Ohio’s Estate Tax Must come to an End
“Estate tax repeal should be a no-brainer: More family businesses and farms growing in size. More jobs. More tax revenues.” Dick Patten, president American Family Business Foundation.
For centuries, economists have pointed out the harmful economic effects of estate and inheritance taxes.
Excerpts from the book Rich States, Poor States (by Laffer, Moore, Williams, 2009) explain the harm:
“Many studies indicate that the death tax is so inefficient, so adverse to saving and capital investment, and so complicated, that the states and the federal government would actually recoup much if not all revenues lost from this tax with higher tax receipts resulting from long term economic growth.
“The estate tax causes distortions in household decision making about work effort, saving and investment (and the loss of economic efficiency) that are even greater in size than those from other taxes on income from capital.”
hat tip: Washington’s Blog
Sunday, March 14, 2010
This is an open letter to the economics, finance and banking communities.
I don’t have any dog in the fight, other than to figure out and then publicize what is best for the greatest number of people. People I greatly respect advocate for federal-level public banking, state public banks or a return to the gold standard. I am simply attempting to start a high-level debate about what the best option is.
Please see responses posted by economists and others below. I will update the responses as I receive them.
How Is Credit Created?
I pointed out in September:
As PhD economist Steve Keen pointed out recently, 2 Nobel-prize winning economists have shown that the assumption that reserves are created from excess deposits is not true:
The model of money creation that Obama’s economic advisers have sold him was shown to be empirically false over three decades ago.
The first economist to establish this was the American Post Keynesian economist Basil Moore, but similar results were found by two of the staunchest neoclassical economists, Nobel Prize winners Kydland and Prescott in a 1990 paper Real Facts and a Monetary Myth.
Looking at the timing of economic variables, they found that credit money was created about 4 periods before government money. However, the “money multiplier” model argues that government money is created first to bolster bank reserves, and then credit money is created afterwards by the process of banks lending out their increased reserves.