Opponents of estate tax may have received new ammunition with the publication of a study which says the provision’s repeal will contribute to economic growth and enhance government revenue.
The work is detailed in the report published jointly by the Family Research Council (FRC) and the American Family Business Foundation and suggests eliminating the tax could create more than 1.5 million jobs.
"[Estate tax] kills jobs, family prosperity and necessary federal revenues," says FRC president Tony Perkins.
"It is regressive, punitive taxation at its worst, and shows how Washington’s impulse to redistribute wealth only produces less growth and greater economic inequity," he adds.
The study stresses the tax affects mainly small businesses, which it calls America’s "main economic engine," responsible for creating 60 to 80 percent of new jobs in the last decade. It estimates that raising the rate to 55 percent with only a $1 million exemption would eliminate 500,000 jobs.
The estate tax is imposed on the transfer of the taxable estate of a deceased person, and according to the Economic Growth and Tax Relief Reconciliation Act of 2001, the applicable exemption increases to $3.5 million in 2009, the tax will be repealed in 2010, but in 2011 it is scheduled to return with the exemption of only $1 million.