Portland, Oregon, July 15, 2009 – Oregon could add some 20,000 new jobs at no cost to taxpayers if the federal estate tax were repealed, according to a new analysis by Cascade Policy Institute.
The estimates are based on research by the former director of the nonpartisan Congressional Budget Office, Douglas Holtz-Eakin. The research was conducted for the nonprofit American Family Business Foundation (AFBF), Washington, D.C.
Holtz-Eakin, who served as chairman of the economics department at Syracuse University before going to Washington, estimated in his study that repeal of the Estate Tax, which impacts mostly small and family business owners and the owners of family farms, would lead to an increase of 1.5 million jobs nationwide. The state estimate is calculated based on the percentage of small-business jobs nationally located in Oregon.
“In these tough economic times, it seems obvious that members of our congressional delegation would support a measure that could boost employment without boosting taxes or the deficit. Repealing the estate tax, or the “˜Death Tax’ as it is commonly known, could do just that,” said Steve Buckstein, Cascade Policy Institute Senior Policy Analyst and founder. “For a state that is number two nationally in unemployment, Oregon and 20,000 Oregonians could really use the jobs that ending the Death Tax will promote.”
Under current law, the estate tax is assessed at a 45 percent rate on assets in an estate exceeding $3.5 million. Legislation passed during the Bush administration has slated the tax to sunset — or expire — at the end of 2009, only to return in 2011 at a higher rate.
Congress is expected to take some action on the estate tax this fall, before the “sunset” provision kicks in. In his first budget proposal, President Obama proposed a permanent estate tax rate of 45 percent on estates valued over $3.5 million. Some lawmakers are pressing to raise the rate and lower the exclusion, while others would like to do just the reverse.
“The future of the estate tax should be decided based on facts, not rhetoric,” says Buckstein. “If doing away with the estate tax will trigger the creation of more jobs at no cost to taxpayers, then it would make good sense to eliminate the tax.”
Cascade Policy Institute is a nonprofit, nonpartisan free market think tank based in Portland. The American Family Business Foundation is the research and education voice of the American Family Business Institute, an organization representing American family business owners and farmers.