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1 David Block & Scott Drenkard, The Estate Tax: Even Worse than Republicans Say 1 (2012)

handle is hein.taxfoundation/ffdcgxz0001 and id is 1 raw text is: TAX FUDAT UN ° August 29, 2012 No. 326 The Estate Tax: Even Worse Than Republicans Say By David Block & Scott Drenkard Introduction On July 25, Joint Economic Committee Republicans published a report criticizing the federal estate tax.1 Their report called for either a significant reform or outright repeal of the estate tax. The report, which referenced four separate Tax Foundation studies and testimonies,2 reached similar conclusions to those which we have reached with regard to the estate tax. But while the JEC Republican report makes strong arguments, we hope here to strengthen the case for repeal with additional evidence of compliance burdens inherent in the estate tax. Compliance costs are much more significant than is often understood, so much so that tax revenue is likely to actually increase upon repeal regardless of economic growth patterns in the coming years. All of this analysis comes on the heels of major changes that are slated for the estate tax rate and exemption structure in 2013. It is important that legislators and taxpayers educate themselves with the economic literature on growth and compliance. Estate Tax Update The estate tax is a tax on an individual's ability to transfer property after his or her death. There have been numerous temporary estate taxes throughout America history, but the first permanent estate tax was established in 1916. The current federal estate tax has three major parts: the traditional estate tax, the gift tax (a tax on transfer of wealth during life), and a generation-skipping transfer tax (a tax on transfers to generations at least twice removed). 1 Kevin Brady, Joint Economic Committee Republicans, Cost and Consequences of the Federal Estate Tax: An Update (July 25, 2012), http:/Axvv T.jecsenate.govirepublicansipublici?a=Filcs.Serve&Fike id bc94*24ci -8897-4dbd-b14 c-al 7c9c5380a3. 2 Robert Carroll, Income Mobility and the Persistence of Millionaires, 1999 to 2007, TAX FOUNDATION SPECIAL REPORT NO. 180 (June 2010), http:iitaxfoundationorgisitesitaxfoundationorgifilsidocsisr 180 .pdf; David S. Logan, The Economic Effects of the Estate Tax, Testimony before the Pennsylvania House Finance Committee, Oct. 17, 2011, http:iiwwwtaxfoundationorg/research/show!i2 7709:html; William Ahern, The Federal Estate Tax: Will It Rise From the Crave in 2011 or Sooner?, TAX FOUNDATION SPECIAL REPORT NO. 179 (May 2010), h ttp:i// taxft u n da tio n.org/s it e s/ taxft u n dation. o r g/fi Ie s/d([o cs /s r 1 79 p df; J. Scott Moody, Wendy P. Warcholik, & Scott A. Hodge, The Rising Cost of Complying with the Federal Income Tax, TA FOUNDATION SPECIAL REPORT No. 138 (Dec. 2005), http://taxfoundation.org/sites/taxfoundation.org/files/docs/sr1.38 pdf.

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