June 14, 2002


KILLING THE DEATH TAX: Here's the best case I've seen for eliminating the estate tax. Not only is it a net revenue loser (reason enough to kill it), but it hurts the moderately wealthy far worse than the superrich, who because of superior estate-planning actually pay less in estate taxes. The moderately wealthy often don't expect to have as much money as they do before it's too late to shelter their savings as efficiently-- which really means introducing the correct inefficiencies into financial planning to ward off the taxman, which of course translates into inefficiency in the macro-economy: capital diverted into tax compliance costs, less growth, fewer jobs, and in the end less tax revenue. Legislators protest against estate tax cuts (most recently killing a bill to make the phase-out in 2010 permanent) because they can't "afford" it, but the estate tax costs more than it raises.

Posted by John Tabin at June 14, 2002 08:53 PM