Death tax rates, which range from 41% to 47%, are substantially higher than other tax rates - the lowest estate tax rate is almost as high as the highest income tax rate of 39.6%. Moreover, the estate tax is imposed on earnings and assets that have already been subject to income, social security, and other taxes at the federal and state level.
The death tax costs jobs. Potential employment is lost when business owners decide not to expand or open another store because of the ever looming death tax, and current employment is destroyed when businesses are liquidated to pay estate taxes. If estate taxes and gift taxes are eliminated in 1999, 275,000 jobs would be created between 1999 and 2010. (IPI Policy Report #150)
“...My luck has always followed the "day late and dollar short" saying so I do not look for any miracles to save me. I just hope the death tax is abolished so it will help others enjoy the fruit of their labors...”
~ MJ, Live Oak, Florida”
With Americans living longer, we need to encourage individuals/families to save and invest in order to plan for their future. However, the estate tax creates a disincentive to save, and instead, encourages consumption. The more assets one has at death, the more he/she may have to pay to the federal government (death taxes).
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The estate tax amounts to less than 2% of total federal revenues while costing the government and taxpayers approximately the same amount collected for enforcement and compliance. (Joint Economic Committee Report, 1998)