Tuesday, August 30, 2005

Some Tax Service

Kleinrock today breathlessly reports that "[a]ccording to research conducted by the Joint Economic Committee (JCT) [sic], the estate tax generates costs to taxpayers, the economy, and the environment that far exceed any potential benefits that it might arguably produce." The KR report then goes on to list the alleged benefits uncovered by the research. Wrong.

First, the Joint Economic Committee is not the JCT. The JCT is the Joint Committee on Taxation. The difference is more than mere nomenclature. JCT reports are created by a nonpartisan technical staff of the Congressional Joint Committee on Taxation. The efforts of the JCT have been attacked by the knavish since the JCT's research points to a steep increase in the growth of the federal debt if the estate tax is repealed.

The Joint Economic Committee, on the other hand, is a satrap of the knavish right, lead by Representative Jim Saxton of New Jersey. Don't believe me? Take a look at a summary of the JEC's workproduct here.

More significantly, however, is that KR's report of alleged benefits from estate tax repeal appear to be drawn from a JEC report from 1998. There is a 2003 JEC update, but the talking points repeated by KR, even though set forth in that update, are merely quotes drawn from the 1998 report. There is no attempt to actually update the research. By way of example, the contention that the estate tax causes environmental degradation is based on a study "conducted prior to EGTRRA of 2001." The update acknowledges that the allegation that the "existence of the estate tax has reduced the stock of capital in the economy by approximately $497 billion, or 3.2 percent" is drawn from the 1998 report and does not take into account the dramatic increase in the unified credit amount enacted in the EGTRRA of 2001.

In sum, KR's report is simply negligent.

No comments: