NEW REPORT SAYS DEATH TAX WILL STUNT JOB GROWTH IN NH;
AT SAME TIME, LEGISLATIVE LEADERS WEIGH NEW TAX SCHEMES
Washington, D.C. – On the heals of the New Hampshire House having passed an 8% estate, or “death tax” this past session, Cornerstone Policy Research, Family Research Council, and the American Family Business Foundation released a new report today analyzing the effects of the estate tax on jobs, government revenues, and economic growth.
The report, “Repealing Death Tax Will Create Jobs and Boost Economy,” combines two recent analyses of the death tax by Douglas Holtz-Eakin, former Congressional Budget Office director, and Stephen J. Entin, president and executive director of the Institute for Research on the Economics of Taxation (IRET).
Considering that Congress will have to act on the estate tax this fall, given its scheduled elimination in 2010 and reversion to the high tax rate and low exemption of 2001 in 2011, this report detailing the economic effects of the estate tax is critical. Among its findings:
According to Holtz-Eakin, such a reversion would eliminate 2,631 jobs in New Hampshire. By contrast, eliminating the estate tax would create 7,893 in the Granite State.
Eliminating the Death Tax could create over 1.5 million jobs for small and family business workers.
An increase in the Death Tax rates to 55% with only a $1 million exemption would eliminate 500,000 jobs.
The distortion the Death Tax causes with respect to other tax collection methods results in a net revenue decrease for the federal government. Government could bring in nearly twice the revenue with no death tax at all.
Ending the Death Tax would add $119 billion to GDP. Allowing the rates to revert to 2001 law, 55% with only a $1 million exemption, would reduce GDP by $183 billion.
This report is released just as the New Hampshire House voted to include an 8 percent death tax in their version of the 2010-11 state budget last spring. Additionally, the state is now considering a “flat rate income tax” in the way of HB642 which is currently before the House Ways and Means Committee, with hearings scheduled for this week.
Commenting on the report Cornerstone Executive Director, Kevin Smith, said, “This new report demonstrates that not only do higher taxes impede the growth of the economy, but they also strangle many of New Hampshire’s entrepreneurial families who employ our citizens. We call on the legislature again to abandon its appetite for new tax schemes and to start budgeting like NH families do - by not spending beyond its means.”