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  • Repealing the Death Tax Would Create 1.5 Million Jobs

    Congress will take up debate on the dreaded Death Tax once again in the coming weeks. It will do so because the Death Tax expires for one year starting January 1, 2010. But like the villain in a horror movie, it will rise from the dead with its full power in tact on January 1, 2011. The one-year expiration will likely incite Congressional debate because some would like to keep it from expiring this year all together.

    The one year abolition of the tax is the end of a years-long process of reducing the tax that began as part of the 2001 tax cut. The 2001 cut reduced the rate of the Death Tax incrementally from 55 percent to 45 percent this year. During the same time the exemption, or amount of an estate that is not subject to taxation, increased from $1 million to $3.5 million. After a period of winding the tax down, the 2001 tax cut abolished the Death Tax for 2010. Because of the rules governing the cuts, the tax only disappears for one year before it comes back from the dead with a rate and exemption it had before the cuts (55 percent rate and $1 million exemption).

    Some argue that Congress should not allow the tax to temporarily expire and should instead extend the Death Tax through 2010 at its current rate and exemption level (45 percent and $3.5 million), or revert to the pre-2001 tax cut level in order to reduce the deficit. This is not a serious argument. In 2007, the Death Tax raised about $25 billion, or 1 percent of all federal tax revenues. Even if it came back to life at its full 55 percent rate and $1 million exemption, the White House Office and Management and Budget (OMB) estimates it will raise $130 billion in total from 2009 through 2014. The Congressional Budget Office (CBO) calculates the cumulative deficit in those years to be $5.6 trillion. Repealing the Death Tax would be a drop in the bucket comparably. Spending, not tax cuts, is the real driver of large deficits. For instance, the $800 billion stimulus bill – just one example of Congressional profligacy – will cost about 6 times what full repeal of the Death Tax would cost.

    Such an argument becomes even more dubious when considering the amount of jobs full repeal of the Death Tax could create in comparison to the stimulus’ inability to create any jobs. According to “Changing Views of the Estate Tax: Implications for Legislative Options,” a recent study by former CBO Director Douglas Holtz-Eakin, full repeal of the Death Tax would create 1.5 million new jobs. Those 1.5 million jobs would be almost half of the jobs President Obama claimed the stimulus would (but didn’t) create, and they would be created at a considerably lower cost than the stimulus.

    Holtz-Eakin also found that repealing the Death Tax would:

    • Increase small business investment capital by more than $1.6 trillion each year;
    • Increase the probability of hiring by 8.6 percent;
    • Increase payrolls 2.6 percent;
    • Expand investment 3 percent; and
    • Drop the unemployment rate 0.9 percent.

    These findings support Heritage Foundation research that found the Death Tax:

    • Discourages savings and investment;
    • Undermines job creation and wage growth;
    • Prevents economy from achieving investment potential; and
    • Contradicts central promise of American life: wealth creation.

    Now that Congress has the chance to drive a stake through the heart of this economically damaging tax it should do so. Dispatching the Death Tax once and for all would be a boon to the economy at the very time it desperately needs it and restore the promise of the American Dream that if you work hard and live a virtuous life, you can leave the fruits of your labor to succeeding generations.

    Posted in Economics [slideshow_deploy]

    32 Responses to Repealing the Death Tax Would Create 1.5 Million Jobs

    1. Leon, Durango, CO says:

      This is how Demo-crats spear HOPE, they speak it but then they destroy it in every meaningful way. Do you remember when it was illegal to lie? Yeah, they made it legal to lie in politics, what? Thirteen years ago? So when Obama says hope, he actually means hopelessness, like "You will never ever get ahead in America, not even if your Rich Uncle dies!" See? That's Obama hope, hope you get some Welfare, hope that money is worth anything by the time you retire.

    2. Freedom of Speech TX says:

      Of all the taxes, this one is the most shameful.

      People cannot even leave their estates and earnings (for which they already paid taxes) to their heirs without the addition of a death tax.

