ALBUQUERQUE — New Mexico could add some 8,930 new jobs at no cost to taxpayers if the federal estate tax were repealed, according to a new analysis by the Rio Grande Foundation.
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, DC.
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 New Mexico.
“In the midst of 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 Paul Gessing, President of the Rio Grande Foundation. “If there is one thing New Mexico could use, it’s an increase in the number of available jobs.”
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: 55 percent on estates valued at more than $1 million.
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.
“What is certain is that the future of the estate tax should be decided based on facts and not rhetoric,” said Gessing. “If doing away with the estate tax will trigger the creation of more jobs at no cost to taxpayers, President Obama and Congress should eliminate the death tax entirely.”
Full text of the Holtz-Eakin study is available at:www.nodeathtax.org/files/AFBF_Holtz_Eakin_2009.pdf