"For the first time in decades, Washington is daring to tackle financial
reform. It took the collapse of the whole sector and the resulting
public outrage to get them started, and it will take pressure to keep
them going. It’s not certain that Congress and the Obama administration
will have the courage to prioritize the long-term health of our economy
and the legitimate interests of the public over the self-serving
demands of their friends on Wall Street.
Three steps are essential: regulating executive compensation, separating financial “casino” activities from regular banking, and creating a consumer financial protection agency."
Read the full article in The Register Citizen.
"President Obama's Afghanistan troop surge decision caused considerable rancor among liberal House Democrats Tuesday at the same time they are being asked to vote this week on a measure cutting taxes for millionaires. [...]
The House bill would set the estate tax at 45 percent with an exemption for up to $3.5 million in inherited assets per individual, at a $234 billion cost. That figure would not require offsets under a deal House leaders struck with members of the Blue Dog Coalition, provided the Senate passes statutory pay/go language.
But that is an abstract concept to liberals weighing the cost of war and a tax cut for a small group of wealthy families. The House bill would head off the estate tax's scheduled 2011 increase to 55 percent, with the threshold lowered to $1 million. It would protect all but about 5,500 families, or the richest 0.2 percent from the tax, according to the Tax Policy Center.
That's not good enough for those who argue multimillionaires are still getting a free ride. 'I feel that it's a contradiction to vote on a tax break for people worth $3.5 million and above while we're sending troops overseas without any idea how we're going to pay for it,' said Rep. Raul Grijalva, D-Ariz., co-chairman of the Congressional Progressive Caucus.
Rules Chairwoman Louise Slaughter called the $234 billion cost a 'pretty astonishing figure' and suggested some of those revenues should be set aside to help pay for the war. 'The money is going to be needed here if indeed they get enough votes to pay for this adventure here in Afghanistan,' Slaughter said. [...]
Advocacy groups such as United for a Fair Economy have been plugging a higher estate tax rate and lower exemption as critical particularly given the state of the economy and need to create jobs. They support a bill from Rep. Jim McDermott, D-Wash., that would set the exemption at $2 million per spouse, adjusted for inflation, with a progressively rising estate tax rate based on the value of an estate. For estates worth up to $5 million, the tax would be 45 percent, rising to 50 percent for up to $10 million and 55 percent for those above $10 million. That would cost about $203 billion, according to the Joint Committee on Taxation.
In an alert to UFE members Tuesday, senior organizer for estate tax policy Lee Farris wrote the McDermott bill was the best policy 'because our country needs funds for long-overdue investments in health care, education, clean energy, and other public services -- not more tax breaks for the heirs of the richest 1 percent.'"
Read the full article on RiehlWorldViews.com
"Congress needs to act on an estate bill to prevent the rate from going to zero next year. Advocacy groups such as United for a Fair Economy have pushed for a higher estate tax rate and lower exemption as critical particularly given the state of the economy and need to create jobs. They support a bill from Congressman Jim McDermott (D-Washington) that would set the exemption at $2 million per spouse, adjusted for inflation, with a progressively rising estate tax rate based on the value of an estate. For estates worth up to $5 million, the tax would be 45 percent, rising to 50 percent for up to $10 million and 55 percent for those above $10 million."
Read the full posting on Rotor.com.
Dear Estate Tax supporter,
In case you haven't already heard, the Senate failed to extend the estate tax at its 2009 level before the end of the year.
Because the Senate failed to act, the estate tax will disappear for one
year starting Jan. 1, 2010. That failure is fiscally irresponsible and
Now, Senate leaders are rightfully pledging to act in early 2010 to reinstate the federal estate tax retroactive to January 1, 2010 (see background below).
Call toll-free 800-830-5738 or 202-224-3121 (Capitol switchboard) and ask to be connected to your two US Senators and your Representative, or call their direct line. Then, ask for the staff person who handles taxes, or tell the person who answers the phone:
- My name is _____________. I am a constituent.
