, the federal government placed a two year waiver on the death tax. Unfortunately, as we see in Inherency point two:

Inherency two: Federal estate tax cuts expire in 2012

Shannon Bream, a journalist for Fox News on June 30, 2011 [“Fox’s ‘Straight News’ Campaigns For Estate Tax Repeal’ Bream was formerly an anchor for WBTV, WRC-TV, and WFTS-TV. Prior to being a news anchor, she practiced corporate law in Tampa, Florida.]
http://mediamatters.org/research/201106300001

“Estate tax opponents got their wish this year, when the tax was temporarily repealed. But the tax holiday will be short-lived because, under current law, the estate tax is scheduled to return next year with a top rate of 55 percent for estates larger than $1 million for individuals and $2 million for married couples.”

After 2011, the federal estate tax will return to a 55% rate. Let’s look at a few reasons why a 55% tax is detrimental in what we like to call:

Harms

Harm one: The death tax is an outdated and harmful tax

Patrick F. Fagan, PhD, July 26, 2010 [“How the Death Tax Kills Small Businesses, Communities—and Civil Society” Published by the Heritage Foundation (Fagan is Senior Fellow at The Family Research Council in Washington, D.C.)]
http://www.heritage.org/research/reports/2010/07/how-the-death-tax-kills-small-businesses-communities-and-civil-society

“The death tax generates about 1 percent of federal revenues. By generating that small a benefit to the fed­eral treasury, the death tax discourages investment and savings, undermines job creation, suppresses productivity and wage growth, hurts those whose sav­ings are tied up in land, hurts businesses owned by families, women, and minorities, and contradicts the American ideal of wealth creation.”

Aside from being useless and antiquated, the federal estate tax is also counterproductive at generating government revenue, as seen in:

Harm two: Increases in federal estate tax costly for state and local governments

Wall Street Journal July 2, 2011 [Written by Bill Batchelder (Speaker of the Ohio House of Representatives), Jack Boyle (co-founder of Citizens United to End Ohio’s Estate Tax), and Dick Patten (President of the American Family Business Foundation and the American Family Business Institute, also writes for the Christian Science Monitor, Washington Times, and many more)]
http://online.wsj.com/article/SB10001424052702304447804576414013906238754.html

“A 2009 Duquesne University study found that state and local governments lost some $3 in non-estate tax revenues for every $1 increase in federal estate tax revenue.”

In addition to being a counterproductive tax for the government, the federal estate tax causes numerous problems for the private sector.

Harm three: Federal estate tax is destructive for private businesses

Heritage Foundation July 20, 2010 “The Economic Case Against the Death Tax” [Curtis S. Dubay is a Senior Analyst in Tax Policy in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation]
http://www.heritage.org/research/reports/2010/07/the-economic-case-against-the-death-tax

“2010 is the only year since 1916 in which heirs to an estate will not have to pay the dreaded death tax. Victory for small businesses? Not yet—due to a legal quirk, the death tax is scheduled to come back to life in 2011. Studies, statistics, and real life have shown again and again that the businesses and families burdened with the death tax often see themselves forced to cut back on benefits, investments, and employees. The death tax keeps new jobs from being created, hurting not just the affected businesses, but the economy as a whole. Because it is a tax on capital, the death tax destroys as many as 1.5 million jobs that the economy needs as it struggles to recover”

The federal estate tax is destructive on every level of the economy, and, to alleviate that fatal tax from the economy, we offer the following:

Plan

Mandate one: The United States Federal Government will permanently repeal the federal estate tax.

Agencies and enforcement: The United States federal government, and the IRS (Internal Revenue Service)

Funding: No funding is necessary, as the affirmative plan is purely legislative.

Legislative intent: The affirmative team reserves the right to clarify the affirmative plan as needed throughout the remainder of the debate round.

With the affirmative plan presented, let’s look at how the plan effectively solves the problems presented earlier.

Solvency

Solvency one: Federal death tax should be repealed

William W. Beach November 29, 2009 [“Seven Reasons Why Congress Should Repeal, Not Fix, The Death Tax” Published by the Heritage Foundation. William W. Beach is the director of the Center for Data Analysis at the Heritage Foundation.] Brackets added for clarification. http://www.heritage.org/research/reports/2009/11/seven-reasons-why-congress-should-repeal-not-fix-the-death-tax

“What should Congress do? Some Members [of congress] want to permanently “fix” the death tax by reducing the top rate to 35 percent, which some pro-death tax policymakers suggest is a rate wealthy taxpayers could “afford.” However, this would be the wrong move for Congress to make. Instead, policymakers should do what their voters want them to do, as revealed in poll after poll: They should repeal this tax and kill it, once and forever.”

