What would happen if New York joined the majority of states that don’t have estate taxes? An analysis from the Beacon Hill Institute included in a report on the tax from the Empire Center shows a complete phase-out of the tax would boost the state’s gross domestic product by billions.
Gov. Andrew Cuomo has proposed raising the current threshold from $1 million to the federal benchmark of more than $5 million by 2019. Though the Empire Center says that would cut the number of estate tax filings by 90 percent, the Beacon Hill data shows that abolishing the tax would generate $5.63 billion in GDP by 2029 and add 9,880 jobs. The idea is that without the tax, more privately-owned businesses and investment would remain in the state.
“The bottom line here is, if you have a tax like our death tax that is an outlier, and a policy that increasingly isolates you from the rest of the country, why would you want to do something that gives anybody any added incentive to simply not be in New York?” said the Empire Center’s E.J. McMahon, who supports Cuomo’s proposal and called the GDP and jobs increases modest.
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