Waterville mayor testifies for repeal of Ohio's estate taxx

Mayor Derek Merrin is scheduled to testify this morning on S.B. 90, the repeal of Ohio's estate tax. These are his prepared remarks:

My name is Derek Merrin; I’m the mayor of the Village of Waterville. Waterville is located in Lucas County and has a population of approximately 5,500 residents. Our general fund budget is about $3,100,000. Historically, we have received $30,000 to $60,000 annually from the estate tax, which represents less than two percent of the general fund budget.

I fully support S.B. 90—the repeal of the estate tax. The tax is morally wrong; it is misguided tax policy and has put Ohio at a competitive disadvantage.

An individual’s estate consists of after-tax dollars. Their earnings have already been taxed multiple times. Even though deceased Ohioans have worked hard, played by the system, saved responsibly, the State of Ohio’s estate tax swoops in and plies their savings from their hands. This is morally unjust and cannot be rationalized.

It’s been said, “The goodness of a nation can be judged by how it cares for its dead.” If the state of Ohio would be judged by this standard, it would fail.

As an Ohio mayor, I felt compelled to testify today. A few short-sighted, local officials have been vocally protesting the repeal of the estate tax. They claim their cities, villages, and townships will lose revenue if the tax is repealed. They have missed the whole point.
The tax is hurting the entire state of Ohio, which includes their communities. As the state of Ohio goes, so goes local communities.

The tax has contributed to Ohio’s population decline. When Ohioans leave to protect their assets, Ohio loses their wealth, spending power, and future capital investments. I might add that those are all taxable. It’s not a zero-sum game. On the contrary, if you repeal the tax, Ohio will ultimately increase collection on other taxes, particularly income and sales taxes. See, taxes only generate revenue if there are people and wealth to tax. This isn’t about political ideology, but common-sense economic principles that have been proven true over time.

Furthermore, when Ohioans leave, we lose human capital that is vital for economic growth. The estate tax motivates successful businessman, entrepreneurs, and older residents to leave Ohio. Not only do we lose their financial resources and seed money, but we lose their experience, business acumen, and talent to continue to invest in Ohio.

Thirty states do not have an estate/inheritance tax and realize its poor public policy. By most economic indicators, those states are outpacing Ohio in job creation. Many local officials have neglected to see this economic phenomenon and failed to see the big picture.

Senators: You were elected—with the hope you would see the big picture and understand the macro-effects of tax policy. It’s clear that Ohio’s estate tax is an impediment to economic growth. To help local communities and the state of Ohio to prosper, I encourage you to repeal the estate tax. It’s time Ohio has a tax structure that moves Ohio forward.

Initiative to repeal Ohio's estate tax begins

This just in via email:

FOR IMMEDIATE RELEASE
Monday, September 14, 2009

Buckeye Institute Sample Language Used for Estate Tax Repeal

COLUMBUS - The Buckeye Institute's 1851 Center drafted language for an initiated statute amendment to eliminate Ohio's estate tax that was adopted by Citizens United to End Ohio's Estate Tax. On Friday the Attorney General approved the language for the group to begin collecting the signatures required to have the state legislature consider the initiative.

"The estate tax causes a significant harm to Ohio's families, specifically families owning small businesses and farmers," said Maurice Thompson, 1851 Center Director. "It also drives many of our wealthiest citizens, who are sometimes our most productive, out of the state."

The Buckeye Institute released a study in cooperation with the American Legislative Exchange Council which finds Ohio's estate tax is the worst in the country, kicking in on estates valued as low as $338,333.

"People shouldn't be forced to move away from their homes and their families in order to avoid an overreaching government," Thompson added.

The language for the initiative is available here.

The Buckeye Institute for Public Policy Solutions, together with its 1851 Center for Constitutional Law, is a nonpartisan research and educational institute devoted to individual liberty, economic freedom, personal responsibility and limited government in Ohio.

-30-

Study shows Estate Tax is killing Ohio jobs

This just in from The Buckeye Institute:

For Immediate Release
Wednesday, June 17, 2009

Estate Tax is Killing 58,000 Ohio Jobs Study Says

COLUMBUS - Ohio could add 58,363 new jobs at no cost to taxpayers if the federal estate tax were repealed, according to a new analysis by the Buckeye Institute for Public Policy Solutions. 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. The full report can be found at http://www.buckeyeinstitute.org/estatetaxreport.pdf.

"As this study clearly shows, the federal estate tax is hurting Ohio's families and businesses," said Buckeye Institute analyst Marc Kilmer. "The penalties this tax imposes on Ohioans who save and invest are ridiculous. Our state's economy would be in better shape if this death tax died and Ohioans were allowed to keep and pass on the assets they worked so hard to build."

The AFBF study found the estate tax has a significant impact on family businesses. Many small businesses are hit especially hard by the estate tax's high marginal tax rate. The current federal estate tax will be eliminated for one year, 2010, but in 2011 it will be reimposed at a rate of 55% on estates over $1 million.

The study found permanently eliminating the death tax would create 1.5 million additional small business jobs. In addition, it would increase hiring by almost 9%, increase payrolls by almost 3%, and expand investment by 3%. The state estimate is calculated based on the percentage of national small-business jobs located in Ohio.

By imposing a high marginal rate on savings and asset accumulation, an estate tax gives entrepreneurs incentives to spend and not save. In a small business context, this hurts the ability of businesses to grow and expand, leading to higher unemployment.

"President Obama has put job creation at the top of his priority list," said Kilmer. "Permanently eliminating the estate tax would be one of the most effective stimulus packages our nation could see."

The Buckeye Institute for Public Policy Solutions is a nonpartisan research and educational institute devoted to individual liberty, economic freedom, personal responsibility and limited government in Ohio. 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.