Opinion: Death should not be a taxable event

By James Carter

In 1789 Benjamin Franklin announced: “Nothing is certain in this world, except death and taxes.” It was not until 1797 that US politicians combined death and taxes in their wisdom, which imposed a temporary estate tax of the states on the American population in order to increase military expenditure. The estate tax is now the only living survivor of the First World War, which “temporarily” accepted three times more – the last time in 1916 at the end of the First World War.

More than a century later I joined 849 economists from universities, think tanks and companies to send the Americans: “Death should not be a taxable event. The estate tax should be canceled.”

Milton Friedman, the Nobel Prize winner, published an open letter to the lifting of the estate tax twenty -four years ago. Milton joined more than 275 economists by adding their names to his letter. Since then, hundreds of other economists have signed in his letter and brought the cumulative number of signatories to 850.

Our open letter, which was signed by some of the most prominent economic theorists and practitioners of the country – including five Nobel laureates (Milton Friedman, 1976; Vernon Smith, 2002; Edward Prescott, 2004; Oliver Williamson, 2009; Eugene Fama, 2013). The tax is a second or third taxation layer for the same assets. “

Family businesses that have paid taxes throughout the life of its owners are often “country or inventory” on paper, but “bararm” and is that they are endangered by the estate tax. Only a few, if at all, family farmers and manufacturers have cash available to pay taxes of 40 percent that raised at the worst time and at the same time mourn the loss of a loved one. A family company that cannot easily collect cash for paying the estate tax may be forced to take employees, sell parts of the business or close their doors forever.

The depressed effects of estate tax on the America's family businesses have a strong impact on the US economy. A joint study by the Joint Economic Committee from 2012 showed that the estate tax has reduced more than 1 trillion US dollar since its foundation in 1916. Less economic capital means that corporate acquisition, the creation of innovations and fewer jobs forego.

In response to a question to increase the estate tax, Friedman argued: “Where do you get the factories from? Where do you get the machines from? Where do you get the capital investment from? Where do you get the incentive to improve the technology?”

While the effects of the estate tax on the economy are known, they would be surprised at how few income the tax achieves. Property and gift taxes are expected to achieve 0.57 percent of the federal revenues this year. This is not enough to finance the federal government for a whole day!

A study that was published by Steve Moore, a long-time external economic advisor by President Trump at the beginning of this year, comes to the conclusion that every US dollar, which was losing five dollars from other taxes by the subsequent tax results, has been lost due to the security damage for family business. The economic literature clearly shows that the estate tax dollar for dollars, which is the most inefficient and economically destructive tax in the books.

In addition, the tax foundation found this year that the conformity costs associated with the estate tax are just as stressful as the tax itself and a bonanza for estate planning lawyers and managers for life insurance on the back of family businesses who have difficulty passing on their legacies to the next generation.

President Trump, Vice President JD Vance and important congress leaders have asked to eliminate the estate tax. Therefore, the congress should include the cancellation of these unfair and economically destructive tax in the Reconciliation Act, which is to be considered this summer.

The message is clear: the removal of the estate tax will lead to faster economic growth and probably probably Boost Bundeships. The estate tax is bad and pulling the plug is 100 years overdue.

James Carter is headmaster at Navigators Global. He wrote this for insissources.com.