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2 78211 Economists Tell Congress

“End the Death Tax Now!”
MILTON FRIEDMAN
An Open Letter from Economists on the Estate Tax
To whom it may concern: Spend your money on riotous living — no tax; leave your money to your children — the tax collector gets paid first. That is the message sent by the estate tax. It is a bad message and the estate tax is a bad tax. The basic argument against the estate tax is moral. It taxes virtue — living frugally and accumulating wealth. It discourages saving and asset accumulation and encourages wasteful spending. It wastes the talent of able people, both those engaged in enforcing the tax and the probably even greater number engaged in devising arrangements to escape the tax. The income used to accumulate the assets left at death was taxed when it was received; the earnings on the assets were taxed year after year; so, the estate tax is a second or third layer of taxation on the same assets. The tax raises little direct revenue — partly because the estate planners have been so successful in devising ways to escape the tax. Costs of collection and compliance are high, perhaps of the same order as direct tax receipts. The encouragement of spending reduces national wealth and thereby the flow of aggregate taxable income. These indirect effects mean that eliminating the tax is likely to increase rather than decrease the net revenue yield to the federal government. The estate tax is justified as a means of reducing the concentration of wealth. However, the truly wealthy and their estate planners avoid the tax. The low yield of the tax is a testament to the ineffectiveness of the tax as a force for reshaping the distribution of wealth. The primary defense made for the estate tax is that it encourages charity. If so, there are better and less costly ways to encourage charity. Eliminating the estate tax will lead to higher economic growth, which is the most important variable in determining the level of charitable giving. Death should not be a taxable event. The estate tax should be repealed. Signed, Milton Friedman Nobel Laureate in Economics Hoover Institution

COSIGNED BY THE FOLLOWING ECONOMISTS:
Burton Abrams, Univ. of Delaware Keith Acheson, Carleton Univ. Douglas K. Adie, Ohio Univ. Armen Alchian Donald L. Alexander, Western Michigan Univ. William R. Allen, Univ. of California, Los Angeles Ryan C. Amacher, Univ. of Texas, Arlington Gary M. Anderson, California State Univ., Northridge Terry Anderson, PERC/Hoover Institution Geoffrey T. Andron, Houston–Tillotson Coll. Craig E. Aronoff, Kennesaw State Coll. John A. Baden, Foundation for Research on Economics and the Environment (FREE) Charles W. Baird, California State Univ., Hayward Ray Ball, Univ. of Chicago King Banaian, St. Cloud State Univ. William Barnett, II, Loyola Univ. of New Orleans William W. Beach, The Heritage Foundation John Berthoud, George Washington Univ. George Bittlingmayer, Univ. of Kansas Krzystof Bledowski Thomas E. Borcherding, Claremont Graduate Univ. George H. Borts, Brown Univ. Samuel Bostaph, Univ. of Dallas Ronald S. Boster Wayne T. Brough, Citizens for a Sound Economy Steven Buccola, Oregon State Univ. M. Northrup Buechner, St. John’s Univ. Henry N. Butler, Univ. of Kansas Bruce J. Caldwell, Univ. of North Carolina, Greensboro Colin D. Campbell, Dartmouth Coll. Oral Capps, Jr., Texas A&M Univ. Thomas F. Cargill, Univ. of Nevada Phillip P. Caruso, Western Michigan Univ. Barry R. Chiswick, Univ. of Illinois, Chicago Howard Chochran, Jr., Belmont Univ. Bhagwan Chowdhry, The Anderson School at UCLA Kenneth W. Clarkson, Univ. of Miami R. Morris Coats, Nicholls State Univ. John P. Cochran, Metropolitan State Coll. of Denver Lloyd R. Cohen, George Mason Univ. Boyd D. Collier, Tarleton State Univ. Roy E. Cordato, John Locke Foundation Jim F. Couch, Univ. of North Alabama David B. Cox, Univ. of Denver Eleanor D. Craig, Jonkoping School of Business Carl J. Dahlman, RAND Corporation Jerry W. Dauterive, Loyola Univ. Audrey B. Davidson, Univ. of Louisville Ronnie H. Davis, Printing Industries of America Louis De Alessi, Univ. of Miami Thomas De Leire, Univ. of Chicago Gregory J. Delemeester, Marietta Coll. William G. Dewald, Northern Arizona Univ. Arthur M. Diamond, Jr., Univ. of Nebraska Conrad Doenges, Univ. of Texas at Austin Jeffrey Dorfman, Univ. of Georgia Jefferson G. Edgens, Univ. of Kentucky Franklin R. Edwards, Columbia Univ. James R. Edwards, Montana State Univ.