The federal death tax coming to a timely end would result in several significant advantages, as seen in:

Advantages

Advantage one: Economic benefit

Heritage Foundation July 20, 2010 “The Economic Case Against the Death Tax” [Curtis S. Dubay is a Senior Analyst in Tax Policy in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation]
http://www.heritage.org/research/reports/2010/07/the-economic-case-against-the-death-tax

“A large increase in employment is not the only benefit the economy would enjoy if Congress repealed the death tax. Additional benefits from full repeal of the estate tax include:

  • Increasing small business capital by more than $1.6 trillion;
  • Increasing the probability of hiring by 8.6 percent;
  • Increasing payrolls by 2.6 percent; and
  • Expanding investment by 3 percent.”

In addition to the economic benefit, removing the death tax would create 1.5 million jobs.

Advantage two: 1.5 million jobs created

Douglas Holtz-Eakin and Cameron T. Smith, February 2009 [(Dr. Douglas Holtz-Eakin and Cameron T. Smith February 2009 [Dr. Douglas Holtz Eakin is an Americaneconomist, former professor at Syracuse University, former Director of the Congressional Budget Office, and former chief economic policy advisor to US Senator John McCain’s 2008 presidential campaign. Cameron T. Smith was a policy intern at Lehman Brothers, is a special assistant to the President and Director of Energy policy at the American Action forum , and is a consultant at DHE consulting, LLC.) Published by the American Family Business Foundation “Changing views of the estate tax: Implications for legislative options”]
http://www.pacificresearch.org/docLib/20090706_DHE_AFBF_Estate_Tax.pdf

Repealing the death tax would:

  •  “Increase small business capital by over $1.6 trillion
  • Increase the probability of hiring by 8.6%
  • Increase payrolls by 2.6%
  • Expand investment by 3%
  • Create 1.5 million additional small business jobs
  • Slash the current jobless rate by .9%”

In conclusion:

Repealing the death tax would not only benefit small businesses, but would also be extremely beneficial for the American economy as a whole. While death and taxes are certain in life, taxes don’t have to be certain in death. In order to put this deadly tax to rest, I urge an affirmative ballot. Thank you for your time, and I now stand open for cross examination and points of clarification

Backup: Repeal the Estate Tax

OPENING QUOTES

95 years of death taxes

Heritage Foundation July 20, 2010 “The Economic Case Against the Death Tax” [Curtis S. Dubay is a Senior Analyst in Tax Policy in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation]
http://www.heritage.org/research/reports/2010/07/the-economic-case-against-the-death-tax

“2010 is the only year since 1916 in which heirs to an estate will not have to pay the dreaded death tax.”

INHERENCY

2010/2011 “exemption” only applicable to richest 35%

Rafael Ruano, an estate planning attorney and writer for AG Web writer, July 5, 2011 “Estate Tax Lingo” [Rafael Ruano is an estate planning attorney with Goyette & Associates in Gold River, California.]
http://www.agweb.com/article/report_2011_estate_tax_lingo/

“For 2011 and 2012, the federal estate tax exemption is $5 million, and the estate tax rate for estates valued at more than this amount is 35%. This means that an individual can transfer up to $5 million without incurring any federal estate taxes. A married couple can thus pass $10 million without incurring estate taxes (see “Portability”). Like the estate tax exemption, the gift tax exemption and generation skipping transfer tax exemption are $5 million each, and the tax rate for both of these taxes is also 35% (see “Generation-Skipping Tax” and “Gift Tax”).”

Exemptions expire after 2012

Rafael Ruano, an estate planning attorney and writer for AG Web writer, July 5, 2011 “Estate Tax Lingo” [Rafael Ruano is an estate planning attorney with Goyette & Associates in Gold River, California.]
http://www.agweb.com/article/report_2011_estate_tax_lingo/

“In 2013, the law reverts back to what it was in 2001—unless Congress acts and either extends the new set of laws or changes them yet again (see page 34 for details).”

Estate tax will return to top 55%

Shannon Bream, a journalist for Fox News on June 30, 2011 [“Fox’s ‘Straight News’ Campaigns For Estate Tax Repeal’ Bream was formerly an anchor for WBTV, WRC-TV, and WFTS-TV. Prior to being a news anchor, she practiced corporate law in Tampa, Florida.]
http://mediamatters.org/research/201106300001

“Estate tax opponents got their wish this year, when the tax was temporarily repealed. But the tax holiday will be short-lived because, under current law, the estate tax is scheduled to return next year with a top rate of 55 percent for estates larger than $1 million for individuals and $2 million for married couples.”

