On Taxes, Race Matters

Ninety-seven percent of Americans got the muddy end of the stick in the lopsided tax bill President Obama signed into law in December. Of that 97 percent, people of color will suffer the most.

When it comes to tax policy, the national conversation typically fails to account for race as a factor. So, although the progressive tax movement suffered a setback in the Obama-GOP tax deal, the debate offered reason for hope in the coming two-year battle over the estate tax and top-tier Bush tax cuts.

The Congressional Black Caucus stepped up to express its overwhelming distaste for the tax deal. In doing so, those legislators have signaled their awareness of the connection between tax breaks for the super-rich and the economic backsliding of African American communities. CBC member Rep. Jesse Jackson, Jr. likened President Obama's tax plan to Reaganomics:

"I'm worried that the deal President Obama cut with Republicans sets us up for a Reagan-style set of bad choices…That was President Reagan's strategy: a 'starve the beast' plan of lowered taxes and increased military spending that would force Congress to make deep cuts in programs for the most vulnerable."

The CBC wasn't alone in their outrage. A group of Black church leaders, representing 50,000 congregations, loudly denounced the tax deal. Reverend W. Franklyn Richardson, chairman of the Conference of National Black Churches, wrote:

"Based on our prophetic responsibility to speak to those in power on behalf of the poor, underserved, and vulnerable, we find it utterly shameful that those who insisted that the deficit be reduced, now celebrate billions of dollars being added to the deficit as tax cuts for the wealthy."

Latinos are also among those to feel the scald of poor tax policy. Oscar Chacón, Executive Director of the National Alliance of Latin American and Carribean Communities (NALACC), explains the insecurities Latinos, like African Americans, face in the Obama-GOP tax deal:

"The continuation of the Bush tax cuts for the richest 2% in this time of crisis is an utterly irresponsible act. With the incoming Congress, it is foreseeable that the significant increase in federal debt generated by this "compromise" will be used as a leading argument to enact cutbacks in key social programs that will inevitably have a disproportional negative impact on Latino and Latin American immigrant communities in the U.S."

In the short-term, a worrisome finding in the Obama-GOP tax plan is that the poorest Americans would experience a slight tax increase due to the replacement of the President's "Make Work Pay" tax credit with a temporary 2 percent cut to the payroll tax. Workers of color are strongly represented in the lowest tax brackets, and would therefore carry a disproportionate amount of the weight of that tax hike.

The payroll tax cut itself is like whiskey in a Red Bull can. Measures that cut holes in safety net programs–as this cut threatens to do with Social Security–are dangerous for the working class and people of color, who are more likely to rely on those programs than white Americans. If the payroll tax cut now is used as a reason to cut benefits later, the overall economic impact will be more contractionary than stimulative.

In determining which way is forward, we must constantly consider the type of society in which we want to live. At the most basic level, many of us want the same things, regardless of race or ethnicity: meaningful work that adequately provides basic needs for ourselves and our families, time and the means for recreation and others with which to enjoy it.

We first have to realize that when our communities as a whole do well, we as individuals are more likely to do well. Then it's up to us to create the circumstances that make that possible by fighting for policies that provide opportunity to the most vulnerable populations.

It starts with you and I. We get informed, we take action and we pay it forward to as many others as possible.

Add your reaction Share

Huge Holiday Gifts for America's Super-Rich

The super-rich got an early Christmas gift in the $858 billion tax package that President Obama signed into law on Friday. On top of a two-year extension of Bush-era income tax rates, the wealthiest Americans dodged an estate tax that was set to jump up from zero to 55% for individuals worth more than $1 million. Instead, under a deal Senate Republicans negotiated with the White House, individuals can exempt estates up to $5 million and pay 35% beyond that. The exemption for couples is $10 million.

Official estimates pin the two-year cost of the adjustment at $68 billion, and it will shield all but about 3,600 estates from the levy, according to a projection by the nonpartisan Tax Policy Center.

