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Impact of Estate Taxes on Farmers The findings of the Kennesaw study are consistent with those of others who have studied the drain estate taxes impose on the economy. Foster and Fleenor (1996)18 concluded that in order to match the disincentive effects of estate taxes, income taxes would have to be raised to roughly 70%. Saposnik, Tompkins and Tutterow (1996)19 developed a model of investment decisions in closely-held firms, illustrating how estate taxes may act as a disincentive to owners investing in illiquid, value-increasing investments. Bernheim (1987)20 concluded that the indirect effect of estate taxes on federal personal income tax receipts results in a neutral or even negative impact on federal tax revenue. Soldano (1996)21 concluded that estate tax revenue is not worth the costs of government enforcement efforts, reporting that government and taxpayers spend approximately $0.65 on enforcement and compliance activities for each dollar of estate and gift tax collected. Wagner (1996)22 calculated the number of jobs that would have been created from 1971 to 1991 had estate and gift taxes been eliminated in 1971. He estimated that 262,000 more jobs would have been created than actually were. He also estimated that the supply of capital would have been $398.6 billion higher, and GDP would have increased by $46.3 billion more than actually occurred. Aronoff (1995)23 estimated the effect of a business owner investing $100,000 in the business as opposed to spending that amount on estate tax life insurance premiums. He estimated that this $100,000 investment would in that same year produce:
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