New York’s estate tax will hit a growing number of middle-class households, small business owners and farmers, and is needlessly hindering economic growth while giving the state’s wealthiest households an added incentive to migrate, according to a report released today by the Empire Center for Public Policy.

“New York’s Death Tax: The Case for Killing It,” notes that New York is one of only 14 states still imposing an estate tax. Repealing the tax in the long term could ultimately boost the state’s economic output by nearly $6 billion and promote the creation of 10,000 more jobs, according to an econometric analysis cited in the Empire Center report.

Read online or download the full report HERE. 

The federal estate tax doesn’t tax estates valued below $5.34 million, or up to twice as much for married couples. New York, however, begins taxing estates valued at just $1 million. As a result, New York taxed more estates in 2012 – nearly 4,000 – than the federal government taxed nationally. Governor Andrew Cuomo has proposed raising the state’s death tax threshold to match the federal level and reducing the state rate from 16 to 10 percent over the next five years. That proposal would have eliminated the tax on 90 percent of estates filing in 2013, the Empire Center report said.

“New York’s estate tax doesn’t only apply to the vilified top ‘1 percent.’ It hits individuals and families who have worked hard and saved their money,” said E.J. McMahon, president of the Empire Center and author of the report. “The tax stymies economic growth and puts New York on an uneven playing field.”

 “It’s misleading to think the state’s estate tax only impacts the wealthiest New Yorkers. It also affects the very farmers who put food on your table every day. That’s why it is imperative that New York increase the estate tax exemption to match the federal threshold. This reform could be the difference between a farm family selling off land to pay a tax bill and continuing their heritage of working the land,” said Dean Norton, president of New York Farm Bureau.

“Reforming the estate tax is a major priority for small business. This report sheds light on the true impact the estate tax has on Main Street and illustrates how far behind New York is on this issue relative to the rest of the country.” said Mike Durant, state director for the National Federation of Independent Business. “It is imperative that New York ultimately repeal the estate tax, but the reforms currently sought by Governor Cuomo are a necessary first step.”