The windfall for the well-heeled wasn't delivered out of thin air. Indeed, a small band of the richest Americans have acted as their own secret Santas on this issue for years. A 2006 report by Public Citizen and United for a Fair Economy -- both nonprofits opposed to concentrated wealth -- identified 18 families financing a coordinated campaign to repeal the estate tax altogether. Among the leading names behind that push: the Gallos (E&J Gallo Winery), the Kochs (Koch Industries), the Mars' (Mars Inc.), the Waltons (Wal-Mart), and the Wegmans (Wegmans Food Markets). At the time, the report estimated the families' collected net worth to be at least $185 billion, roughly equal to the market cap of Google today.  

Several of the families organized their efforts through an association called the Policy and Taxation Group. Lobbying disclosure laws don't require the group to list its members, and as such, it hasn't disclosed any of them since 1999. But disclosures show the group itself remains active, with two hired-gun lobbying firms on its payroll this year. One of those shops, Patton Boggs, separately shills for the Mars and Wegman families on the issue.

Small estates vs. large estates

Proponents of an estate tax repeal make their argument by citing the burden of the tax on people with significantly less money -- namely small business owners and family farmers. And a wide range of trade associations organized under the banner of the Family Business Estate Tax Coalition -- a group that includes the American Farm Bureau Federation and the National Federation of Independent Business -- has stayed active lobbying to scale the tax back. They argue the levy is so onerous that small to middle-sized concerns are frequently forced to sell just to pay the piper.

Independent analysts question the veracity of those claims. The Tax Policy Center, for example, concludes there is "little hard evidence [to suggest] that the impact of estate taxes on family farms and businesses is a major concern." [...]

By Tory Newmyer for Fortune magazine, December 21, 2010

Add your reaction Share

Don't Mourn - Organize

Hands and Seedling

The sellout of a tax deal has been signed into law. Despite all our best efforts, all the efforts of thousands of groups, hundreds of thousands of individuals, and a few stand-up politicians, we appear helpless to resist the onslaught of the “starve the beast” strategy (except for war, policing & corporate giveaways).

The utter failure of the Obama Administration to stand up to the rightwing assault on lower and middle-income workers, families, and communities has left many angry and feeling powerless.

It is truly dispiriting.

I believe, however, that there is a silver lining. For the first time in a long time, there appears to be a groundswell of recognition that what has happened is in large part due to the lack of a progressive social movement to counterbalance the power of the oligarchy and its Tea Party ground troops. Union leaders, community-based organizing coalitions, progressive beltway think tanks, and many others who have traditionally put most of their strategic eggs in the basket of support for the liberal wing of the Democratic Party, are calling for strategies that will build an independent movement.

And many voices have been raising the need for a unifying, values-based narrative to counter the ultra-conservative blame the victim, blame big government, blame unions, blame Muslims, blame immigrants story amplified by Fox News and mainstream media echo chamber.

More and more progressives are recognizing the importance of organizing, not just mobilizing, and perhaps most important of all, the need for unity across issues and constituencies. As George Lakoff explained:

“Those of us outside of government have to organize that unified movement, and not be limited by specific issue areas. The movement is about progressivism, not just about environmentalism, or social justice, or labor, or education, or health, or peace. The general principles govern them all.”

There is an opportunity here to put aside our notions of turf and any “we’ve got the key facts or the correct analysis or the pipeline to people in power” mentalities. We may need to let go of our egos and keep our eyes on the prize and get some agreement about those general principles.

To my colleagues:

I am proud to be part of the extraordinary work you do day in and day out, and am amazed at how, even with our resource constraints, you still manage to ramp up the intensity when needed. We are suffering defeats but our efforts are not for naught.

Seeds may stay dormant for years before springing to life. I am grateful for the work you do in the garden.

Add your reaction Share

Statement on the Passage of the Obama-GOP Tax Deal

The $900 billion tax bill that was passed by Congress this week provides massive tax breaks for the wealthy. These tax breaks will not create jobs or improve the economy. They add to the deficit and will worsen economic inequality in the United States.

