Joulfaian: The Estate Tax and the Demise of the Family Business

David Joulfaian (Office of Tax Analysis, Treasury Department) has posted The Estate Tax and the Demise of the Family Business: A Comment on SSRN.  Here is the abstract:

A recent paper by Brunetti (2006) examines whether the US estate tax forces heirs with insufficient liquid assets to sell inherited businesses in order to pay the estate tax. It concludes that the estate tax has a positive effect on such sales. This note highlights features of the estate tax and succession planning by entrepreneurs that have been overlooked which could explain the observed pattern of business sales. These omissions, along with measurement errors, cast doubt on the reported findings.