–Northern Isaac Ehrlich, State Univ. of New York, Buffalo Dennis F. Ellis, Univ. of Michigan–Flint Michael A. Ellis, Kent State Univ. Kenneth G. Elzinga, Univ. of Virginia Stephen Entin, Inst. for Research on the Economics of Taxation Paul Evans, Ohio State Univ. Franklin Falero, Jr., California State Univ., Bakersfield Susan K. Feigenbaum, Univ. of Missouri, St. Louis Arthur A. Fleisher, II, Metropolitan State Coll. Gladys Gallaway, Ohio Univ. Lowell E. Gallaway, Ohio Univ. Gary M. Galles, Pepperdine Univ. Roger W. Garrison, Auburn Univ. Gerald T. Garvey, Claremont Graduate Univ. James F. Gatti, Univ. of Vermont David E. R. Gay, Univ. of Arkansas R. Richard Geddes, Hoover Institution Gregory M. Gelles, Univ. of Missouri, Rolla Robert Geske, Univ. of California, Los Angeles Joseph A. Giacalone, St. John's Univ. Micha Gisser, Univ. of New Mexico Charles J. Goetz, Univ. of Virginia Peter Gordon, Univ. of Southern California Richard L. Gordon, Pennsylvania State Univ. Jim Granato, Michigan State Univ. Timothy Groseclose, Stanford Univ. David D. Haddock, Northwestern Univ. Dennis Halcoussis, California State Univ., Northridge Robert G. Hansen, Dartmouth Coll. Stephen Happel, Arizona State Univ. Robert Harding, California State Univ., Northridge Frank L. Hefner, Coll. of Charleston John M. Heineke, Santa Clara Univ. Robert B. Helms, American Enterprise Inst. Andrew R. Herr, St. Vincent Coll. Robert Higgs, The Independent Institute Peter J. Hill, Wheaton Coll. Laurie Simon Hodrick, Columbia Univ. Robert J. Hodrick, Columbia Univ. Kevin D. Hoover, Univ. of California, Davis George Horwich, Purdue Univ. Steven G. Horwitz, St. Lawrence Univ. Daniel Houser, Univ. of Arizona Ronald A. Howard, Stanford Univ. Larry Iannaccone, Santa Clara Univ. Ronald N. Johnson, Montana State Univ. Michael S. Kaylen, Univ. of Missouri Raymond J. Keating, Small Business Survival Cmte. E. Han Kim, Univ. of Michigan Benjamin Klein, Univ. of California, Los Angeles Daniel B. Klein, Santa Clara Univ. Charles R. Knoeber, North Carolina State Univ. Vladimir Kontorovich, Haverford Coll. Michael I. Krauss, George Mason Univ. Robert Krol, California State Univ., Northridge Deepak K. Lal, Univ. of California, Los Angeles Robert A. Lawson, Capital Univ. Edward J. Lopez, Univ. of North Texas James R. Lothian, Fordham Univ. John R. Lott, Jr., Yale Univ. John Lunn, Hope Coll. R. Ashley Lyman, Univ. of Idaho Glenn MacDonald, Univ. of Rochester Doug Mackenzie, Kean Univ. Paul Malatesta, Univ. of Washington Michael T. Maloney, Clemson Univ. Yuri Maltsev, Carthage Coll. Henry G. Manne, Univ. of Chicago John G. Matsusaka, Univ. of Chicago Merrill Matthews, Jr., American Conservative Network Fred S. McChesney, Northwestern Univ. Deirdre N. McCloskey, Univ. of Illinois, Chicago Roger E. Meiners, Univ. of Texas, Arlington David Meiselman, Virginia Tech Stephen Mennemeyer, Univ. of Alabama, Birmingham Lloyd J. Mercer, Univ. of California, Santa Barbara James C. Miller, III, Citizens for a Sound Economy Tracy C. Miller, Grove City Coll. Jeffrey D. Milyo, Univ. of Chicago Jeffrey A. Miron, Boston Univ. Daniel J. Mitchell, The Heritage Foundation Carlisle E. Moody, Coll. of William & Mary John H. Moore, Grove City Coll. Laurence S. Moss, Babson Coll. George R. Neumann, Univ. of Iowa William Orzechowski, Orzechowski and Walker Scott Palmer Allen M. Parkman, Univ. of New Mexico Mark J. Perry, Univ. of Michigan William H. Peterson, Campbell Univ. Charles I. Plosser, Univ. of Rochester B. Michael Pritchett, Brigham Young Univ. Richard W. Rahn, Discovery Inst. Kevin Reffett, Arizona State Univ. Morgan O. Reynolds, Texas A & M Univ. Barrie Richardson, Centenary Coll. of Louisiana James R. Rinehart, Francis Marion Univ. Mario J. Rizzo, New York Univ. Nancy Roberts, Arizona State Univ. Richard Roll, Univ. of California, Los Angeles David Rose, Univ. of Missouri–St. Louis Ronald D. Rotunda, Univ. of Illinois Coll. of Law Roy J. Ruffin, Univ. of Houston Kevin D. Sachs, Univ. of Cincinnati Joseph T. Salerno, Pace Univ. Michael T. Saliba, Loyola Univ. Thomas R. Saving, Texas A & M Univ. Michael A. Schuyler, Inst. for