- I urge you to pass an extension of the estate tax very early in 2010, and make it retroactive to Jan. 1, 2010.
- I support an estate tax that is stronger than 2009 law, because our country needs funds for middle class investments in health care, education, clean energy, and other public services – not more tax breaks for the heirs of the richest 1 percent.
- I strongly oppose any efforts to weaken the estate tax, such as the Lincoln-Kyl proposal for a $10 million exemption per married couple and a 35% rate.
PLEASE CALL YOUR SENATORS AND REPRESENTATIVE IN THE FIRST WEEK OF JANUARY!
Email me, Lee Farris, at firstname.lastname@example.org to let me know what you heard and how it went. If you get a reply email or a letter from your legislator, please send me a copy.
Last month, we held a major press event with Bill Gates Sr., Vanguard founder John Bogle, Richard Rockefeller, and SEIU's Anna Burger. Together they called on Congress to pass a stronger estate tax, and joined UFE in support of the Sensible Estate Tax Act by Rep. Jim McDermott (HR 2023) which represents a middle ground between the 2009 and 2011 estate tax laws.
You can read and hear their statements online, and see all the resulting media coverage, including The Wall Street Journal, NPR, and Fox News.
The Americans for a Fair Estate Tax coalition also condemned the Senate failure extend the estate tax in a letter to all Senators (PDF).
THIS IS THE YEAR! 2010 is
hugely important for the estate tax, so please stick with us, as we'll
be in touch with monthly updates and calls to action.
We need as much support as possible, so please share this alert with anyone you know who may want to get involved. And, post it on blogs, Facebook, Twitter, MySpace, and everywhere else you communicate.
Thanks for taking action,
Senior Organizer on Estate Tax Policy
United for a Fair Economy
Senator Baucus, chair of the Senate Finance Committee, has said that he
wants the Senate to pass a retroactive extension of the estate tax law
early in 2010. UFE urges the Senate to act as soon as possible, and to
make the estate tax stronger than 2009 law, which has a $7 million
exemption for married couples ($3.5 million for individuals) and a 45%
rate on amounts above the exemption.
The absence of the estate tax in 2010 will actually hurt farms and small businesses. In 2009, about 5500 estates nationwide will pay estate tax; of those, only about 100 are farm and small business estates. But in 2010, as many as 71,000 estates, including many farm and business estates, may have to pay capital gains tax on assets they sell that are worth more than $1.3 million.
In 2010, debate over the permanent estate tax will be taking place, and the Senate will be the main battleground. There are several plans already on the table:
- The Sensible Estate Tax Plan. Working with UFE and others, Rep. Jim McDermott (WA) introduced a bill - the Sensible Estate Tax Act, HR 2023 (PDF) – that sets the exemption at $4 million per married couple ($2 million per individual) and establishes a progressive rate structure starting at 45%, with a higher rate of 55% on estates above $10 million. The McDermott bill would result in billions more revenue and would be much more effective at reducing economic inequality than the Obama proposal. The bill is the most fiscally responsible bill of all current proposals.
- The Obama Plan. President Obama has repeatedly said that he wants to return to pre-Bush tax rates on wealthy people earning more than $250,000. Yet his proposal for a permanent new estate tax law would lock us into the weakest version of the estate tax from the Bush-era tax cuts. Obama's proposal calls for a $7 million exemption per married couple ($3.5 million per individual) and a 45% tax rate. Compared to current law, the Obama proposal reduces the estate tax by $234 billion over 10 years. The House passed this proposal (HR 4154) sponsored by Rep. Pomeroy, on Dec. 3rd.