The worst part of the bill is the gutting of the estate tax, which only affects multi-million dollar estates, to its weakest form in 80 years.

Progressive organizations and progressive representatives in the House fought long and hard to establish a stronger estate tax. The sole positive aspect of the estate tax provision is that the cut lasts for only two years.

It’s clear the estate tax will continue to be at the center of future battles for tax justice.

Senate Republicans held relief for unemployed Americans hostage in the middle of the worst employment crisis in decades. Tax breaks for the wealthy were the ransom they demanded.

This bill makes clear the hypocrisy of deficit hawks in both parties. Now that it has been passed, the same deficit hypocrites are already saying their next goal is to shrink public spending on programs that benefit the working and middle classes.

President Obama says that he wants these tax cuts for the wealthy to be temporary. UFE will fight to make sure they are.

The President also says that he plans to focus on overall tax reform. UFE will fight for a stronger estate tax, for taxes that ensure the wealthy pay their fair share, and for taxes that reduce economic inequality.

We face several important choices between now and 2012. Our country will have to seriously consider this question: Do we want an economy that works for everyone, or one that excessively rewards the wealthy?

In the coming years, we at UFE will redouble our efforts to build a movement for tax fairness and a more just and inclusive economy.

See how your Representative voted on both the estate tax amendment and the overall tax bill.

Add your reaction Share

Les inégalités sont-elles responsables de la crise?

Les inégalités sont-elles responsables de la crise?

By Laura Raim for L'Expansion (French business journal)

Les Etats-Unis sont-ils condamnés à plonger dans une nouvelle crise? Le compromis fiscal conclu entre Obama et ses adversaires républicains a été approuvé jeudi par le Congrès américain. Il s'agit du dernier avatar de l'échec du gouvernement à résorber des inégalités sociales qui ne cessent de se creuser depuis des décennies. Inégalités qui seraient pourtant à l'origine aussi bien de la crise de 1929 que de celle de 2007.

Les inégalités sont-elles à l'origine des crises ?

C'est la thèse des économistes Michael Kumhof et Romain Rancière. Dans un article publié fin novembre pour le FMI, ils rapprochent la montée des inégalités de celle de l'endettement des ménages. Pour eux, c'est le point commun entre les décennies précédant la crise économique actuelle et celles d'avant la Grande dépression de 1929. Entre 1910 et 1929 comme entre 1989 et 2008, la part des revenus de la fraction de 1% des ménages les plus riches est en effet passée de 15% à 25%.

"On a étudié comment les agents réagissaient à cette tendance, explique Romain Rancière, professeur associé à la Paris School of Economics. On a constaté que malgré l'érosion de leurs salaires, les Américains 'd'en bas' cherchaient à maintenir un certain standard de vie, comparable à celui des Américains 'd'en haut'. L'expression anglaise 'keeping up with the Joneses' est symptomatique de cette culture où les gens se comparent constamment les uns aux autres et veulent avoir la même maison ou la même voiture que le voisin". Les ménages pauvres ont donc abondamment emprunté pour compenser la stagnation de leurs revenus.

Mais pour emprunter, il faut qu'il y ait des prêteurs. Et justement, les ménages aisés étaient à la recherche de rendements élevés pour placer leur surplus d'épargne. La soif d'endettement des ménages pauvres leur a permis d'investir dans des produits financiers adossés sur ces crédits.

A noter que cette volonté d'emprunter des uns et d'épargner des autres a augmenté les besoins en services financiers et donc gonflé le secteur, dont la taille a doublé entre 1981 et 2007 pour atteindre 9% du PIB.

Le gouvernement a quant à lui encouragé ce processus dans les années 90 en dérégulant le marché bancaire et en poussant Fannie Mae et Freddie Mac à accorder des prêts immobiliers aux ménages les plus modestes. De fait, il est plus facile de masquer les inégalités en encourageant le crédit facile plutôt que de s'y attaquer à travers des politiques de redistribution.