Information – Previous years’ death taxes

Heritage Foundation July 20, 2010 “The Economic Case Against the Death Tax” [Curtis S. Dubay is a Senior Analyst in Tax Policy in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation]
http://www.heritage.org/research/reports/2010/07/the-economic-case-against-the-death-tax

“The number of estates subject to the death tax has declined steadily since passage of the 2001 tax relief. That package steadily phased out the death tax by reducing its rate and increasing the portion of estates exempt from the death tax from $1 million to $3.5 million, before doing away with the death tax entirely in 2010. In 2000, before the tax relief packages began, 52,000 estates paid the death tax. As a result of the increased exemption level, by 2008 (the latest year of available data) just over 17,000 estates paid the death tax.”

At the end of 2012, tax rate returns to 55%

Tax Policy Center June 2, 2011 [“The Numbers” Tax Policy Center is a joint venture of the Urban Institute and Brookings Institution, and is made up of nationally recognized experts in tax, budget, and social policy.]
http://www.taxpolicycenter.org/taxtopics/estatetax.cfm

“Current law returns the exemption to $1 million and the top rate to 55 percent in 2013.”

HARMS

Unfair game – rich die rich, poor die poorer

Wall Street Journal July 2, 2011 [Written by Bill Batchelder (Speaker of the Ohio House of Representatives), Jack Boyle (co-founder of Citizens United to End Ohio’s Estate Tax), and Dick Patten (President of the American Family Business Foundation and the American Family Business Institute, also writes for the Christian Science Monitor, Washington Times, and many more)]
http://online.wsj.com/article/SB10001424052702304447804576414013906238754.html

“The owners of family businesses and family farms typically can’t afford such games. For all practical purposes, they’re cash-poor, with most of their capital—and net worth—tied up in land, buildings, equipment, inventory and payroll.”

Forced liquidation of family businesses

Shannon Bream, a journalist for Fox News on June 30, 2011 [“Fox’s ‘Straight News’ Campaigns For Estate Tax Repeal’ Bream was formerly an anchor for WBTV, WRC-TV, and WFTS-TV. Prior to being a news anchor, she practiced corporate law in Tampa, Florida.]
http://mediamatters.org/research/201106300001

“The federal estate tax can be especially tricky for many small, family-held businesses. That’s because, when an individual dies, what he or she leaves behind can be subject to significant taxation, even if it’s primarily invested in a family business. If the entity doesn’t have enough cash on hand to meet the obligation, heirs are often forced to sell the business in order to raise enough money to satisfy the tax bill.”

Expiration of relief period is an impending economic Armageddon

Heritage Foundation July 20, 2010 “The Economic Case Against the Death Tax” [Curtis S. Dubay is a Senior Analyst in Tax Policy in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation]
http://www.heritage.org/research/reports/2010/07/the-economic-case-against-the-death-tax

“The phase-out of the death tax was long overdue and represents Congress’s recognition of the economic damage the death tax causes. But the expiration of the death tax is only temporary. On January 1, 2011, it will come back to life with its rate as high and exemption amount as low as before the 2001 tax relief. Congress passed the 2001 tax bill under budget reconciliation rules. Policies passed under reconciliation cannot extend outside a 10-year budget window, so the current law has always included the resurrection of the death tax in 2011 despite the congressional vote for its permanent extinction.”

Death tax chokes economic growth

Heritage Foundation July 20, 2010 “The Economic Case Against the Death Tax” [Curtis S. Dubay is a Senior Analyst in Tax Policy in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation]
http://www.heritage.org/research/reports/2010/07/the-economic-case-against-the-death-tax

“The death tax slows economic growth, destroys jobs, and suppresses wages because it is a tax on capital and on entrepreneurship. Capital is any resource that individuals or businesses use to generate income. Like anything else, when the income accruing to capital is taxed, its price rises and less of it is purchased. Less capital means slower productivity growth, lower wages, and fewer jobs. As such, taxes on capital should be minimal or nonexistent.”

