Tell Congress: Don't Gut the Estate Tax!
by Sam Rosen-Amy, 12/9/2010
As you could probably tell from our post on Tuesday, we think the recent compromise unnecessarily harms the estate tax, helping millionaires and making the tax code even more regressive. But we need your help to convince Congress that gutting the estate tax is bad policy. Below is a copy of an action alert we just sent out; if you didn't get it, please take a second to read through it and call your senators and representatives. Tell them to fight for a strong estate tax!
December 9, 2010
As you may have heard, President Obama recently announced that he struck a bargain with congressional Republicans to extend all of the Bush-era tax cuts for two years. While the package includes a number of provisions aimed at helping working families and boosting the economy, the estate tax provisions included in the deal are troubling to advocates of fair taxation.
Call your senators and representative today and tell them that the estate tax proposal set forth by President Obama is unacceptable. You can reach your senators and representative through the Capitol Switchboard at 202-224-3121.
The estate tax proposal would exempt the first $5 million of an individual's estate, and the first $10 million of a couple's estate, and only tax amounts above those exemptions at 35 percent. This is a proposal that conservative pundits and politicians have been pushing for years because they know it will essentially eviscerate the estate tax.
Originally, President Obama had been calling for extending 2009 estate tax levels as a compromise on the issue. An extension of the 2009 estate tax would exempt the first $3.5 million ($7 million for couples) of an estate's value and tax any amount above that at a rate of 45 percent. This proposal was more than generous to the wealthy of this nation, as it would affect less than one percent of estates each year.
Whether the government should write a $163 billion check to the nation's richest families through the income tax code is certainly a topic ripe for debate, but what deserves special attention is how President Obama has inexplicably agreed to give away the store to Paris Hilton and other heirs to vast fortunes through the evisceration of the estate tax.
Call your senators and representative at 202-224-3121 and politely express your concern about how Obama's tax deal would undermine this important source of revenue that helps keep middle class tax rates down. You may mention that:
- Polls show a clear majority of voters want there to be an estate tax, believing that an exemption of between $2 million and $3.5 million is fair. Voters continually place the estate tax at the bottom of the list of taxes the government should cut.
- Under the estate tax proposals in the Obama compromise, only 0.15 percent of estates would pay any tax at all. That's about half of the number of estates that would have owed tax at 2009 exemption levels.
- Family farms and small businesses would be virtually unaffected by an estate tax set at 2009 levels. According to the Congressional Research Service, only 0.2 percent of estates with at least half of their assets in a business would owe any estate tax. It also estimated that, had the estate tax been at 2009 levels in 2000 (when the study was done), only 13 farm estates would have insufficient liquidity to pay the estate tax.
- Because the government does not tax assets bequeathed to a charity, the estate tax encourages charitable contributions. In this harsh economic environment, institutions that feed the hungry, shelter the homeless, and train jobless workers are acutely feeling the crush of an increased demand for their services as their funding sources dry up.
Please take a few moments to contact your senators and representative today via the Capitol Switchboard - 202-224-3121.