"Le problème, c'est que cet endettement excessif des classes pauvres et moyennes a fragilisé le système financier : quand les prix de l'immobilier ont arrêté de progresser, des emprunteurs ont fait défaut en masse, et cela a déclencé la crise en 2007, poursuit l'économiste. La réduction des inégalités n'est donc pas seulement une question de justice sociale. C'est aussi une nécessité pour empêcher l'éclatement de nouvelles crises financières".

La politique fiscale explique-t-elle le creusement des inégalités ?

La croissance des inégalités s'explique surtout par la montée spectaculaire des très hauts revenus. En ce qui concerne la période récente, les raisons pour cette tendance sont multiples : baisse du pouvoir des syndicats susceptibles de négocier des augmentations collectives, augmentation de la part de la rémunération variable...

Mais la politique fiscale mise en place depuis la présidence de Reagan, et accentuée par celle de Bush, a amplifié cet accroissement des inégalités. D'une part, la baisse des taux marginaux supérieurs d'imposition sur le revenu favorise l'accumulation patrimoniale dans le haut de la distribution. D'autre part, "le capital est bien moins taxé que le travail : l'impôt sur les investissements est de seulement 15%, ce qui profite surtout aux riches car ce sont principalement eux qui ont des investissements, explique Lee Farris, spécialiste de politique fiscale chez United for a Fair Economy, un groupe de pression qui lutte contre les inégalités. C'est pourquoi le taux d'imposition effectif des riches est bien plus bas que celui des classes moyennes".

Pour Paul Volcker, ancien président de la banque centrale et conseiller économique d'Obama, les avantages fiscaux concédés par Bush en 2001 et 2003 ont en effet donné lieu à la plus grande redistribution de revenus de l'histoire américaine "depuis la famille américaine moyenne vers un petit groupe de riches".

Le compromis fiscal d'Obama aggrave-t-il ces inégalités ?

Pour le moment oui. Pour commencer, Obama n'a pas réussi, comme il le souhaitait initialement, à augmenter à 20% l'impôt sur les investissements pour les 2% des contribuables les plus aisés. Il a également échoué à supprimer les allègements consentis aux ménages gagnant plus de 250.000 dollars par an. Mais ce qui choque le plus les démocrates, c'est qu'il accepté d'accorder des exonérations sur l'impôt sur la succession pour tout patrimoine inférieur à 5 millions de dollars. Soit un paquet fiscal encore plus généreux que celui de Bush ! "L'impôt sur les successions aurait pourtant été l'un des plus juste et facile à augmenter, puisque par définition il est acquitté par un mort qui n'a plus besoin de son argent ! s'indigne Lee Farris. C'est même le républicain Teddy Roosevelt qui l'avait instauré."

"D'autres facteurs non fiscaux devraient malgré tout contrebalancer légèrement cette tendance, relativise Romain Rancière. La réforme du système de santé d'Obama par exemple représente un certain transfert de richesse qui doit permettre aux ménages plus pauvres de moins s'endetter".

Add your reaction Share

TFOC 2010 Conference Resources

Twenty states gathered in Atlanta, Georgia on December 5th and 6th, 2010 for the annual TFOC Conference. Below are links to presentations and notes from the conference.

  • Participatory Media (PDF)
  • Working with Ethnic Media - CrossRoadsNews (Doc)
  • Stories from the Front Lines - New York (PDF)
  • Stories from the Front Lines - Colorado (PDF)
  • Stories from the Front Lines - Washington (PDF)
  • Stories from the Front Lines - Virginia (PDF)
  • Demos - Talking about Taxes in Tea Party Times (PDF)
  • Demos - updated compendium on page 10 (PDF)

 

Add your reaction Share

Pass the Pomeroy Amendment to Strengthen the Estate Tax!

The House leadership heard our message loud and clear! But, we still have work to do. TODAY, the House will hold a vote on an amendment to the tax package for a stronger estate tax at the 2009 level.

Our best hope for a stronger estate tax is passing this amendment in the House. Let your representative know what you want right now!

