by E.J. McMahon
Empire Center for New York State Policy
March 06, 2014
The death tax has been promoted as a means of redistributing concentrations of inherited wealth. But research indicates that inheritances make a “surprisingly small” contribution to personal wealth and inequality. Most of the estates affected by the existing New York tax represent the accumulated business values and life savings of individuals, couples and families who are not among the wealthiest one percent. There are easily 10 times as many households with investable assets of more than $1 million as there are New York tax filers with incomes of at least $1 million. New York’s estate tax suppresses economic growth by creating a disincentive to save and invest. Its repeal would add billions to the economy and lead to more job creation. The strongest argument against maintaining New York’s estate tax is the disappearance of such taxes from most other states. This creates yet another competitive disadvantage for the Empire State.