The Viriginia Legislature is considering repealing the estate tax this session. Predictably, the tax-and-spend lobby is playing class warfare with this important issue. Their latest salvo revolves around the claim that the repeal would hurt only the select few "super rich." Case in point:
According to the state Department of Taxation, of the 1,866 estate tax returns filed in 2005, only 871 reported any tax liability. Some 298 of those returns were on estates valued at $1 million or less, with the tax owed on average about $12,400 — not exactly an amount that would send the wealthy to the poor house.
And when it comes to the super wealthy — the ones who paid millions in estate taxes — just 14 estates last year were worth more than $10 million.
The stats may be right, but the logic is backwards. Indeed, this evidence probably undermines the argument of the tax-and-spend lobby. The reason why there are so few eligible for estate tax filings is precisely because people choose not to move into a state with high estate taxes.
Remember, the goal of eliminating the estate tax is not just to prevent wealth flight. It’s to encourage wealth entrance. Wealth means growth. Growth means better jobs. Better jobs help everybody, rich and poor alike.