| The Honorable John Thune United States Senate 511 Dirksen Senate Office Building Washington, DC 20510 | The Honorable Kevin Brady United States House of Representatives 301 Cannon House Office Building Washington, DC 20515 |
Dear Senator Thune and Congressman Brady:
On behalf of the 362,000-member National Taxpayers Union (NTU), I write in support of the “Death Tax Repeal Act,” S. 1183 and H.R. 2429 in the Senate and House, respectively. Backed by growing numbers of legislators, these bills would repeal the federal estate and generation-skipping transfer taxes, as well permanently cap the gift tax rate at 35 percent and establish a $5 million lifetime gift tax exemption.
An end to the federal estate, or death tax, is long overdue. The tax was originally intended to be a temporary source of defense funds during World War I. Ninety years later, supporters’ claims that the revenue is needed for government functions and to prevent unfair wealth concentration are outdated and far outweighed by the economic damage the tax causes. Many economists agree that it is an inefficient means of raising revenue. In fact, due to savings on collection costs, higher economic growth, increased investment, and higher employment, repeal of the death tax is likely to bolster net federal receipts.
Although it brings in less than one-half of one percent of total federal tax revenue, this levy certainly leaves an indelible mark on our economy. As a tax on capital and entrepreneurship it slows business activity, destroys jobs, and suppresses wages. A recent study by former Congressional Budget Office Director Douglas Holtz-Eakin found that full repeal would create 1.5 million jobs, expand investment by 3 percent, and increase small business capital by more than $1.6 trillion.
The death tax threatens small businesses and farms that are passed down through generations, many of which do not have liquid assets to pay the substantial price tag the federal government has placed on inheritance. The results include the inability to reinvest in the business’s future success, laid-off employees, and buy-outs by larger entities. By punishing thrift, savings, and hard work, the death tax stifles the very attributes that are necessary to ensure America’s future prosperity.
The Death Tax Repeal Act would create immediate and tangible relief for many taxpayers, especially farmers and small business owners. NTU is pleased to endorse S. 1183 and H.R. 2429; we urge all Senators and House Members to join you in co-sponsoring this legislation and working toward its immediate enactment.
Sincerely,
Nan Swift
Federal Affairs Manager