Atlanta - Georgia could add almost 42,000 new jobs at no cost to taxpayers if the federal estate tax were repealed, according to an analysis released by the Georgia Public Policy Foundation.

The analysis, conducted for the Washingtonbased nonprofit American Family Business Foundation, is based on research by Douglas Holtz-Eakin, the former director of the nonpartisan Congressional Budget Office.

Repealing the Estate Tax, which impacts mostly small and family business owners and the owners of family farms, would lead to an increase of 1.5 million jobs nationwide, according to the study by Holtz-Eakin, who was chairman of the economics department at Syracuse University before going to Washington. The state estimate of 41,827 jobs is calculated based on the percentage of small-business jobs nationally located in Georgia.

"In the midst of tough economic times, any measure that could boost employment without boosting taxes or the deficit should be embraced. Repealing the estate tax, or the 'Death Tax' as it is commonly known, could do just that," Rogers Wade, president of the Georgia Public Policy Foundation. "In this difficult economy, Georgia could certainly benefit from new jobs."

Under current law, the estate tax is assessed at a 45 percent rate on assets in an estate exceeding $3.5 million. Legislation passed during the Bush administration has slated the tax to sunset - or expire - at the end of 2009, only to return in 2011 at a higher rate: 55 percent on estates valued at more than $1 million. If that happens, Georgia could lose as many as 13,942 jobs, out of an estimated 500,000 jobs that would be lost nationwide, according to Holtz-Eakin's analysis.

Congress is expected to take some action on the estate tax this fall, before the "sunset" provision kicks in. In his first budget proposal, President Obama proposed a permanent estate tax rate of 45 percent on estates valued over $3.5 million. Some lawmakers are pressing to raise the rate and lower the exclusion, while others would like to do just the reverse.

"What is certain is that the future of the estate tax should be decided based on facts and not rhetoric," says Wade. "If doing away with the estate tax will trigger the creation of more jobs at no cost to taxpayers, then it would make good sense to eliminate the tax."