Estate Tax Repeal: Response to Brad Delong

Brad Delong asks if any serious economists advocate estate tax repeal. 

Is there any other serious economist arguing that this is a good deal? Any other half-serious economist? Quarter serious?

I'll let Brad decide whether I am a serious economist, but for the record:

Yes, I advocate repeal.

Here is my earlier post on the subject.

Here are my reasons:

The estate tax rewards spendthrifts and penalizes savers.

The estate tax creates needless complication and avoidance behavior, thereby enriching lawyers and accountants.

The estate tax raises less revenue than it appears since it encourages placement of assets in non-taxable accounts.

Here are just a few expenditure reductions that would more than offset any foregone revenue:

Elimination of agricultrual subsidies, ending the war on drugs, increasing the retirement age for social security, withdrawal of U.S. troops from Iraq.

I am sure Brad even agrees with a few of those.

Here is Greg Mankiw's critique of Robert Reich's numbers on how repeal would affect tax revenues.

So, at the possible cost of Brad's opinion of me, let me say it again.

Repeal the estate tax.  Repeal it now.

Comments

[bailey]

AS your "area of expertise is the economics of libertarianism" I'm assuming you're proposing that the estate tax be repealed WHEN offsetting revenues are set aside AND NOT BEFORE? Surely, you don't suggest repealing it NOW & paying for it WHEN Congress votes to cut agriculture subsidies or WHEN we increase the retirement age for SS? Also, I'm at a loss why you believe this would encourage the Walton heirs (& other super-wealthy principal beneficiaries of this) to be more THRIFTY?
I'm flabbergasted to think this is how a "serious" Libertarian Economist "muses" today.

[Jeffrey Alan Miron]

There was a typo in the post; I meant to say "rewards spendthrifts." My apologies, and thanks for noting the error.

[Brad DeLong]

Yes, but they aren't proposing any of those pay-fors, are they?

If the budget were balanced, and if estate tax repeal came with pay-fors, and if you got out the rubber hose of argumentation, you *might* be able to get me to think about estate tax repeal. But with no pay-fors and with the hyperinflation tax looming on the distant horizon?

[anonTaxreader]

I strong case can be made that the repeal as currently proposed is revenue neutral or even revenue enhancing - and I don't mean after some vodoo supply assumptions.

The current repeal would also put an end in the step-up in cost basis of assets passed on at death.

Buying property in Portugal is more popular than ever, an ever increasing numbers of people especially from United Kingdom and Ireland follow their dream in purchasing a holiday home, a buy-to-let property, or moving lock, stock and barrel to the sunny Algarve coast. If you're planning such a move, read our Portugal Property Guide before you buy a property in Algarve.

Finally, there might be some good news for struggling Algarve property owners. Thousands of mortgage loans that were supposed to reset at a higher rate this spring won't be changing…

[エアマックス]

Reproduced, thanks the author's generosity!

[Pfloyd]

Brad DeLong has always been clueless.