- The Gut-the-Tax Plan. The U.S. Chamber of Commerce, the National Federation of Independent Businesses and 44 other organizations have called for a weakened estate tax with a $10 million exemption per married couple and a 35% tax rate. Senators Lincoln and Kyl are expected to introduce this proposal to effectively gut the estate tax. In 2009, 10 Democratic Senators voted for a similar plan: Baucus-MT, Bayh-IN, Cantwell-WA, Landrieu-LA, Lincoln-AR, Murray-WA, Bill Nelson-FL, Ben Nelson-NE, Pryor-AR and Tester-MT.
- The Keep-Pushing-for-Repeal Plan. Although not currently politically feasible, opponents like Grover Norquist of Americans for Tax Reform, and the American Family Business Institute (AFBI), continue to lobby for permanent repeal of the estate tax. AFBI recently announced an effort to campaign against estate tax supporters in the Senate and House. Their main target is Senate Majority Leader, Harry Reid-NV.
Did You Know...
- The estate tax has been cut five times since 2001, with the result that few people, including farmers and small business owners, pay it – 99 in 100 people do not pay it. In 2009, a married couple could pass on $7 million tax-free. That's more than the average American earns in four lifetimes!
- Repealing the estate tax would increase the federal deficit by $1.3 trillion dollars over 10 years. Those taxes would likely be shifted from multi-millionaire inheritors to the struggling middle class.
- Cutting the estate tax again would give a huge tax break to the very same corporate executives and Wall Street speculators who wrecked the economy and then paid themselves multi-million dollar bonuses after taxpayers bailed them out.
- The anti-estate tax campaign has been funded by a few super-wealthy families (PDF) who own giant companies like Mars Candy, Gallo Wines, and Wal-Mart.
P.S. Remember to call toll-free 800-830-5738 or 202-224-3121 (Capitol switchboard) to support a strong estate tax, and ask to be connected to your US Senators and your Representative, or call their direct lines.
United for a Fair Economy has been working to preserve the estate tax for ten years. If you would like to support this work, please make a contribution today!
"The latest employment figures sadly unsurprising: with about 35 percent of black men aged 16 to 24 unemployed, the epidemic of joblessness in Black America encapsulates a nationwide crisis. Although high unemployment and deep racial disparities are nothing new, the depth and length of the recession has prompted progressive economists and community groups to warnof an impending "social catastrophe."
The Economic Policy Institute, a progressive think tank, has outlined the racial and ethnic dimensions of the crisis, noting that the mainstream statistics reflect only part of the problem:
[...] Altogether, 17.5% of the labor force is underemployed—more than 27 million Americans, including one in four minority workers. [...] we can expect a third of the work force, and 40% of workers of color, to be unemployed or underemployed at some point over the next year.
NAACP President Ben Jealous said in a recent joint statement by civil rights groups, 'Black people in the U.S. are the canaries in the coal mine... What we get tends to hit everybody later.'
A deep recession would see median U.S. family income decline by 4% and Black income decrease by 6%. Thirty-three percent of Blacks and 41% of Latinos would be in danger of falling out of the middle class into poverty compared to 25% nationally.
Of course, there are reasons to focus on the black unemployment crisis other than what it might portend for white unemployment.The figures spell out how systemic inequality is woven into the fiber of the economy. United for a Fair Economy's research on the racial wealth divide depicts a chronically skewed distribution of opportunity: poverty rates among blacks and Latinos is more than double that for whites, and even among the so-called middle class, economic stability is eroding faster for people of color."
TABOR Gets Trounced in 2009
By Karen Kraut, Coordinator, Tax Fairness Organizing Collaborative
Voters in Maine and Washington state in November soundly rejected a
ballot initiative that is central to the right wing’s anti-tax,
The policy, known deceptively as TABOR (Taxpayer Bill of Rights), seeks to hamstring state and local government’s ability to maintain and invest in the quality public services residents need and want.
