The U.S. House of Representative could vote as early as Wednesday of this week to increase the estate tax (known popularly as the death tax). The bill it will consider, sponsored by Rep. Earl Pomeroy (D-North Dakota), would extend permanently the death tax at its current 45 percent rate and $3.5 million exemption. This extension would be a drastic tax increase since the death tax expires on January 1, 2010.
In addition, the Pomeroy bill would be a repudiation of the policy stands of several past Congresses that all agreed the death tax must go. They came to that conclusion with good reason. Heritage research has shown that the death tax is a severe hindrance to the economy because it:
• discourages savings and investment;
• undermines job creation;
• suppresses productivity and wage growth;
• contradicts the central promise of American life: wealth creation;
• hurts those who have their savings tied up in land; and
• hurts businesses owned by women and African-Americans.
The economy cannot afford an increase in the Death Tax. What it really needs is the boost full repeal of this harmful tax would give. It is time for Congress to do the right thing and kill the Death Tax once and for all.
As the debate over the death tax continues, you can follow all of the Heritage Foundation’s research on the topic at our new rapid response page http://www.heritage.org/News/Death-Tax.cfm.