Support Full Repeal of the Estate Tax

WHY IS THE ESTATE TAX BAD FOR OUR INDUSTRY?

The death tax imposes burdensome compliance costs and forces many NAED businesses to divert productive capital into large life insurance policies and expensive estate planning.

The National Association of Manufacturers found that one-third of small business owners will have to sell or liquidate part of their companies to pay estate taxes.

Repealing the death tax would spur job creation. According to a study by Douglas Holtz-Eakin, former director of the Congressional Budget Office, repealing the death tax would add 1.5 million additional small business jobs.

MORE DETAIL:  

The estate tax is levied on the assets of an estate before it is passed on to heirs. Current law exempts the first $5.45 million (The $5 million exemption was indexed to inflation as a part of the “fiscal cliff” deal in the closing days of 2012) of the remaining estate after deducting debts and certain other expenses. For couples, the exemption applies separately to the estate of each spouse. The remaining assets are taxed on a schedule with a top marginal rate of 40%.

While the estate tax may be devastating to family businesses, it is a drop in the bucket of the federal budget – typically amounting to around 1% of annual federal revenues. If policy makers need revenue, there are better places to look.

The death tax contributes such a small portion of federal revenues that there is a good argument that not collecting the death tax would lead to higher economic growth and thereby increase federal revenue from other taxes. Former undersecretary of the Treasury Steve Entin found, by using a “dynamic” economic analysis, that repealing the death tax would increase tax revenues by nearly $89 billion over 10 years.

 

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Ask Congress to Permanently Repeal the Federal Estate Tax.