      How insulting is that? When you die the government will ____ you on the way out the door.

      I don't care how much money a person accumulates. It is theirs. These blood-sucking parasites will just not let go.

    3. Paula Lovell Nashv says:

      Amen. Slay the death tax.

    4. Jack E Lohman says:

      Yea, problem is, the jobs will be in India or China.

    5. Jack E Lohman says:

      So right-wingers object to poor people getting money they didn't work for, but have no problem when the kids of rich people get money they also didn't work for? Interesting.

    6. Joe Huss DePere, WI says:

      I work my tail off to make ends meet and hopefully save a little. Why can't i leave what's left to my children so they have a chance at a better life? Because the lazy morons on the left want me support them. Another handout to the useless and incompetant. We keep earning money so the liberals can steal it from us. The money that was earned by the rich was already taxed. Leave the rest of it alone!

    7. AT, MD says:

      Yeah, Jack, right-wingers are generally stupid. They don't understand that taxes are the only way to enrich the government. But evidently you are a fan of that, and a smarter one as a whole. I even imagine that you overpay taxes so the wealth you produce can be spread for the common good by highly qualified government personnel.

      Sarcasm off: So, you really don't understand the difference between handouts and income from work, or you are testing your Demagogue 101 skills?

    8. Tim Az says:

      If you believe the death tax will rest at 55% you obviously are'nt keeping with current events at the Capitol. They'll be wanting a lot more than that.

      How's that trickle up poverty working out for you?

    9. Jack E Lohman says:

      No AT, I really think we should eliminate all taxes for the rich so they can trickle it back down to us. Can you imagine how that would grow the economy? More bonuses for the bankers, I say!

    10. Freedom of Speech, T says:

      Jack Lohman,

      The "kids of rich people". That says it all doesn't it? Typical class warfare.

      I am not "rich" even by Obama's definition.

      I am envious of those who have used their brains, intellect, hardwork, and who have taken great finanical risks to achieve what they have. Their wealth had to start somewhere.

      I want the American dream to remain a reality. Where there is an "opportunity" to achieve wealth without the government telling me how much THEY think I deserve!

      One cannot achieve this in a socialist/marxist state unless one is a member of the ruling elite.

      Jack, you ever heard of the progressive tax system we already have in place? How about the countless hundreds of billions we have poored into Medicaid, SS Disability for drug addicts and other social maladies, public schools, and every kind of welfare system one can imagine for the poor? Your argument is weak.

      The problem with you people is that THERE IS NEVER ENOUGH TO SATISIFY YOU. So, instead the beloved liberals keep finding ways to pick pocket working Americans and throw up more obstacles to prevent more creation of wealth.

      And the President has the "audacity" to label conservatives as extremists?

    11. Bob J, PA says:

      Seems to me the left needs a Economics 101 course and maybe a morality class too. They just don't understand that government is not the answer for their families, they are, and would know that if they would become more responsible for their own welfair. If done things would fall into place for others because good men are basically generous.

      Enriching government AT takes freedom from the people.

      After all, a government big enough to give you everything you want is strong enough to take everything you have. And I guess you think your government is hearing the American people and doing it's bidding.

    12. Da Dog says:

      What a person does with the results of his hard work is not the business of the government or of yours either, Jack. I certainly resent the fact that the government holds a gun to my head and confiscates the fruits of my labors and redistributes it to those who do nothing. The spirits of self-reliance and responsibility have been destroyed by creating an entitlement mentality and it will eventually lead to the downfall of this once great nation. I'll never forget the sight of all those people just standing around waiting in the aftermath of Katrina. See what handouts do, Jack. What would happen if no one came? The question remains; What will happen when there is nothing left to take from the producers to give to the takers? People have choices, Jack. Some get off their asses and take care of themselves while others expect handouts. And, most of this is not the result of inability to work – it's a result of just being too lazy to do so. You can thank your "gubmint" for creating this situation, Jack.

