By Family Business Coalition, Special for USDR
Today, the late Milton Friedman’s open letter calling for full repeal of the federal estate tax was reissued with the signatures of 727 economists from some of the world’s top institutions, including four Nobel Laureates (Milton Friedman, 1976; Edward Prescott, 2004; Vernon Smith, 2002; Oliver Williamson, 2009). Friedman’s open letter, first published 16 years ago, makes a common-sense case for eliminating the federal estate tax (more commonly referred to as the death tax because it is levied upon the death of a taxpayer). Milton Friedman, famous for his 1976 Nobel Prize in economics, advocated for repeal of the death tax to reduce compliance costs on small businesses and spur job creation.
Milton Friedman’s letter points out the inefficiency and ineffectiveness of the estate tax: “The tax raises little direct revenue – partly because the estate planners have been so successful in devising ways to escape the tax. Costs of collection and compliance are high, perhaps of the same order as direct tax receipts…These indirect effects mean that eliminating the tax is likely to increase rather than decrease the net revenue yield to the federal government.”The letter goes on to conclude: “Death should not be a taxable event. The estate tax should be repealed.”
This support by over 700 economists comes as Congress shifts its attention to overhauling the tax code. President Trump, Vice President Pence, and key Congressional leaders have all called for eliminating the death tax in comprehensive tax reform. Death tax repeal enjoys near unanimous support among Republicans in the House of Representatives which passed the Death Tax Repeal Act of 2015 in a bipartisan vote 240-179, including seven Democrats. Congresswoman Kristi Noem (R-SD) and Senator John Thune (R-SD) have introduced the Death Tax Repeal Act of 2017 – their bills already have 99 and 36 cosponsors respectively. Democratic supporters of estate tax repeal include Reps. Bishop (GA), Costa (CA) Cuellar (TX), Peterson (MN), Ruppersberger (MD), Sinema (AZ), and Senator Manchin (WV).
The public overwhelmingly favors death tax repeal. Polls consistently show that 60-70 percent of voters support repeal of the estate tax.
The non-partisan Tax Foundation found repealing the estate tax would create 159,000 jobs over the next decade and raise the income of a family of four making $80,000 by $640 and an individual making $35,000 by $280. According to IRS data, the estate tax raised less than 1 percent of federal revenue in 2016.
The Family Business Coalition (FBC), a group of 150 business associations supporting death tax repeal, commissioned the letter’s release. The coalition is locking arms with small businesses, economists, and advocacy organizations in urging Congress to keep their promise to repeal the death tax this fall.
The full letter can be viewed at www.FriedmanLetter.org.
FBC is a diverse collection of organizations and industry groups united for the common purpose of protecting America’s family businesses across the country.
SOURCE Family Business Coalition