American's for A Fair Estate Tax - Letter to Senators

Americans for a Fair Estate Tax 1742 Connecticut Avenue, NW Washington, DC 20009 TEL: (202) 234-8494 &nbsp FAX: (202) 234-8584 &nbsp www.fairestatetax.org June 6, 2002 Dear Senator __________: Sometime this month, under a previous unanimous consent agreement, the Senate will take up legislation to determine the fate of the federal estate tax. During the debate, Senator Phil Gramm (R-TX) will offer an amendment to permanently repeal the federal estate tax. We strongly urge you to vote “No” on the Gramm amendment. Proponents of repealing the estate tax have attempted to create numerous myths about the estate tax. In order to help you understand the impact of the estate tax in Your State, we have enclosed a fact sheet for your review, along with a general fact sheet. It is important to note that under the estate tax changes approved by Congress last year, and scheduled to take place between now and 2009, the number of individuals who will be subject to the estate tax will drop dramatically. Estimates suggest that only about one-quarter of one percent of all estates will be subject to tax in 2009, when the threshold increases to $3.5 million ($7 million for couples). This means only 6,000 estates in the country will pay the estate tax, and those estates will have an average value of $17 million. In (Your State) it means only X estates will pay the tax. According to estimates prepared by the Congressional Joint Committee on Taxation (JCT), permanently repealing the estate tax will cost roughly $56 billion in the first full year of repeal as scored by JCT (and almost $100 billion during this decade). The costs of repeal skyrocket in the second decade, to about $750 billion. Contrary to critics of the estate tax, the cost to the Internal Revenue Service for administering the estate tax are no higher than the costs of collecting and enforcing individual income taxes. Repealing the estate tax will clearly cause a significant drop in federal revenues, just as this country will need resources to shore up the Social Security system, provide a badly-needed prescription drug benefit for senior citizens, and strengthen public investments in such areas as education, health care, and services to low and moderate-income families. Those supporting repeal argue that the reason for repeal is to help small businesses and family farmers. That is simply not true. In fact, family owned businesses and farms are already eligible for special provisions under current law, on top of the scheduled increases in the exclusion that will take place over the next seven years. At a $3.5 million threshold, the burden on family owned businesses and farms would be minimal. If Congress feels it necessary, adjustments can be made that still preserve the valuable role the estate tax plays in our overall tax system while protecting those family farms and small businesses that would still be affected by the estate tax. Americans for a Fair Estate Tax (AFET) is a broad-based non-partisan coalition of nonprofit groups, including civic, labor, social justice, arts, faith-based, and environmental organizations, as well as organizations providing human services. AFET believes that Congress should reform the estate tax to ensure that family farms and small businesses are not unfairly taxed while leaving more than 98 percent of taxpayers exempt. AFET believes that sensible estate tax reform will safeguard Medicare, Social Security, education, human services and other key public investments that would be threatened by a complete repeal of the estate tax. More information about AFET is available through our web site at www.fairestatetax.org. The steering committee includes groups such as: American Arts Alliance, American Association of University Women, American Federation of State, County and Municipal Employees, Americans for Democratic Action, Campaign for America’s Future, Children’s Defense Fund, Coalition on Human Needs, Evangelical Lutheran Church in America, Lutheran Office for Governmental Affairs, Friends of the Earth, Independent Sector, Minnesota Council of Nonprofits, MoveOn.org, National Committee for Responsive Philanthropy, National Council of Nonprofit Associations, National Women’s Law Center, NETWORK, A National Catholic Social Justice Lobby, OMB Watch, United Church of Christ Justice and Witness Ministries, and United for a Fair Economy. Thank you for your consideration of this critical issue. Sincerely, Gary D. Bass Chair Enc: Your State Fact Sheet “About the Estate Tax” General Fact Sheet
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