    13. Ralph Petrillo, Mama says:

      The best solution for the estate tax or the death tax is to have an estate tax of $ 2 million dollars for each dependent that a parent or parents have. So a family with one child would be able to pass on $ 2 million before facing the tax, while a family of five would be able to pass on ten million, with each child receiving $ 2 million. Since most people have paid taxes to develop their fortunes, the estate tax in a way is a form of double taxation. To make up for this , the rate of taxation should be dropped to the long term capital gains tax which is 15% currently , and a 5% state tax would be added for all states. All individuals should be able to afford an insurance policy that would cover the cost of this one time tax of 20% on all estates after applicable deductions.

      There should be no further exemptions for the government needs to raise capital currently. No trusts, charities, foundations would be exempt from the tax. Individuals should make donations to charities not based on taxation but based on merit.

    14. Peter Asher says:

      Jack is only partially dead wrong.The evil of the death tax is that it destroys businesses that employ heirs and others.

      However,an inheritance tax levied on purely paper assets that enable no productivity could be a substantial benefit as it would would only claim funds from non-productive profit and the dichotomy would be an incentive for wealthy people to put their money to work before they pass it on.

      BTW, anyone thinking that buying stocks other then IPO's is putting money to work should read http://takeamericaforward.com/economy/percieved-w

    15. John, Colorado says:

      The stupidity of “spread-the-wealth” (as long as it is someone elses wealth) liberals never ceases to amaze me.

    16. Thomas J says:

      Jack E Lohman compares rich kids getting their parents wealth to poor people getting government help? Pull your head out Jack, we didn't "give" their parent's their wealth through taxes. How on earth can you compare these two things. I worked hard all of my adult life to rightfully acquire my wealth and when I die I don't see what right the government has to say to share it with poor people instead of the people I worked hard to provide a good life for. No Jack I'm not saying eliminate all taxes on rich people, just quit punishing people for working hard to get ahead, which evidently you find offensive.

    17. Jack E Lohman says:

      Well, right-wingers, you aren't happy about people taking your money? Well, neither am I. But our corrupt politicians — from both political parties — are doing it daily as they take campaign contributions from businesses and unions and then pass legislation that favors their contributors to the detriment of the nation. Either get behind public funding of campaigns or keep quiet. If politicians are going to be beholden to their funders, those funders must be the taxpayers.

      We pay their political costs anyway, when they add them to the price of their product and we reimburse them at the cash register, so let's pay them up front and at 1/100th the cost.

      Either live with it, or fix it.

    18. Jack E Lohman says:

      I love it. Great for this group…

      The case for taxing the very rich.

      There's no real economic recovery while so many Americans remain jobless. A new stimulus could bring about full employment, but it would be expensive. One way to fund it would be to increase taxes on the very rich, and cut their tax loopholes.

      See http://tinyurl.com/yeadzsx

    19. Freedom of Speech, T says:

      What is a right-winger Jack?

      Is it someone who believes in the Constitution and the Bill of Rights?

      Is it someone who believes in small government and that they work for us?

      Is it the entrepreneurial spirit, self-reliance, independence?

      Is it someone who believes in FREE SPEECH without threat or intimidation from a oppressive government and IRS?

      Is it someone who believes that military service is still honorable?

      Is it not being ashamed of our country and flag?

      Is it contempt for those who would socially engineer us into what THEY deem we should be and how we should act?

      Is it being ashamed of the word God?

      Is it someone who will freely give to charity and good causes if they have the money to do so?

      Is it someone who believes this is the Greatest Country in the History of the World?

      Is it someone who fights and dies on foriegn battlefields to expand democracy and thus freedom?

      Is it someone who opposes those who would "re-invent" our country by changing the laws of a "living, breathing, constitution"?

      Is it someone who believes they have the right to defend their families by deadly force, if need be?

      THEN, yes Jack. I am your right-winger and proud of it. And, without us "right-wingers", this country would have fallen a long time ago with all the liberties YOU still enjoy.