MAKE THREE CALLS using our toll-free number to the Congressional switchboard at 800-830-5738:
  1. Urge your Representative to vote FOR the Pomeroy amendment, which would include a stronger estate tax at the 2009 level. Also ask how he or she will vote on the tax package.

  2. Thank House Speaker Nancy Pelosi for holding the vote to amend the tax package, and

  3. Thank House Majority Leader Steny Hoyer for holding the vote as well.

 

If the House fixes the bill to include a stronger estate tax, there’s still time for the Senate to pass the bill.

While we at UFE do not consider the 2009 estate tax to be ideal – with a $3.5 million exemption per spouse and a 45% rate on amounts above that – it is far better than the estate tax in the Senate bill ($5 million exemption per spouse and 35% rate).

Please forward a link to this alert to friends, family and colleagues. Call and urge them to take action. And, help spread the word further by blogging about this important issue, and sharing this alert on your social networks.

Here are a few news updates on this debate that may be helpful in getting you up-to-speed:

  • This is a great estate tax editorial by USA Today. We hope this helps to inspire you and others in your network to take action.
  • On December 15, the Senate passed, with an 81-19 vote, the Obama-GOP tax deal with a severely weakened estate tax and extension of the Bush tax cuts for the wealthy. See how your Senators voted here.
  • Unfortunately, the Sanders amendment to fix the whole bill by ending the Bush tax cuts for the wealthy, setting the estate tax at the 2009 level, and replacing the payroll tax holiday with a one-year extension of the Make Work Pay Credit, failed 43-57.
Add your reaction Share

Race, Class, and the Obama-GOP Tax Deal

The House Democrats and the Congressional Black Caucus are wise in their righteous opposition of the shameful tax compromise put forth by the Republican Caucus and the Obama Administration. Their message is clear: there will be no deal until significant improvements are made to the package. We must encourage them to hold the line on that demand.

The most inexcusable part of the Obama-GOP package is the dramatic slashing of the federal estate tax even further beyond the already weakened 2009 law. Although the estate tax impacts less than 0.25% of all estates – the wealthiest of the wealthy – it has profound implications for all Americans and communities of color in particular. By curbing the transfer of unlimited wealth from generation to generation, the estate tax is an important tool for ensuring that the inequalities of generations past, including those drawn along the lines of race, do not forever haunt our nation.

For much of U.S. history, white Americans have had greater opportunities to build wealth, often with the help of the federal government programs such as the Homestead Act and the GI Bill. African-Americans were largely denied these opportunities as the weight of overt racism, Jim Crow, bank redlining, and more prevented African-Americans from closing the gap with their white counterparts. Though many of these unjust structures and policies are now gone, the inequalities they created continue to this day thanks to the power of inheritance.

Currently, African-Americans earn 62 cents and Latinos earn 68 cents for every dollar of white income. Troubling as these numbers are, the wealth disparities are even more unsettling. African-Americans have only 10 cents and Latinos have only 12 cents of net wealth for every dollar of white net wealth. To see these appalling disparities, is to see generations of injustice carried forward as wealth, mostly in white hands, is transferred from one generation to the next.

This intergenerational transfer of wealth takes place over many years, including help in buying a first car, paying for college, or subsidizing the down payment on a first home. The apex of this transfer though is at the time of death, when the remainder of the parent’s wealth is usually transferred to the children or grandchildren.

Because the estate tax acts as a check to the concentration of wealth at the very top, it helps to even the economic playing field for each generation to follow. That is precisely why it is of critical importance not only to communities of color, but also to working class white communities

Obama’s decision to concede so much ground to Republicans on this issue is simply baffling. Further weakening of the estate tax is unacceptable. We should instead be finding ways to significantly strengthen it. It’s also clear that buckling on the estate tax, and the tax cuts for the wealthy more broadly, would be dangerous move for Democrats. Congressional Republicans will leverage the deficits created by this tax giveaway to millionaires and billionaires for massive cuts in social services and other public structures, on which all Americans depend.

