Want an Economic Boost? Let’s Kill the Death Tax

Death and taxes are two of life’s certainties, but the tax on death itself should certainly be eliminated. A recent analysis by The Heritage Foundation’s Center for Data Analysis found that doing away with the federal death tax would provide a much-needed, long-lasting boost to the nation’s economy. Indeed, it would increase economic growth by $46 billion over the next 10 years and add an average of 18,000 jobs per year throughout that period.

The federal death tax (officially known as the “estate tax”) confiscates 40 percent of the income and assets, above a specified exemption, that individuals leave behind after their death. The exemption currently stands at $5.34 million. Because of this high exemption level, the death tax hits only a small fraction of Americans directly — a fact that makes the levy popular among those who believe it is good tax policy to “soak the rich.” Yet for years pollsters have found widespread popular support for eliminating death taxes.

Perhaps Americans despise the death tax because taxing someone for dying just seems wrong. Or perhaps they recognize that income and assets seized by the death tax have already been taxed once — if not twice — by the feds. Or maybe antipathy toward the tax abounds because the American Dream instills the hope that we, too, may someday accumulate significant wealth to pass on to our children.

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