Democrats love death taxes. They think it is a chance for them to take money from other people – provided, of course, that it isn’t their money.
But now, the death tax is under fire.
Among developed nations, the U.S. has one of the highest estate / inheritance tax rates in the world.
Thankfully, it isn’t the highest rate. Checking out the 34 OECD countries (Organization for Economic Cooperation and Development), Japan is 55 percent, South Korea, 50 percent, France, 45 percent the UK 45 percent and the U.S. 40 percent.
According to a new report from the Tax Foundation, eliminating the death tax in the U.S. would boost federal revenue by $8 billion a year.
Seems like a good thing to do!
Currently, estate tax is levied on the net value of property owned by a deceased person. Inheritance taxes are levied on the recipients of the property, and that is why it is known as “death tax.”
Fifteen OECD countries do not have estate tax, including Mexico and Canada.
The Tax Foundation report noted, “Estate and inheritance taxes are poor economic policy. They fall almost exclusively on the domestic capital stock, the accumulated wealth that makes America richer and more productive as a whole. Taxes levied on the capital stock restrict job growth and harm the economy.”
Ironically, the “death tax” will only raise $20 billion in 2015. The reason is that the exemption level is quite high.
Here are the exemption levels:
The Tax Foundation says repealing the “death tax” would increase investment, add jobs, and expand the economy. And according to calculations from the foundation, elimination of the tax would result in around 140,000 additional jobs. That’s a 0.08 percent additional annual GDP growth in the decade after elimination, and additional federal revenue of $8 billion a year due to the increased economic growth.