    20. Jerry from Chicago says:

      Jack, I'm having a hard time figuring out what you are so unhappy with. Initially you made remarks about all the jobs going to India and China. Then you sounded upset with "right-wingers" who didn't want to give their money to kids that didn't earn it,but who wanted to leave their money to their kids, who didn't earn it. Then, you seemed unhappy with the way corrupt politicians get their contributions.

      With regard to jobs going to other countries where "poor" people are willing to work for 20% or less than American workers, the only way I can think of to fight that is to buy nothing made in foreign countries. Unfortunately, Americans have short memories about protecting American workers when they walk into a foreign car dealership (Honda, Toyota, Mitsubishi, Hundai, Subaru, Mercedes, Volkswagon, etc) or Wal Mart, K-Mart, etc. What kind of car do you drive, Jack?

      Jack, do you define a "right-winger as anyone who works for a living and wants to keep what they earn and leave what they've earned to their kids? Do you have a job, Jack? Do you have a family? Do you support your family? How many families of other men do you want to support Jack? Chances are that if you have a job and a family that you support, you probably aren't all that interested in supporting other men's families. That might just make you a "right-winger" Jack.

      With regard to public funding of election campaigns, I suppose that would ok if it could be done fairly. But what happens when you have someone with multi-millions or billions of their own money who is willing to spend it to gain office? Only the rich guy would have a chance. Which kind of begs the question, "why would someone spend tens of millions of their own money to take a job that pays a few hundred thousand a year?" I think the current arrangement is probably best, politicians take money from anuyone who will give it and will promise to give "special consideration" to the things that the donors want, lying to everyone equally.

      As for me, I want to keep the government out of my life and my pocket to the greatest degree possible and I deeply distrust anyone who doesn't feel the same.

    21. Bennet Cecil, Louisv says:

      Rich people can spend their money electing politicians to change the law about estate taxes. They can retire and enjoy their lives. They can work part time, making their estates smaller. The American people have again voted for socialism and redistribution. Politicians have increased the public debt 9% annually since 1970. They have overspent on the military and entitlements. Government is consuming the private sector. High inflation, high taxes, and high unemployment are coming, so prepare. After a decade or more, voters will will explore free market capitalism, smaller government and lower taxes.

    22. J.S. Smith, Monroe, says:

      Seriously, Jack? What in the world does campaign finance reform have to do with the injustice of the Death Tax? Right-wingers zig, you zag? Typical.

    23. Peter Asher says:

      I think Jack just changed the subject.

    24. Da Dog says:

      Careful, Jack, your intellect, or lack thereof is showing. You propose increasing taxes on the rich. Who do you think provides jobs, Jack – the Congress of Fools and President Obimbo? It's the business owners who have taken the risks to become successful who provide the opportunity for others to WORK, Jack. But, I know real work isn't the goal of the followers of liberalism – it's handouts. I don't know who created the following and I gladly give credit to their efforts. Here's the liberal way, Jack.

      THE ANT AND THE GRASSHOPPER

      OLD VERSION: The ant works hard in the withering heat all summer long, building his house and laying up supplies for the winter.

      The grasshopper thinks the ant is a fool and laughs and dances and plays the summer away.

      Come winter, the ant is warm and well fed.

      The grasshopper has no food or shelter, so he dies out in the cold.

      MORAL OF THE STORY: Be responsible for yourself

      MODERN VERSION:

      The ant works hard in the withering heat all summer long, building his house and laying up supplies for the winter.

      The grasshopper thinks the ant is a fool and laughs and dances and plays the summer away.

      Come winter, the shivering grasshopper calls a press conference and demands to know why the ant should be allowed to be warm and well fed while others are cold and starving.

      CBS, NBC , PBS, CNN, and ABC show up to provide pictures of the shivering grasshopper next to a video of the ant in his comfortable home with a table filled with food. America is stunned by the sharp contrast.

      How can this be, that in a country of such wealth, this poor grasshopper is allowed to suffer so?

      Kermit the Frog appears on Oprah with the grasshopper and everybody cries when they sing, 'It's Not Easy Being Green.'

      Acorn stages a demonstration in front of the ant 's house where the news stations film the group singing, 'We shall overcome.' Rev. Jeremiah Wright then has the group kneel down to pray to God for the grasshopper's sake.

      Nancy Pelosi & Harry Reid exclaim in an interview with Larry King that the ant has gotten rich off the back of the grasshopper, and both call for an immediate tax hike on the ant to make him pay his fair share.

      Finally, the EEOC drafts the Economic Equity & Anti-Grasshopper Act retroactive to the beginning of the summer.

      The ant is fined for failing to hire a proportionate number of green bugs and, having nothing left to pay his retroactive taxes, his home is confiscated by the Government Green Czar.

      The story ends as we see the grasshopper finishing up the last bits of the ants food while the government house he is in, which just happens to be the ant's old house, crumbles around him because he doesn't maintain it.

      The ant has disappeared in the snow.

      The grasshopper is found dead in a drug related incident and the house, now abandoned, is taken over by a gang of spiders who terrorize the once peaceful neighborhood.

    25. Jack E Lohman says:

      For those right-wingers unhappy with my views, I am generally a center-right republican. Voted for Bush twice and McCain last year. I spent 40 years in health care, the last 25 as owner and CEO of an independent cardiac monitoring lab with offices in four states, so I think I have a handle on the rewards of hard work and self-sufficiency. But thank you for your concern.

      I sold my company and retired 5 years ago, and yes, I’d like to leave my remaining assets to my kids. But they should pay their fair share of taxes on it. I do not support zero taxes on inheritances that my kids did not work for. They pay gift taxes and these are no different.

      I’m also one who remembers the “compassionate” part of conservatism. I support Work for Welfare and believe that nobody should get a free ride. But I also agree with the quote that “taxes are the price you pay for a democracy.” Without them we have Somalia or the wild west where they resolved issues with guns on the street. That’s not the system I want to live in.

      Importantly, I will not accept corrupt politicians or corrupt CEOs who got to the top on the backs of my kids and your kids. I would not tolerate an employee taking money from outsiders and giving away corporate assets in return. And likewise I do not accept politicians who take from the masses to give to their wealthy contributors. That is not the transfer of wealth I support.

      Jerry, if someone spent millions of their own money on an election, they are likely to lose to the publicly funded candidate. In the three states that have clean elections, 70% of their legislatures ran against moneyed candidates and won on the publicly funded system (AZ, MA, CT).

      To be against high taxes yet for the current moneyed political system that fuels them seems a bit contradictory, but what the hell, it takes all types.

      Bennet, politicians have increased the public debt because they were “paid” to increase the public debt!!! Don’t you get it? You and I want politicians to spend our money wisely, but the big campaign contributors want exactly the opposite. Who do you think is going to win?

      And J.S. and Peter, campaign finance reform matters if you want to decrease the taxes needed by the politicians to satisfy their funders. The inheritance tax is just another pot. And no, when I die my kids do not pay a death tax, they pay an inheritance tax. But only on that over the first $3-4 million.

      My blog is at http://moneyedpoliticians.net … with a complete disclosure in “About”

    26. Jack E Lohman says:

      Da Dog, I recognize the value of small businessmen, having been one myself. And I did not support either of the Bush or Obama giveaways to the bankers and GE. I preferred a bailout of 100% of our businesses, which a Medicare-for-all system would have given us (to the tune of a 15% cut in the nation's wages). But some of that would have come back to us in taxes. Importantly, the Big Three make more cars in Canada than the US because healthcare costs $800 per employee per year there versus $6500 per year here.

      But guys, the insurance industry gave big cash dollars to retain the current system and create the "deform" that's coming. $46 million in campaign contributions and 1.5 times that amount from hospitals, physicians and pharma.

      How are you liking our privatized political system so far?

