Economist Arthur Laffer analyzes the economic and fiscal impact of the taxes
NASHVILLE – The Beacon Center of Tennessee has teamed up with the Laffer Center for Supply-Side Economics to publish a recent analysis of Tennessee’s death and gift taxes by noted economist Arthur Laffer. The study, “The Economic Consequences of Tennessee’s Gift and Estate Tax,” was conducted by Dr. Laffer, who is a former advisor to President Ronald Reagan and now resides in Tennessee, and Dr. Wayne Winegarden. The study comes as lawmakers consider repealing the two taxes during the current legislative session.
Among the study’s findings:
- Had Tennessee eliminated these taxes a decade ago, the state would have created an additional 200,000 to 220,000 new jobs.
- Tennessee’s gross state product would have been between $6 billion and $18 billion greater without these taxes over that time period.
- Tennessee’s asset base would have increased by at least $16 billion and as much as $48 billion as a result of eliminating the taxes.
“The state death and gift taxes drive job creators, investors, and taxpayers out of Tennessee,” said Justin Owen, president & CEO of the Beacon Center. “Those who actually wind up paying the taxes—family business owners and rural farmers—can ill afford it.”
The study shows how a full repeal of these taxes would not only boost the state’s economy, but also bring much-needed tax revenue to state and local coffers. While the taxes have brought in less than $1 billion over the past decade, their imposition has cost state and local governments as much as $7.3 billion in revenue from other sources such as sales, property, and business taxes.
“Our analysis proves that not only is repealing these two taxes the right thing to do morally, it is in the best economic and fiscal interest of all Tennesseans to eliminate them,” said Dr. Laffer.
The study can be found online at: http://www.beacontn.org/wp-content/uploads/The-Economic-Consequences-of-Tennessees-Gift-Estate-Tax.pdf
The Beacon Center, founded as the Tennessee Center for Policy Research, is an independent, nonprofit, and nonpartisan think tank committed to achieving a freer, more prosperous Tennessee. Through research and advocacy, the Beacon Center promotes policy solutions grounded in the principles of free markets, individual liberty, and limited government.
The Laffer Center for Supply-Side Economics is dedicated to preserving and promoting the work of Dr. Laffer and the core tenets of supply-side economics: low rate, flat taxes; spending restraint; sound money; limited regulation; and free trade. The Laffer Center is a partnership between Dr. Laffer and the Texas Public Policy Foundation, a non-profit, non-partisan research institute dedicated to promoting and defending liberty, personal responsibility and free enterprise in Texas and the nation.