On the June 8 “Nightly News,” NBC’s Brian Williams squeezed in a Democratic talking point when reporting the Senate vote on the death tax.
While Williams said that Senate Majority Leader Bill Frist (R-Tenn.) called the estate tax “unfair” and vowed to bring the legislation to a vote again later in the year, the NBC anchor added that Democrats would oppose what they call “a budget-busting giveaway to the wealthiest Americans.”
Williams left out classic conservative talking points such as [1]Grover Norquist’s quip that “the government has no business erecting a toll booth on the stairway to heaven.”
But political rhetoric aside, NBC News did a disservice to its viewers by also leaving out the findings of tax policy researchers who say:
• the estate tax costs more than it takes in;
• it’s a relatively insignificant source of federal income;
• the United States has one of the highest estate tax rates in the world; and
• estate taxes have a negative impact on economic growth.
The [2]Tax Foundation issued a report on June 2 that found “the estate tax has a negative effect on entrepreneurship, imposes large compliance costs on the U.S. economy, and is not an important source of federal revenue.” Compared to the [3] federal income tax, the estate tax is “nearly five times more costly per dollar of revenue,” the Washington-based think tank argued, referring to studies that have estimated the compliance cost.
The Tax Foundation is hardly alone in arguing the estate tax is unwise policy. In July 2005, the [4]American Council for Capital Formation (ACCF) released a study finding the federal estate tax “higher than that of all other countries surveyed except for Japan and Korea.” Even heavily socialistic countries like France, Finland, Norway, and Hugo Chavez’s Venezuela had lower inheritance or estate taxes. Sweden, Russia, China and Canada were among the countries the ACCF found had no inheritance tax.
Finding that estate taxes negatively impact savings rates, the cost of capital, investment rates, and job growth, ACCF concluded that the “U.S. estate tax is an unnecessary impediment to economic growth.”
