The Death Tax should be repealed this year as a part of much-needed, pro-growth tax reform. At its core, this tax is extremely unfair, forcing families to pay a tax on their loved one’s family-owned businesses or farms.
At a steep 40 percent rate, those hit by the Death Tax must give up a portion of their loved one’s legacy because of the tax. The truly wealthy can avoid the tax through an army of accountants, attorneys, and charitable planners, but those who are hit hardest generally are first and second generation small business owners and cannot afford the same tax avoidances the wealthy, like Hilary Clinton, use. Americans for Tax Reform along with 131 other organizations wrote a letter to Congress urging immediate and permanent repeal of the Death Tax.
Repeal of the Death Tax is not only common-sense, but it would also spur economic growth. In 2016, the Tax Foundation estimated that repeal of the Death Tax would create 150,000 jobs. Additionally, the Joint Economic Committee reported that the Death Tax has suppressed over $1.1 trillion of capital in the United States’ economy since being introduced. Much of this comes from small businesses, who are the core of America’s economy. This loss of capital ultimately results in fewer jobs and lower wages for American workers.
In addition, the Death Tax contributes a miniscule amount of revenue relative to the size of federal government. In all, it makes up only one half of one percent of all federal revenue. Because the Death Tax is so economically destructive, almost all the revenue lost would be offset by increased economic growth. As noted by the Tax Foundation, repealing the Death Tax would result in $240 billion in lower taxes over a decade. However, the economic growth created by repealing the Death Tax would produce $221 billion in federal revenue because of increased wages and more jobs.
The majority of Americans oppose the Death Tax and support its repeal. Countless polls have proven that a majority of Americans would support full and permanent repeal of the Death Tax.
Senator John Thune (R-S.D.) and Representative Krisiti Noem (R-S.D.). have introduced legislation, S. 205/ H.R. 631, The Death Tax Repeal Act of 2017, to permanently repeal the Death Tax. ATR urges all members of Congress to support and co-sponsor these bills. Likewise, executive and congressional leaders have been at the forefront of this debate. Both the House GOP tax blueprint and the plans released by President Trump have both called for the repeal of the Death Tax.
As the President and Congress are moving forward with pro-growth tax reform, the repeal of the Death Tax should be a vital part of reform.