Undermines job creation

Heritage Foundation July 20, 2010 “The Economic Case Against the Death Tax” [Curtis S. Dubay is a Senior Analyst in Tax Policy in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation]
http://www.heritage.org/research/reports/2010/07/the-economic-case-against-the-death-tax

“Because the death tax discourages saving and investing, it also undermines job creation. Resources that otherwise would have been available for businesses to use to expand their operations and add new workers are consumed by people who deem it wiser to spend the money now than invest it knowing their inheritors will have to pay the death tax later. Furthermore, resources that businesses otherwise would have used to add jobs are diverted to protect families from the death tax.”

Economic butterfly effect

Heritage Foundation July 20, 2010 “The Economic Case Against the Death Tax” [Curtis S. Dubay is a Senior Analyst in Tax Policy in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation]
http://www.heritage.org/research/reports/2010/07/the-economic-case-against-the-death-tax

“Since the death tax lowers saving and investing, there are fewer resources available for businesses to purchase additional tools and equipment or replace old and worn-out pieces with new ones. That means less capital their workers can use, and therefore the workers’ productivity does not increase as much as it would have in the absence of the death tax. If the business cannot replace worn-out capital, the productivity of its workers declines. Wages are a function of a worker’s productivity, growing more slowly when productivity slows, and declining when productivity decreases.”

Targets small family businesses

Heritage Foundation July 20, 2010 “The Economic Case Against the Death Tax” [Curtis S. Dubay is a Senior Analyst in Tax Policy in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation]
http://www.heritage.org/research/reports/2010/07/the-economic-case-against-the-death-tax

“Estates that consist largely of family-owned businesses are the most vulnerable to the death tax. Family-owned businesses and the families that own and operate them are synonymous for purposes of the death tax. The value of the portion of a business owned by a deceased person, including the business’s assets, such as equipment and property, is included in their estate. The high value of these assets is the cause of the problem for family-owned businesses.”

Small businesses forced to liquidate

Heritage Foundation July 20, 2010 “The Economic Case Against the Death Tax” [Curtis S. Dubay is a Senior Analyst in Tax Policy in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation]
http://www.heritage.org/research/reports/2010/07/the-economic-case-against-the-death-tax

“If a business’s available cash does not cover the full estate tax bill, the family must sell some of its assets—despite their necessity for the operation of the business. The forgone assets the business sells to pay the death tax lowers its income-generating capability, forcing it to reduce wages or let go of some existing workers because of reduced capacity. Even if the business can pay the death tax liability without reducing its workforce or lowering wages, it can no longer use the resources diverted to paying the tax bill to expanding the business, adding workers, or raising wages.”

Large companies avoiding tax causes economic damage

Heritage Foundation July 20, 2010 “The Economic Case Against the Death Tax” [Curtis S. Dubay is a Senior Analyst in Tax Policy in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation]
http://www.heritage.org/research/reports/2010/07/the-economic-case-against-the-death-tax

“Even though they face large death tax bills, estates from wealthy families pay considerably lower taxes than they otherwise would—because of estate tax lawyers and planners. Wealthy families hire expensive estate lawyers to arrange their affairs in a legal manner to minimize the impact of the death tax on their estates, or in some cases escape liability all together. Estate tax lawyers and planners have an obvious vested interest in seeing the death tax remain in place. As long as it does, they can continue to collect lucrative fees for arranging estates to minimize death tax liability. The fees paid by families to minimize their death tax liability are a drag on economic growth. The families could invest the resources they use to protect their estates so businesses and entrepreneurs could create new jobs; instead the money is diverted to protect the estate from the death tax.”

Outdated tax

Heritage Foundation July 20, 2010 “The Economic Case Against the Death Tax” [Curtis S. Dubay is a Senior Analyst in Tax Policy in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation]
http://www.heritage.org/research/reports/2010/07/the-economic-case-against-the-death-tax

“Outside the narrow special interests that benefit from the death tax, there no longer exists any justification for the tax. When Congress passed the death tax in 1916, it was originally intended to serve two purposes: raise revenue for the federal government (World War I was the original impetus for extra revenue); and prevent the build-up of wealth in a concentrated number of families. The death tax serves neither of these purposes today.”

Anyone taxed for passing estate is too many taxed

Heritage Foundation July 20, 2010 “The Economic Case Against the Death Tax” [Curtis S. Dubay is a Senior Analyst in Tax Policy in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation]
http://www.heritage.org/research/reports/2010/07/the-economic-case-against-the-death-tax

“A common argument in favor of the death tax is that it only affects a small number of estates and as such has a small impact on the economy. By that logic, a tax that only one taxpayer paid would be an ideal tax, even if that tax ground the economy to a halt. The number of taxpayers that pay a particular tax is economically irrelevant. What matters is the impact the tax has on the economy. By this more accurate metric the death tax is a poor tax because it is a large weight dragging down economic growth.”

