ASA Supports Sen. Thune (R-SD)’s Death Tax Repeal Act
ASA supports the reintroduction of Sen. Thune (R-SD)’s the Death Tax Repeal Act of 2023, which would permanently repeal the federal estate tax. In 2022, the Tax Foundation found that the U.S. could create over 150,000 jobs by repealing the estate tax. A 2012 study by the House Joint Economic Committee found that the death tax has destroyed over $1.1 trillion of capital in the U.S. economy. Lawrence Summers, former Secretary of the Treasury under President Clinton, Alicia Munell, member of President Clinton's Council of Economic Advisors, Joseph Stiglitz, a Nobel laureate for economics, and Douglas Holtz-Eakin, former CBO Director have all published work on the death tax's stifling effect on job growth and the economy.
The death tax contributes a very small portion of federal revenues. The estate tax currently accounts for approximately one half of one percent of federal revenue. There is a good argument that not collecting the estate tax would create more economic growth and lead to an increase in federal revenue from other taxes. A 2016 Tax Foundation analysis found repeal of the death tax would increase federal income taxes by $145 billion over 10 years using a more realistic, “dynamic” economic analysis.
In addition, the death tax forces family businesses to waste money on expensive insurance policies and estate planning. These burdensome compliance costs make it even harder for business owners to expand their businesses and create more jobs.
The negative effects of the estate tax make permanent repeal the only solution for family businesses and farms. This legislation will help America’s family businesses create jobs, expand operations, and grow the economy.