Colorado was the first to adopt a TABOR constitutional amendment in 1992. TABOR’s tax and spending limits greatly contributed to significant deterioration of public services. Between 1992 and 2001, Colorado’s K-12 spending as a share of personal income went from ranking 35th to 49th in the nation. Colorado’s problems were so severe that, in 2005, voters temporarily repealed TABOR [see this brief] to restore the state’s weakened public services and infrastructure. Colorado became the poster child for campaigns against TABOR.
Despite the destructive consequences of TABOR, anti-tax activists have attempted to export this failed policy [see p. 3 of this report] to other states throughout the nation over the last many years. However, through rigorous education and organizing, progressive coalitions have defeated TABOR, in increasing percentages. In the process, they deepened people’s understanding of the essential role government and taxation play in supporting the common good and the public services we so highly value.
Some anti-estate tax organizations are still working to gut the tax in the coming year. UFE board member Bill Creighton responds:
"The wealthy share a responsibility to America to pay taxes, and many wealthy people like me support the estate tax because we realize there can be no private wealth without public resources. It’s time for Congress to do what’s right and establish a strong estate tax starting in 2010."
Read the full debate online in BusinessWeek.
"[T]he way the property tax works is that the share collected by a district is to be used by that district. Among the property taxes assessed in Seoul for this year, the difference between the highest, the Gangnam district, and the lowest was a factor of about 15. Within such a structure, the kindergartens, schools and public health centers in a neighborhood are inevitably better the higher the land and housing values.
This calls to mind the group Responsible Wealth, which was one of the most vociferous opponents of former U.S. President George W. Bush’s push to abolish the inheritance tax. Its members included some of the wealthiest people in the world [...] In other words, a group of billionaires got together to cry, 'Don’t create a new tax system to benefit us.' It is of course important to donate the money you earn to good causes, but is this not a more fundamental form of noblesse oblige?"
Read the full article online in The Hankyoreh.
"Wall Street is...[t]aking control with borrowed money, stripping assets, slashing jobs and cashing out.
Taxpayer bailouts saved Wall Street from choking on its own greed. Now, as the Wall Street Journal reports, 'Major U.S. banks and securities firms are on pace to pay their employees about $140 billion this year...' [which is] more than the combined budgets of the U.S. Departments of Commerce, Education, Energy, Housing and Urban Development, the National Science Foundation and the Environmental Protection Agency. [...]
The government heavily subsidizes the megabanks, but it's the small banks that provide higher savings interest, lower fees, lower loan and credit card rates, and do much of the lending to small business, who in turn create most new jobs.
Behind their Main Street rhetoric, Congress and the Obama administration have so far been the change Wall Street can believe in. The administration and Federal Reserve are loaded with revolving door Wall Streeters and their proteges. Campaign donors and lobbyists are working Congress to minimize and distort reform."
Read the full article in the Athens Banner-Herald online.
"Liberal advocacy groups are getting behind a bill authored by Rep. Jim McDermott (D-Wash.) that would keep the tax in place at a lower exemption rate for estates than would legislation favored by lobbyists for farmers and small businesses.
Lee Farris, the senior organizer for estate tax policy for United for a Fair Economy, said her group supports the McDermott bill.
Farris said “it is a very different ballgame since Bush first came into the office.”
“We have just spent a huge amount bailing out Wall Street,” Farris said. “Now, it would be a lousy time to send even more money to the wealthy.” Other organizations, such as Citizens for Tax Justice and Results, an anti-poverty group, are also behind McDermott’s bill.
While the estate tax would lapse in 2010, it would return the following year to what it was before the Bush administration passed its first round of tax cuts in 2001 — a tax rate of 55 percent and an exemption for those with assets valued at $1 million or below at the time of their death. Current law has the tax rate at 45 percent and those with assets valued at or below $3.5 million earning an exemption.
If passed before Congress leaves this year, McDermott’s bill would permanently set up a $2 million exemption level and progressive tax rates for assets valued higher than that level. Farris believes the bill would yield the most government revenue, which could be used for healthcare reform and other federal programs."
Read the full article at The Hill online.