AFP Letter of Support for Brady-Thune Death Tax Repeal Legislation
Dear Representative Brady and Senator Thune:
On behalf of more than two million Americans for Prosperity activists in all 50 states, I applaud you for reintroducing your bill to repeal the death tax. Your legislation would eliminate the death and generation-skipping taxes, while keeping the gift tax at a reduced top rate of 35 percent and a higher lifetime exemption of $5 million. This would be good for overall economic growth.
The death tax burdens Americans all along the economic ladder, not just those with higher incomes. Small business owners and famers are particularly impacted. Too often, companies have to have to close their doors instead of passing ownership to the next generation because they face a steep death tax bill.
Death and gift taxes have never been an important source of federal revenue. Only 0.42 percent of federal revenue came from the death tax in 2012. Repealing the death tax would actually result in higher revenue, since it slows overall economic growth and has high compliance costs. In a study for the American Family Business Foundation, former Treasury Department economist Stephen J. Entin found that repealing death taxes would produce $89 billion in new revenue for the federal government.
Furthermore, these taxes stifle overall economic growth by discouraging saving and investing. The Joint Economic Committee estimates that total capital stock in the U.S. would be 3.8 percent higher today if there were no death tax, equaling nearly a trillion dollars in additional capital. If it weren’t for these taxes, businesses would be able to invest these trillion dollars in new facilities and equipment and to hire and train more employees.
The U.S. tax code should encourage Americans to work hard, save, and invest—not punish them by confiscating a third of their assets when they die. Americans for Prosperity is proud to support your legislation repealing the death tax. I urge your colleagues to support its passage, and I look forward to working with you in the future.
Director of Policy
Americans for Prosperity