The Birth Tax

Diane Lim Rogers argues that the repeal of the so-called "death tax" borne by a minute percentage of the populace will actually give rise to a "birth tax" that will be borne by every new baby born.

The problem is that there is no such thing as a free tax cut, unless — ironically in this case — you die before the bill comes due. It is those born into our current fiscal quagmire who can't avoid the burden — an inherited share of the public debt that is, to date, $28,000 per American, and rising. However, this amount probably understates the burden on the youngest and yet-to-be-born Americans, because the commitments to programs such as Social Security and Medicare will rise over their lifetimes. By adding to the debt, estate-tax repeal would eventually raise this per-person burden — the "birth tax" — by thousands of dollars over their lifetime (including more than $3,000 from just the first 10 years after it would take effect).

This "birth tax" is a true cost imposed on all American babies. It cannot be repealed, no matter how upset Americans eventually get about it. Through the harmful effects of deficits on national saving, these future adults will be less likely to have the means to pay off these debts and are in danger of facing a lower standard of living than adult Americans today.

So repealing the estate tax would swap a "death tax," which affects hardly anyone and has been found to have little effect on economic decisions, for a higher "birth tax," which would be universal and seriously detrimental to future economic growth.