Roskam rightly argues for repeal of the estate tax (death tax)

Last week U.S. Rep. Peter Roskam, R-Il., rightly denounce the House Ways and Means Committee for refusing to debate the necessity of the estate tax. Roskam argues, and rightly so, that a repeal of the estate tax, also referred to as the death tax by conservative, will benefit small businesses and will help stimulate the national economy.

Roskam called the estate tax an "albatross around the neck" of small business owners and entrepreneurs. A repeal of this tax will help create prosperity, he said. A video of Roskam's argument can be found here.

Currently the estate tax is set to sunset next year, although that would be temporary. It will come back the next year.

Proponents of the estate tax argue the tax on inheritance will prevent the perpetuation of wealth in one family. But put more simply, proponents of the estate tax do not believe money belongs to the people, money belongs to the state. These people believe money should not simply be handed from one person to another without the state getting another taste through taxation. They argue that it is income and should be taxed as such -despite the fact it was already taxed when it was first made.

Following this logic, one can make a Swiftonian argument that the allowance a parent gives his child should be taxed because that's income to the child. Or birthday money should be taxed because that's income to the birthday boy or girl.

Ending the estate tax is the right measure to take. Eliminating the estate tax will allow small businesses to expand at a greater rate. Because of the current rate, many small business owners would rather spend their profits rather than reinvest them back into the company.

Former Congressional Budget Office Director Douglas Holtz-Eakin said in a Los Angeles Times column the "high estate tax rates provide small-business owners with a powerful incentive to limit the size of their companies. Why would a business owner want to expand his or her company beyond a certain size if the end result will be a large "death tax" bill that will negate much of the hard work and sacrifices the owner and the owner's family made over the years?"

Holtz-Eakin cites a study conducted for the American Family Business Foundation, that analyzed the reactions of small businesses to past tax changes. He said they found eliminating the estate tax would "increase the climate for wealth accumulation, ultimately increasing wealth in the United States by $1.6 trillion. Small-business investment would rise by more than 3% annually. That in turn would increase small-business payrolls by as much as 2.6%, adding roughly 1.5 million jobs to the economy, or nearly half the number President Obama hopes to save or "create."

Hopefully Congress will listen to reason rather than tax everyone to death - and beyond.