    27. Freedom of Speech, T says:

      Dear Jack,

      The inheritance tax is a "symbol" of the giant tax fraud that is forced on the American people. There are many other ourageous taxes, fees, surcharges, and penalties. There has to be a limit on the "power of the purse". Current events should show why.

      You state, "But they should pay their fair share of taxes on it. I do not support zero taxes on inheritances that my kids did not work for." Fine, don't.

      This country was founded on a revolt against oppressive taxation without representation.

      George Washington warned us about the danger of political parties. Founding Fathers were extremely concerned about corrupt big government ruling the people instead of vice versa. How prophetic is that? Obama was quoted as saying the "so-called founding fathers". What does THAT mean?

      So, what do we do? Instead of using taxation in a limited role, it has exploded into a 40,000+ page series of documents no one entirely understands. On top of that, what kind of representation do we get? The PORK and WASTE is too numerous to mention. Entire regions of the US are shut down by environmentalists protecting "endangered species" (see no water in the Valley in California), when Earth has lost 70% of its species numerous times in history from catacylmic events. Wonder how those farmers are doing in the Valley? That's compassion for you.

      I say NO to any new taxation! In fact, they need to repeal thousands of pages of the tax code and live within a budget like the rest of us. Americans should DEMAND this.

      If YOU want your kids to pay taxes on money that YOU earned, then send a check to the IRS.

      Leave the rest of us alone.

    28. Tim Az says:

      I will present you with the elitists point of veiw. Over the years we gave you the post office, Social security, Medicair, welfare, ect. And all we got in return was relected while you complained about our inept entitlements. So now we present you with what we like to call health care. In this bill if you manage to escape an abortion. You will be forced on penalty of imprisonment to buy our health insurance along with all other taxs we may levy upon you throughout your existance. Once you are no longer an asset to us we will deny health care until death occurs. At which time we will claim no less than 55% of any remaining assets. You like to call it a death tax. We like to call it atonement.

      How's that hope and change working out for you?

    29. Michael, Las Vegas says:

      For a real life story about the estate tax, watch this video:

      http://www.youtube.com/watch?v=Urvkfi134Ew

    30. Jason Delaware says:

      Da Dog,

      That was a brilliant account of what's going on today. I thank God for others who don't waolk around with their hands over their eyes and buy into all of the lies and deciet that we are being fed.

    31. Jack E Lohman says:

      Freedom, inheritances are the same as gift taxes, except one occurs before death and the other after. And yea, we revolted against oppressive taxation without representation, but today the special interests pay off the politicians to spend excessively, we pay taxes in return, and we, uh, suck it up.

      It is not big government that is pushing spending, it is big business, and they pay off our politicians to go along with it. They buy PORK and WASTE and we let the payola continue. We deserve every bit of taxation we get. Either get behind making our political system more honest by getting rid of the payola, or quit complaining. You are getting what you deserve.

    32. Ralph Petrillo, Mama says:

      It is interesting that Bill Gates and Warren Buffet , two men that are worth approximately $ 100 billion dollars combined and plan to put their wealth into a charitable foundation without paying one dollar in estate taxes, both support the estate tax. Clearly a new estate tax is needed so that the wealthy even if they have charitable purposes in mind, still contribute 15% of their wealth to the federal government and 5% to the state government upon their death so that there is a chance of balancing the federal budget deficit. Actually they support the estate tax for individuals and families that do not open a charitable foundation. So once again to tax the wealthiest 1000 families and or individuals in the United States and to move towards balancing our budget, place a non exempt charge of 20% on all estates in this country, with no exemptions for foundations and charities. It would be interesting to see what Sam Walton founder of WalMart actually paid in estate taxes, or did it simply go into a foundation for his children to inherit. At the time of his death the estate tax was 55%. Maybe President Bill Clinton signed an executive order helping with the estate tax nearing his death.

      The United States has a large deficit problem, and to correct this problem do not let the wealthy escape their tax obligations by simply opening up foundations where they must give 5% of their assets away a year meanwhile they are investing their assets to earn more then 5%, thereby keeping their wealth and political power. The time for change is now!

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