Estate Tax Repeal = More Deaths?

The great Nate Silver (and we need our own Nate Silver more than we need our own Obama) links to an interesting study conducted in Australia on the 1979 repeal in that country of inheritance/estate taxes (the tax due on the estate of the recently deceased before it can be distributed to the heirs), and the number of reported deaths immediately before and immediately after the repeal of the tax. The study (PDF) concludes that there was "a statistically significant effect of the abolition of estate taxes on the number of deaths", mainly that more people were reported to have died in the days after the tax was abolished than in the days immediately before. The study concedes what should be obvious -- that the statistical aberration may be due to the delay (and falsification) in reporting the date of death, in order to avoid the payment of the estate taxes.

The study may have some significance in the United States, as Mr. Silver points out, because of a quirk in the US estate tax law where the tax would be absolutely repealed in 2010 before being restored to a rate of 55% in 2011.

I personally believe that in theory, the estate tax is among the most fair and equitable of taxes (moreso than the income tax even). At the same time, especially in the Philippines, estate taxes have caused untold hardship to the heirs. Not only because its payment in cash is required before the distribution of the estate, but also because many of the assets of the estate (which in theory answers for the tax) are in the nature of real properties or otherwise illiquid. Right now, the Tax Code allows the extension of the period of payment for around 5 years, but that still is inconvenient to the heirs who would of course want the immediate distribution of the estate.

Why not allow the payment of estate taxes to be accomplished by securing a real estate mortgage over any real property of the estate, in the amount of the estate tax due, from a government financial institution? It would be proper to impose interest, but it should be minimal. There really is no good reason to hold up the distribution of the estate because of estate taxes. The strong possibility is that once an heir has acquired properties from the estate, she/he would be able to develop these to generate more income, resulting in more internal revenue collected by the government. In contrast, if the properties remain in the name of the estate, they tend to remain stagnant because of the need to obtain consensus among the heirs on how to develop the same.