In the days ahead, we must rally behind the House Democrats and the Congressional Black Caucus. Encourage them to stand strong and not back off their demands in those crucial negotiations. In the words of Frederick Douglas, "Power concedes nothing without a demand. It never did and it never will."

Add your reaction Share

Ezra Klein: An estate tax primer

An estate tax primer

By Ezra Klein
Originally posted on Ezra Klein's blog on WashingtonPost.com on 12/15/10

EstateTax_EstateTaxParamete.jpgThe estate tax is going to dominate the final arguments over the tax deal, so it's worth quickly running through what it is and how much the various plans will cost us.

The basic insight behind the estate tax is that wealth concentration is a problem. That was true in 1916, when the tax was enacted, and it's true today, when it's being neutered. As Ray Madoff explains, the going theory came from Louis Brandeis, who said, “We can have concentrated wealth in the hands of a few or we can have democracy, but we can’t have both.” Andrew Carnegie himself testified in favor the estate tax's creation.

The way it works is simple enough. There's an exemption level beneath which estates are not taxed, and a tax rate that applies to every dollar the estate is worth above the exemption. In 2001, we had a $675,000 exemption and a 55 percent tax rate. So an estate worth $700,000 would take a 55 percent tax on that final $25,000. The estate tax's levels, however, have been changing because the Bush tax cuts -- as you can see in the table on the right -- have been phasing it out. In 2002, it was $1 million, and 50 percent. By 2009, the exemption was up to $3.5 million, and the rate down to 45 percent. And in 2010, the estate tax was repealed.

But not for long. If no action is taken, it returns in 2011 with an exemption of $1 million and a rate of 55 percent. If that seems like weird tax policy -- a single year in which death carried a huge tax break -- it is. But it was never about tax policy. It was a political strategy: Republicans wagered that Democrats wouldn't be able to bring the estate tax back after it had expired. Public opinion would be against them, and it would be backed by a massive amount of money from the nation's richest residents.

So far, it looks like they were right.

The dominant alternative to the estate tax's return -- which had support from both Republicans and, sadly, Democrats -- was the Lincoln-Kyl bill: A $5 million exemption with a 35 percent rate. This is the language that has been included in the tax deal.

So how much does this cost? With a $1 million exemption and a 55 percent rate -- in other words, what will happen if we do nothing -- the estate tax would raise about $700 billion over the next 10 years. The Lincoln-Kyl version would raise less than $300 billion. And the compromise most Democrats have coalesced around -- which was the 2009 level, with a $3.5 million exemption and a 45 percent rate -- would've brought in a bit less than $400 billion.

It's important to keep in mind the cramped space of this debate: If the tax goes back to its scheduled levels, it'll tax 2 percent of estates, If the Lincoln-Kyl levels are put in place, it'll tax 0.25 percent of estates. But the difference between the hundreds of billions the tax could raise and the miniscule number of estates it would affect explains the immense energy Republicans and some Democrats (notably Blanche Lincoln, who has traditionally raked in campaign money from the Walton family) give to the issue. In a report called "Spending Millions to Save Billions," Public Citizen and United for a Fair Economy estimated that a handful of the country's richest families had spent more than $400 million lobbying for the tax's repeal -- and of they were successful, they stood to save more than $70 billion. [emphasis added]

For the rich, fighting the estate tax is simple [sic] a good investment. And it looks like it's paying off.

Update: It's worth clarifying that the tax gets levied on the estate, not the heir. Technically, the heir pays nothing, and the tax needs to be dealt with before the estate is transferred.

Numbers and table credit: The Center on Budget and Policy Priorities.

Add your reaction Share

Tax Deal Fight Now Focuses on House Challenge on Estate Tax

The Nation logo

Sanders Filibuster Halted By Senate

Tax Deal Fight Now Focuses on House Challenge to Estate-Tax Exemption

By John Nichols
Posted on TheNation.com, December 14, 2010

In a display of how Washington insiders practice bipartisanship, most Senate Democrats voted with most Senate Republicans to deliver for the wealthiest Americans.

