Super Committee Staff Director Guided Estate Tax Repeal Bill in 2001

The Super Committee (aka, the Select Joint Committee on Deficit Reduction) made a super hire with the selection of Mark Prater to serve as staff director, according to the Seattle Times.

Prater currently serves as the deputy staff director and chief tax counsel for the powerful Senate Finance Committee.

Prater's accomplishments during his two decades at the committee include pushing the 2001 estate tax repeal legislation through the committee. The Seattle Times reports that he "helped steer President George W. Bush's landmark tax-cut package through that committee in 2001 -- across-the-board rollbacks in income- and estate-tax rates."

Prater's selection by the Super Committee's bi-partisan co-chairs - Senator Patty Murray (D-WA) and Representative Jeb Hensarling (R-TX-5) - indicates that the committee understands that raising the death tax burden is the wrong way to solve the deficit crisis.

Tags: capitol hill, death tax, estate tax, legislation, revenue, super committee

New Report: Estate Tax Repeal Increases Tax Revenue

You’ve heard the tired, false claim: America can’t afford death tax repeal.

This claim is often based on “static” scoring, an incomplete economic model that assumes that cutting taxes will have no effect on economic growth – that the economy will remain “static” in response to changes in the Death Tax.

This assumption flies in the face of common sense. Yet it is the “conventional wisdom” among some in Congress.

The American Family Business Foundation issued a factual challenge today. We published an Issue Brief by former Treasury Department economist Steve Entin. Entin developed a more realistic economic model to demonstrate the true effects of estate tax repeal. His model relies on “dynamic scoring” to consider the behavioral changes that occur when people are not forced to pay the estate tax.

According to Entin’s model, death tax repeal would increase tax revenues by $89 billion over the next ten years.

In short, Entin shows how estate tax repeal will increase investment, business expansion, and job creation. As more businesses spend less money on the estate tax and more money growing their operations, the American economy will grow faster.

As the economy grows and jobs are created, Uncle Sam has a larger tax base, resulting in higher income and capital gains tax revenues.

Entin’s model forces the opponents of repeal to demonstrate the superiority of a “static” model to the more realistic and rigorous “dynamic” model. It gives Congressional staffers, policy advisors, reporters, and voters a resource for understanding the economics of estate tax repeal.

You can read the press release with the brief’s key findings, here. The full brief can be accessed by the link at the bottom of the press release.

For more research about the economic effects of the estate tax, visit www.nodeathtax.org/resources/studies.

Tags: death tax, dyanmic score, estate tax, revenue, static score

New Study: Unmasking the Joint Committee on Taxation

Have you ever considered how much power Congress’ Joint Committee on Taxation (JCT) holds over the future of the estate tax? It’s more than you may realize.

A new American Family Business Foundation study tells the inside story about the JCT and it’s undue influence in tax policy debates.

The JCT is a non-partisan, non-ideological Congressional body that Members of Congress (and the public) look to for honest and accurate estimates of the revenue impact from tax policy changes. Unfortunately, the JCT often relies on economic models that result in incorrect revenue estimates – especially when it comes to the estate tax.

The report offers an in-depth analysis of the JCT’s flawed tax revenue-estimating methodology and the resulting discrepancy between its estimates and the actual tax revenues.  The author, a former Treasury Department official, finds that because the JCT assumes that reductions in the estate tax will have no impact on economic activity, the JCT never considers the possibility that a lower estate tax might enable higher economic growth, and consequently, higher total tax revenues.

As a result, the JCT is effectively an institutional cheerleader in Congress for the death tax. Click here to read the study and learn more.

Tags: death tax, dynamic scoring, estate tax, estimates, joint committee on taxation, revenue, static scoring

Congressman Pitts leads the charge for repeal!

In his weekly column, Congressman Pitts draws attention to the Swedish Death Tax miracle, and the lessons it offers for America. In both countries, the effect of the death tax is to discourage entrepreneurial activity, and so doing, to reduce economic growth.; This has strong implications for Congress’s assumption about death tax revenues:

“There’s a strong temptation for Congress to bring back the estate tax since at least on paper it appears to bring in lots of tax revenue. But projected revenue rarely matches actual money brought into the treasury because individuals take action to reduce their tax liability. However, a strong job market enhances government revenue.”

Cognressman Pitts understands that repeal is “the best way to ensure that businesses and farms go to families and not the government.” “Sweden,” Congressman Pitts observes, “had to learn the hard way by watching one of their most iconic brands move across the sea. We should learn from their example and avoid the consequences of lost jobs and slower economic growth.”

Read Congressman Pitts entire article.

Tags: death tax, estate tax., house of representatives, legislator, politician, rep. joe pitts, revenue, small business, sweden