Estate Tax Repeal Plan: $800 Billion in New Debt to Cut Taxes on Ultra-Wealthy

“The estate tax can’t have much effect on hiring by small businesses because hardly any owners ever face the estate tax …only 100 small businesses and family farms will pay any tax in 2009” —Tax Policy Center

MADISON, Wis. — A discredited report being circulated by Scott Jensen’s MacIver Institute is calling for $800 billion in new deficit spending to end the estate tax for anyone with an estate in excess of $3.5 million.

Jacking the deficit by $800 billion to cut more taxes for America’s richest dead people is insanity,” said Scot Ross, One Wisconsin Now Executive Director. “George W. Bush’s failed policies included cutting the estate tax for millionaires and our economy collapsed. You should only be able to bankrupt America once before your ideas are ignored forever.”

MacIver sent out a release today touting a report paid for by the American Family Business Institute, a pro-estate tax repeal front group financed by the heads of corporations with $43 billion in assets. The report was authored over a month ago by John McCain’s presidential campaign economic advisor, Douglas Holtz-Eakin.

An analysis by the non-partisan Urban Institute-Brookings Institution Tax Policy Center said the AFBI report uses “back-of-the-envelope” math and “gets the economics all wrong.” They add: “The estate tax can’t have much effect on hiring by small businesses because hardly any owners ever face the estate tax. Most small businesses are worth far less than the exemption level (currently set at $7 million per couple, and higher for many small business owners who value their firms at below market price). We estimate that only 100 small businesses and family farms will pay any tax in 2009.”

According to the non-partisan Center on Budget and Policy Priorities, which did an extensive analysis of the report, American Family Business Institute’s report “ignores the increased deficits that would result from repealing the estate tax, which would likely weaken growth over the long term” and it “overstates the evidence that repeal would boost private saving.”

The CBBP and Tax Policy Center reports are available here: http://www.cbpp.org/cms/?fa=view&id=2861

Wisconsin’s tax for estates in excess of $675,000 expired in January 2008 at a cost of $100 million annually. One Wisconsin Now previously delivered 2,000 petitions to state legislators calling for reinstatement of the tax, which would only be paid by the children of the state’s wealthiest fortunes.

“The only people who would benefit from repealing the estate tax would be the kids of America’s richest fortunes,” said Ross. “We have years to go before we fix the mess the George W. Bush left us and thankfully the failed policies the MacIver brain trust is touting have no chance of becoming law anytime in the near future.”

Ross noted Holtz-Eakin was not the McCain economic advisor who called Americans concerned about job loss “a nation of whiners.” That was former Sen. Phil Gramm.