Estate Tax Action Alert - 1/7/10

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 outrageous.

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 lfarris@faireconomy.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,



Lee Farris
Senior Organizer on Estate Tax Policy
United for a Fair Economy
617-423-2148 x133
lfarris@faireconomy.org

 


 

Background:

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!

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