Estate tax still damaging economy, despite reductions in estates being taxed

Heritage Foundation July 20, 2010 “The Economic Case Against the Death Tax” [Curtis S. Dubay is a Senior Analyst in Tax Policy in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation]
http://www.heritage.org/research/reports/2010/07/the-economic-case-against-the-death-tax

“Fewer estates paying the death tax has reduced the economic cost it imposes, but as long as the death tax remains in place it will continue to slow economic growth, destroy jobs, and lower wages. It is little consolation to workers that remain unemployed or see their pay stagnate because of the death tax that the impact of the tax has been slightly lessened.”

Disproportionate tax – rich get exemptions and poor have to pay

Heritage Foundation July 20, 2010 “The Economic Case Against the Death Tax” [Curtis S. Dubay is a Senior Analyst in Tax Policy in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation]
http://www.heritage.org/research/reports/2010/07/the-economic-case-against-the-death-tax

“According to data from the Internal Revenue Service “smaller estates (under $3.5 million) make up the bulk of filers—more than 60 percent between 2002 and 2007. Large estates (over $10 million), however, contributed between 18 percent and 30 percent of the total revenue in the same time frame, indicating a disproportionate distribution of tax liability.”[10] Subjecting these estates to the death tax again would continue to put a large number of workers at risk of seeing their wages idle or their jobs destroyed.”

SOLVENCY

Historical precedence – Ohio alleviated tax burdens

Wall Street Journal July 2, 2011 [Written by Bill Batchelder (Speaker of the Ohio House of Representatives), Jack Boyle (co-founder of Citizens United to End Ohio’s Estate Tax), and Dick Patten (President of the American Family Business Foundation and the American Family Business Institute, also writes for the Christian Science Monitor, Washington Times, and many more)]
http://online.wsj.com/article/SB10001424052702304447804576414013906238754.html

“The end of the death tax, which goes into effect on Jan. 1, 2013, will help stop the hemorrhaging of small businesses and jobs from the Buckeye State. Ohioans had suffered long enough with the levy on inheritances, with a 6% tax on personal and business assets above the $338,333 exemption, up to $500,000, and a 7% tax on assets above $500,000. The death tax was a major reason that business, jobs and capital have fled the state.”

Death tax should be repealed before relief expires

Heritage Foundation July 20, 2010 “The Economic Case Against the Death Tax” [Curtis S. Dubay is a Senior Analyst in Tax Policy in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation]
http://www.heritage.org/research/reports/2010/07/the-economic-case-against-the-death-tax

“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.”

Time for the death tax to die

Heritage Foundation July 20, 2010 “The Economic Case Against the Death Tax” [Curtis S. Dubay is a Senior Analyst in Tax Policy in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation]
http://www.heritage.org/research/reports/2010/07/the-economic-case-against-the-death-tax

“It is long past time for Congress to repeal the death tax for good. It serves none of the original purposes Congress intended in 1916, and it presents a significant danger for family-owned businesses. Because it is a tax on capital, it is destroying some 1.5 million jobs that the economy desperately needs as it struggles to recover.”

ADVANTAGES

Eliminating the federal estate tax = $9.3 billion for states

Wall Street Journal July 2, 2011 [Written by Bill Batchelder (Speaker of the Ohio House of Representatives), Jack Boyle (co-founder of Citizens United to End Ohio’s Estate Tax), and Dick Patten (President of the American Family Business Foundation and the American Family Business Institute, also writes for the Christian Science Monitor, Washington Times, and many more)] [*Study done by Antony Davies (an associate professor of economics at Duquesne University) and Pavel Yakovlev (an assistant professor of economics at Duquesne University)]
http://online.wsj.com/article/SB10001424052702304447804576414013906238754.html

“Overall, the study* calculated, eliminating the federal estate tax would boost state and local tax revenues by approximately $9.3 billion annually.”

