The Heritage Foundation estimates that eliminating the federal estate tax (and related gift taxes) would boost U.S. economic growth by more than $46 billion over the next 10 years and generate an average of 18,000 private-sector jobs annually. Eliminating the federal death tax would create economic opportunities for American families and free up financial assets for private-sector investment and income growth.
One of the worst features of the death tax is the effect it has on U.S. family-owned businesses. Many estates subject to the death tax are small or family businesses that are asset rich but cash poor; that is, their wealth is not sitting in liquid assets, such as stocks and bonds, but consists of physical assets, such as buildings, land, and machinery.
The HF estimated that a repeal of “the federal estate tax (and related gift taxes) would boost US economic growth by more than USD46bn over the next 10 years and generate an average of 18,000 private-sector jobs annually.”
It was therefore concluded that “it is time to eliminate the death tax. Not only would the economy reap significant gains, but the resulting loss in federal tax revenues would be significantly lower than supporters of the death tax fear it would be. A macroeconomic simulation of estate-tax repeal estimates that the resulting job growth and increased economic activity would generate offsetting revenue, and that the total remaining reduction in tax receipts would amount to only 0.5 percent of federal revenue.”
