(Original Post)
Rhode Island's Future
June 15, 2009 Monday 7:40 AM EST
The Carcieri Death Cult
by RIFUTURE
Jun. 15, 2009 Rhode Island's Future
One of the more disgusting elements of Governor Cariceris tax plan for the budget that is going to pop this week is his desire to increase the exemption on the inheritance tax. According to Jim Baron at The Pawtucket Times:
The estate tax, which Carcieri made a point of calling œthe death tax during his testimony, would be modified starting January 1, 2010 to exempt the first million dollars of an estates value, currently the first $675,000 is exempt, one of the lowest exemptions in the nation. Massachusetts exempts the first $1 million, Connecticut exempts the first $2 million and the federal government exempts their first $3.5 million. The change would cost the state $1.5 million in revenue the first year, because that encompasses only half a fiscal year. In later years it would reduce state revenues by about $3 million a year. The estate tax affected 392 taxpayers in 2008, including 326 residents and 66 non-residents.
The inheritance tax is THE most progressive tax in the States tax policy “ hence it is a target for Carcieri. This chart amplifies Jims text above: only the very elite few are taxed.
A new report by Citizens for Tax Justice attacks the idea that so-called Death Taxes are bad for the economy. You may remember the smugness of the Governor when he said people like to talk about the good things in Rhode Island, œbut just dont die here. Well, allow me to offer this invitation:
Yes! We welcome all millionaires who are willing to die here.Call if you need any help in that department..... I will personally hire the moving van to bring you in.
Anyway¦according toe CTJ, beware of the latest so-called œresearch into inheritance taxes because:
Entin uses what is called œdynamic analysis that accounts for the increases in income and profits that allegedly result from a tax cut. Entin claims to find that repealing the estate tax would cause incomes and profits to increase so much that the government would collect more revenue overall than it would if the estate tax is left in place.
But the facts have shown consistently that tax cuts cannot possibly lead to increased revenue. President George W. Bushs Treasury eventually concluded that tax cuts do not pay for themselves. And Holtz-Eakin, as head of the Congressional Budget Office, used dynamic analysis and eventually found that the positive revenue effects of tax cuts were tiny and could never offset but a fraction of the revenue losses that resulted.
In other words, cutting the inheritance tax is about as useful as libertarian fair dust when it comes to running a healthy society.