Create 1.5 million jobs

Heritage Foundation July 20, 2010 “The Economic Case Against the Death Tax” [Curtis S. Dubay is a Senior Analyst in Tax Policy in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation]
http://www.heritage.org/research/reports/2010/07/the-economic-case-against-the-death-tax

“The most recent study on the effect on employment from repeal of the death tax by Douglas Holtz–Eakin and Cameron Smith, completed in 2009, found that 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. The study found that full repeal of the death tax would create 1.5 million jobs”

Comprehensive economic benefit

Heritage Foundation July 20, 2010 “The Economic Case Against the Death Tax” [Curtis S. Dubay is a Senior Analyst in Tax Policy in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation]
http://www.heritage.org/research/reports/2010/07/the-economic-case-against-the-death-tax

“A large increase in employment is not the only benefit the economy would enjoy if Congress repealed the death tax. Additional benefits from full repeal of the estate tax include:

  • Increasing small business capital by more than $1.6 trillion;
  • Increasing the probability of hiring by 8.6 percent;
  • Increasing payrolls by 2.6 percent; and
  • Expanding investment by 3 percent.”

DISADVANTAGE RESPONSES

Historical Precedence – Ohio killed off an $8 billion debt without estate tax

Wall Street Journal July 2, 2011 [Written by Bill Batchelder (Speaker of the Ohio House of Representatives), Jack Boyle (co-founder of Citizens United to End Ohio’s Estate Tax), and Dick Patten (President of the American Family Business Foundation and the American Family Business Institute, also writes for the Christian Science Monitor, Washington Times, and many more)]
http://online.wsj.com/article/SB10001424052702304447804576414013906238754.html

“Ohio Gov. John Kasich made good on a major campaign promise Thursday, killing the state’s estate tax in the process of enacting the 2012-13 budget. He also managed to kill off an $8 billion deficit without raising taxes—a model for fiscally squeezed states nationwide.”

Estate tax not necessary for government survival

Wall Street Journal July 2, 2011 [Written by Bill Batchelder (Speaker of the Ohio House of Representatives), Jack Boyle (co-founder of Citizens United to End Ohio’s Estate Tax), and Dick Patten (President of the American Family Business Foundation and the American Family Business Institute, also writes for the Christian Science Monitor, Washington Times, and many more)]
http://online.wsj.com/article/SB10001424052702304447804576414013906238754.html

“While some opponents of repeal defend the death tax on the grounds that the state, like the federal government, needs the revenue, the truth is it yielded little revenue—around 2% of the average local jurisdiction’s revenues in Ohio, less than two-tenths of 1% for Columbus, and around 1% for Washington.”

Not a vital source of revenue

Heritage Foundation July 20, 2010 “The Economic Case Against the Death Tax” [Curtis S. Dubay is a Senior Analyst in Tax Policy in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation]
http://www.heritage.org/research/reports/2010/07/the-economic-case-against-the-death-tax

“The death tax is no longer a vital source of federal revenues. In 2008, it raised about $24 billion, just above 1 percent of total federal tax collections. This is down considerably from 1940, when the estate tax raised more than 5 percent of all federal revenue.”

No government revenue lost

Heritage Foundation July 20, 2010 “The Economic Case Against the Death Tax” [Curtis S. Dubay is a Senior Analyst in Tax Policy in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation]
http://www.heritage.org/research/reports/2010/07/the-economic-case-against-the-death-tax

“Proponents of the death tax argue that the federal government cannot afford to repeal the tax because doing so would increase the deficit too much. But repealing the death tax does not mean assets transferred at death would be tax-free. Instead, the heirs of the estate would pay capital gains taxes on the assets they acquire when they choose to sell them. The revenue from higher capital gains taxes combined with the increased revenue from the income tax (due to higher economic growth from repealing the death tax) means in the long run there would be no revenue loss.”

Death tax doesn’t prevent dynastic wealth

Heritage Foundation July 20, 2010 “The Economic Case Against the Death Tax” [Curtis S. Dubay is a Senior Analyst in Tax Policy in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation]
http://www.heritage.org/research/reports/2010/07/the-economic-case-against-the-death-tax

“The death tax is no longer a vital source of federal revenues. In 2008, it raised about $24 billion, just above 1 percent of total federal tax collections. This is down considerably from 1940, when the estate tax raised more than 5 percent of all federal revenue.[6] Nor is the death tax necessary to prevent the accumulation of wealth in a limited few families. In today’s modern marketplace the well-off are more likely to accumulate their fortunes by creating new and innovative products demanded by the rapidly expanding global marketplace than through inheritance. The ability to make vast fortunes in the United States is not restricted to family lines or a lucky few. Statistics on income show that each American has ample opportunity to earn high incomes and accumulate wealth while doing so. Statistics also show that Americans have an equal chance of moving down the income scales. The estate tax is not necessary to ensure a more equal distribution of wealth. The opportunity to earn high incomes, and the equally high probability of earning lower incomes, work well enough on their own.”

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