Research on the Economics of Taxation Anna J. Schwartz, Nat’l. Bureau of Economic Research G. William Schwert, Univ. of Rochester Gerald W. Scully, Univ. of Texas, Dallas Larry J. Sechrest, Sul Ross State Univ. Alan Shapiro, Univ. of Southern California Stephen Shmanske, California State Univ., Hayward William F. Shughart, II, Univ. of Mississippi Tyler Shumway, Univ. of Michigan Jerome Siebert, Univ. of California, Berkeley Vernon L. Smith, Univ. of Arizona Russell Sobel, West Virginia Univ. David L. Sollars, Auburn Univ. of Montgomery John C. Soper, John Carroll Univ. Stan Spurlock, Mississippi State Univ. Michael Staten, Georgetown Univ. Mark Steckbeck, George Mason Univ. E. Frank Stephenson, Berry Coll. Houston H. Stokes, Univ. of Illinois, Chicago Shirley V. Svorny, California State Univ., Northridge Alexander T. Tabarrok, The Independent Institute Robert Tamura, Clemson Univ. Gregory S. Taylor, Northwestern Univ. David J. Theroux, The Independent Institute Clifford F. Thies, Shenandoah Univ. Robert D. Tollison, Univ. of Mississippi Michelle A. Vachris, Christopher Newport Coll. Ludwig Van Den Hauw J. G. A. van Mierlo, Maastricht Univ. Richard Vedder, Ohio Univ. Richard E. Wagner, George Mason Univ. Michael Welker, Franciscan Univ. John T. Wenders, Univ. of Idaho Robert Whaples, Wake Forest Univ. James B. Whisker, West Virginia Univ. Glen Whitman, California State Univ., Northridge Michael E. Williams, Univ. of Denver Walter E. Williams, George Mason Univ. Wayne Winegarden, Philip Morris Asia Ltd. Sunny Wong, Univ. of Oregon Gene C. Wunder, Washburn Univ. Paul J. Zak, Claremont Graduate Univ. Kate Zhou, Univ. of Hawaii Benjamin Zycher, Claremont Inst. New signatories since May 1, 2001. Richard Agnello, Univ. of Delaware Mohammed Akacem, Metropolitan State Coll. of Denver Paul Ballantyne, Univ. of Colorado at Colorado Springs James T. Bennett, George Mason Univ. William Beranek Cecil E. Bohanon, Ball State Univ. Richard C. Burdekin, Claremont McKenna Coll. James L. Butkiewicz, Univ. of Delaware John E. Calfee, American Enterprise Institute William M. Clark, Univ. of Oklahoma W. Mark Crain, George Mason Univ. Robert W. Crandall, Brookings Institution Arthur S. De Vany, Univ. of California, Irvine Edward W. Erickson, North Carolina State Univ. Allen Featherstone, Kansas State Univ. Marvin Frankel, Univ. of Illinois at UrbanaChampaign Fred Glahe, Univ. of Colorado Henry G. Grabowski, Duke Univ. David R. Henderson, Hoover Institution Robert S. Herren, North Dakota State Univ. Randall Holcombe, Florida State Univ. Dale M. Hoover, North Carolina State Univ. Neil Howe Lawrence Hunter, Empower America Richard Jackson Stephen Jackstadt, Univ. of Alaska David C. Klingaman, Ohio Univ. David N. Laband, Auburn Univ. William Latham, Univ. of Delaware Dennis E. Logue, Dartmouth Coll. Donald L. Luskin, Metamarkets.com Michael L. Marlow, Calif. Polytechnic State Univ., San Luis Obispo James E. McClure, Ball State Univ. John Merrifield, Univ. of Texas, San Antonio Todd Milbourn, Washington Univ. Geoffrey Miller, New York Univ. Law School Wilson Mixon, Berry Coll. Michael A. Morrisey, Univ. of Alabama Andrew P. Morriss, Case Western Reserve Univ. Craig M. Newmark, North Carolina State Univ. Scott Nystrom, Mercatus Center James B. O’Neill, Univ. of Delaware E.C. Pasour, North Carolina State Univ. Judd W. Patton, Bellevue Univ. Gary M. Pecquet, Loyola Univ. of New Orleans Barry W. Poulson, Univ. of Colorado Spencer S. Reibman, Georgia State Univ. Alan Reynolds, Hudson Institute Paul Craig Roberts, Hoover Institution James A. Roumasset, Univ. of Hawaii, Manoa Charles K. Rowley, George Mason Univ. Paul H. Rubin, Emory Univ. Michael D. Ryngaert, Univ. of Florida D. Eric Schansberg, Indiana Univ. Southeast Larry Schweikart, Univ. of Dayton Robert H. Scott, California State Univ., Chico Howard Segermark, Segermark Associates, Inc. Courtenay C. Stone, Ball State Univ. Henry Thompson, Auburn Univ. Walter N. Thurman, North Carolina State Univ. Richard H. Timberlake, Jr., Univ. of Georgia Walter J. Wessels, North Carolina State Univ. Peter M. Williams, Univ. of North Alabama Gary Wolfram, Hillsdale Coll. Catherine D. Wood Colin Wright, Claremont McKenna Coll. Thomas L. Wyrick, Southwest Missouri State Univ.

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