Thursday, July 28, 2005
Center on Budget and Policy Priorities, New Kyl Proposal Still Calls for Applying Capital Gains Rate to Estate Tax, So Revenue Loss Would Be Substantial (7/27): Criticizes estate tax compromise proposed by Senator Jon Kyle (R-AZ):
- $3.5 exemption ($7 million per couple), indexed for inflation after 2010
- 15% tax rate (tied to capital gains rate)
New York Times, Bills on Energy and Transportation Move Toward Passage (7/28)
Senator Bill Frist, the majority leader, announced he would not try to force a vote in the next few days on a repeal of the estate tax, leaving that issue until Congress returned in September.
Wall Street Journal, Fuzzy Tax Math (7/28):
Senate Majority Leader Bill Frist disappointed Republicans and grassroots activists again yesterday with his decision not to hold a vote this week to eliminate the death tax. He's rescheduled a vote for September, but supporters are beginning to wonder if the world's greatest deliberative body will ever get around to passing one of the GOP's most popular priorities.
The explanation for this nonsense is that Congress has subordinated much of its tax-writing function to the unelected number crunchers at the Joint Committee on Taxation (JCT).
The Joint Tax calculations of the "cost" of death tax repeal have been particularly wild and inexplicable....This year the JCT is peddling another indefensible death-tax cost estimate: $300 billion in lost tax collections. This guess also turns a blind eye to any dynamic impact of faster economic growth, more savings, more job creation, and more capital investment that can be anticipated once the tax is gone.
In addition to being bad math and bad economics, all of this works to distort tax policy....Death should not be a taxable event, as most other serious countries seem to understand. A study released last week by the American Council on Capital Formation finds that of 60 major nations around the world, only two have higher death tax rates than the U.S. and 24 have no inheritance tax at all. America is about the most expensive place to die on the planet.