The (absence of) political support for the estate tax

I have started working on the (absence of) political support for estate taxation, and I have come across this entry into Paul Krugman's blog.

The Heritage Heritage

A blast from the past: the first time I spent a lot of time dredging through Heritage Foundation “analyses” was when I was writing this 2002 piece on inequality. And I was particularly struck by the Heritage work on the estate tax (pdf), which contained passages like this:

Every day, social and economic decisions are made with the estate tax in mind. Minority businesspeople suffer anxious moments wondering whether the businesses they hope to hand to down to their children will be destroyed by the estate tax bill. Factories drone on with worn-out equipment that would be replaced if capital costs fell. Women who have raised their children struggle to find ways to re-enter the work force without upsetting the family’s estate tax avoidance plan.

What do these examples have in common? They almost never happen. Very few people pay any estate tax at all; very few small businesses were worth enough to pay the estate tax, let alone face breakup because of taxes, even at 2000 levels.

Also note the phony macroeconomic estimates in the Heritage document, with vast job losses from the estate tax — something I don’t think any serious economist would consider plausible.

And yes, William Beach, who wrote that ludicrous death tax piece, also did the vanishing 2.8 percent unemployment piece for Ryan. He’s what Heritage considers an expert.