Rhode Island could add some 6268 new jobs at no cost to taxpayers if the federal estate tax were repealed, according to a new analysis by the Ocean State Policy Research Institute. 
 
The estimates are based on research by the former director of the nonpartisan Congressional Budget Office, Douglas Holtz-Eakin. The research was conducted for the nonprofit American Family Business Foundation (AFBF), Washington, DC. 
 
Holtz-Eakin, who served as chairman of the economics department at Syracuse University before going to Washington, estimated in his study that repeal of the Estate Tax, which impacts mostly small and family business owners and the owners of family farms, would lead to an increase of 1.5 million jobs nationwide. The state estimate is calculated based on the percentage of small-business jobs nationally located in Rhode Island. 
 
 "In the midst of tough economic times, it seems obvious that members of our congressional delegation would support a measure that could boost employment without boosting taxes or the deficit. Repealing the estate tax, or the 'Death Tax' as it is commonly known, could do just that," said William Felkner, President of the Ocean State Policy Research Institute.   "If there is one thing Rhode Island could use, it's an increase in the number of available jobs." 
 
Under current law, the estate tax is assessed at a 45 percent rate on assets in an estate exceeding $3.5 million.  Legislation passed during the Bush administration has slated the tax to sunset - or expire - at the end of 2009, only to return in 2011 at a higher rate.
 
"Our employment estimates are most likely conservative," explained Felkner, "because the state estate tax, or sponge tax, is even worse in Rhode Island as our exemption amount is the lowest in the nation at $675,000 and we are equally onerous on most other taxes."
 
Congress is expected to take some action on the estate tax this fall, before the "sunset" provision kicks in.  In his first budget proposal, President Obama proposed a permanent estate tax rate of 45 percent on estates valued over $3.5 million.  Some lawmakers are pressing to raise the rate and lower the exclusion, while others would like to do just the reverse.
 
"What is certain is that the future of the estate tax should be decided based on facts and not rhetoric," says Felkner.  "If doing away with the estate tax will trigger the creation of more jobs at no cost to taxpayers, then it would make good sense to eliminate the tax."
 
The Ocean State Policy Research Institute is a non-profit non-partisan research organization. The American Family Business Foundation is the research and education voice of the American Family Business Institute, an organization representing American family business owners and farmers. 

About OSPRI:
 
Created in 2007, our work is focused on crafting sound public policy based on the principles of free enterprise, limited government, and traditional American values. We offer timely research and analysis on important issues to be shared with elected officials, the media, business leaders, community organizations and individual citizens. In recent months, we have been responsible for such successful projects as the Transparency Train - A public financial and legislative information repository, as well as regular updates published and available on our website and companion blog.
 
About The Transparency Train:
 
The Transparency Train Web Portal (www.transparencytrain.org) provides access to a variety of websites designed to present public information in a Google-style searchable format. These sites include:
RI Data which contains every budget, payroll, public employee contract and monthly check register for all cities, towns and school districts in Rhode Island.
RI Votes which is an online database of legislation and voting records.
LRB Watch provides analysis and information on the State Labor Relations Board.
RI Schools is an interactive website that allows viewers to create comparative graphs of school districts plotting various metrics such as cost per student, test scores and the number of employees (coming Spring 2009).
RI Donors will contain a "connect the dots" approach to viewing political and lobbying finances (coming Fall 2009).
Take Action, a "how-to" manual that shows citizens how to file Freedom Of Information Act requests for public information and what to do if they don't comply.