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HR 1259, the Death Tax Repeal Permanency Act of 2011
April 4, 2011
The Honorable Kevin Brady
Dear Representative Brady:
On behalf of the 362,000 members of the National Taxpayers Union (NTU), I write in strong support of your bill, H.R. 1259, the “Death Tax Repeal Permanency Act of 2011.” Your legislation would amend the Internal Revenue Code to finally ensure the completion of one of NTU’s core goals: permanent and full repeal of the estate and inheritance tax.
Elimination of the death tax is a long overdue reform. The dubious revenue claims made by its supporters are far outweighed by the negative economic and moral implications of the tax. Most economists agree that the death tax is an inefficient means of raising revenue for the federal government. In fact, due to collection, compliance, and avoidance costs, coupled with its adverse impact on economic growth, repealing the death tax is likely to increase net revenue for the federal government.
While the tax may have little or no net effect on our deficit, it 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 CBO Director Douglas Holtz-Eakin found that full repeal would lead to the creation of 1.5 million jobs, expand investment by 3 percent, and increase small business capital by more than $1.6 trillion. By enacting permanent elimination of the death tax, your bill would provide a much-needed element of long-term relief for our economy and small businesses who continue to suffer in the aftermath of the recession.
The economic case against the death tax is persuasive enough, but the moral case is even more powerful. The tax threatens small businesses and farms that are passed down from generation-to-generation, many of which do not have the liquid assets to pay the pricetag the federal government has placed on death. The inevitable result is an inability to reinvest in the businesses’ 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 will be necessary to ensure America’s return to prosperity.
H.R. 1259 is a chance to turn back the death tax, which has loomed ominously over entrepreneurs and small businesses since its inception more than 90 years ago. In order to put an end to this unwise policy, NTU pledges to work closely with you to pass the “Death Tax Repeal Permanency Act of 2011.”