Senators from both parties, self-identified liberals and conservatives, united to end a filibuster by Vermont independent Bernie Sanders [1], who has led the fight to block an Obama administration deal with Congressional Republicans that extends tax breaks for billionaires and establishes estate-tax exemptions for millionaires.

Sanders conducted an eight-and-a-half-hour filibuster Friday, in which he outlined arguments against the agreement to trade a two-year extension of tax cuts for the wealthiest Americans, along with sweeping estate-tax exemptions, for a one-year extension of benefits for unemployed workers.

On Monday, Senate majority leader Harry Reid, D-Nevada, serving as floor manager for the deal cobbled together by the Obama administration and Senate minority leader Mitch McConnell, R-Kentucky, sought a cloture vote to end the filibuster and open debate on the plan.

Sixty votes were needed to end the filibuster. Reid secured an overwhelming eighty-three.

Most of the fifteen votes to support Sanders's filibuster came from Democrats. Senators Jeff Bingaman of New Mexico, Sherrod Brown of Ohio, Russ Feingold of Wisconsin, Kirsten Gillibrand of New York, Kay Hagan of North Carolina, Frank Lautenberg of New Jersey, Pat Leahy of Vermont, Carl Levin of Michigan and Mark Udall of Colorado voted with Sanders.

They were joined by five Republicans: Oklahoma's Tom Coburn, South Carolina's Jim DeMint, Alabama's Jeff Sessions, Nevada's John Ensign and Ohio's George Voinovich.

The lopsided vote provided an indication that the Senate is likely to approve the agreement.

Sanders remained defiant, however, signaling that approval will not come easily—or quietly. "It makes no sense to me to provide huge tax breaks for millionaires and billionaires while we drive up the national debt that our children and grandchildren will have to pay," the Vermonter said. "I further object strenuously to the lowering of rates on the estate tax, which only benefits the top 0.3 percent, the very, very wealthiest people in this country. I also am concerned about a significant precedent which diverts $112 billion in payroll taxes away from the Social Security trust fund. Our goal now must be to strengthen Social Security, not weaken it. Of course we must extend unemployment benefits and the tax breaks that the middle class desperately needs, but in my view we could have and should have negotiated a much stronger agreement."

The Senate vote may not come until Wednesday, and significant debate is expected before it comes.

While Sanders will be expressing broad opposition, there will also be attempts to amend the legislation. As of now, it is unclear whether amendments will be allowed. The White House is opposed at this point. However, Democratic and Republican senators have proposed amendments, with the most significant being a proposal by a group of Democratic senators to limit the extension of Bush-era tax breaks only to Americans earning less than $1 million a year.

One the Senate votes, action will move to the House, where the number-two Democrat, majority leader Steny Hoyer of Maryland, says "significant" amendments might yet be made.

"There certainly seems to me to be some room for a change which may or may not be perceived by some to be significant," said Hoyer.

Hoyer suggested Monday that House Democrats may push to limit exemptions for estates. As the agreement now stands, there's a a 35 percent estate tax with exemptions for the first $5 million for individual estates and the first $10 million for couples.

House Democrats have been advocating for a 45 percent tax exempting only the first $3.5 million of inherited estates.

United for a Fair Economy , which has noisily objected to the estate-tax deal, held out hope for the House to do the right thing.

"The Senate’s decision to approve the ill-conceived tax package negotiated between Obama and GOP leaders is shameful," said UFE executive director Brian Miller. "Fortunately, the buck does not stop in the Senate. We are calling on the House to fight back and win a better deal for the sake of middle- and working-class Americans—those who will be saddled with massive new debt to pay for wasteful tax breaks for millionaires and billionaires." (emphasis added)

If the two chambers pass different versions of the legislation, they will have to be reconciled in a House-Senate Conference Committee. Such a session would provide a last opportunity to alter the agreement between Obama and the Republicans.

Read this post on TheNation.com.

Add your reaction Share

Boston

62 Summer Street
Boston, MA 02110
(617) 423-2148

Durham

904 Broad Street
Durham, NC 27705
(919) 724-5615

Created with NationBuilder