Generating Revenue by Repealing the Estate Tax

Forbes recently published an article written by Stephen J. Entin (president, The Institute for Research on the Economics of Taxation) and Dick Patten (president, The American Family Business Foundation) that proposes that a repeal of the estate tax would generate enough revenue over a ten year period to cover almost a third of the current $1.2 trillion in deficit reduction.

The authors conducted a study to prove that a repeal of the estate tax would generate more revenue than an increase in the tax would. The study was commissioned by the American Family Business Foundation (which opposes the tax) and was conducted at the Institute for Research on the Economics of Taxation.

Entin and Patten also assert that a repeal of the estate tax would lead to a 2.26% increase in GDP by 2021 ($538 billion) compared to the estimated GDP for 2021 as estimated under the current law. Entin and Petten also claim that a repeal would increase federal revenues to almost $362 billion over a ten year period, with an annual gain of $88 billion per year by 2021.

See Stephen J. Entin and Dick Patten, To Reduce the Deficit, Kill the Estate Tax, Forbes, Oct. 25, 2011.

Special thanks to Jim Hillhouse (WealthCounsel) for bringing this article to my attention.