Estate Tax Action Alert - 4/23/09

Dear Estate Tax Supporter,

It's outrageous! With high unemployment and foreclosures hitting working families, 51 Senators think that the best way to use $91 billion 1 is to lower estate taxes on the sons and daughters of the richest of the rich.

In early April, all Republican Senators plus 10 Democratic Senators voted for a budget amendment to further reduce the estate tax below the 2009 level. The amendment would permit a $5 million estate tax exemption per person ($10 million per couple) and a lower 35% rate. The New York Times called Senators' claims that the estate tax would hurt small businesses “swill.” 2

Please take 5 minutes TODAY to call your Senators and Representative. Below is a script and toll-free number that make it easy for you to make a difference:

Call toll-free 800-830-5738 or 202-224-3121 (Capitol switchboard) and ask to be connected to one of your two Senators, 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 strongly urge the Senator not to include any cut of the estate tax in the budget 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.
  • Tell them you support Rep. McDermott's estate tax proposal for a $2 million exemption, HR 2023 (described below).
  • And, depending on how your Senators voted, either voice your opposition to their vote to cut the estate tax or thank them for their continued support.
Senators who voted for the estate tax cut in the budget include all Republican Senators and 10 Democrats: Baucus-MT, Bayh-IN, Cantwell-WA, Landrieu-LA, Lincoln-AR, Murray-WA, Bill Nelson-FL, Ben Nelson-NE, and Testor-MT.

Then call your second Senator and your Representative at the same toll-free number.

Email me to let me know what you heard and how it went, at lfarris@faireconomy.org.

It's time to get Congress to come to its senses. YOUR CALL IS NEEDED – PLEASE KEEP TRYING UNTIL YOU GET THROUGH.

Please forward this alert as an attachment to your family, friends and colleagues. Post it on blogs, Facebook, MySpace, and everywhere else you communicate.

Thanks to all of you who called your Senators before the vote, and for calling again now to promote a fair economy.

Thanks for taking action,

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



UFE's Position:
The recent Senate budget vote is far from what United for a Fair Economy supports. UFE supports Rep. McDermott's Sensible Estate Tax Act, HR 2023, with an exemption of $2 million per spouse, or $4 million per couple (same as 2008). It includes a rate of 45% for estates between $2-5 million; 50% for estates between $5-10 million; and the pre-2001 rate of 55% for estates above $10 million – all indexed for inflation. 3 Compared to President Obama's proposal, the Sensible Estate Tax would provide $62 billion more in revenue over 10 years, according to UFE's new report, while also decreasing economic inequality. We will be asking you to contact legislators and the media in support of the Sensible Estate Tax, HR 2023.

What's next for the estate tax?
Under the law passed by President Bush, there is no estate tax in 2010, and estates pay only capital gains tax; then the estate tax returns with a $1 million exemption in 2011. President Obama wants to prevent this one year gap by making the 2009 estate tax law permanent; he wants to continue the 2009 exemption of $3.5 million per spouse and a tax rate of 45% on the amount above the exemption. Compared to current law, the Obama proposal reduces the estate tax by $226 billion over 10 years. 4 The House budget supports the Obama proposal. Now the House and Senate will come up with a compromise budget. (For more on how UFE views Obama's budget overall, click here.)

The final budget does not change tax laws; it creates room in the budget so that tax laws can change in the future. Therefore, we expect that Congress will vote later this year on legislation to make permanent changes in the estate tax. Senator Baucus (chair of the Finance Committee, which controls tax legislation) has introduced legislation that, like Obama's proposal, sets the estate tax exemption at $3.5 million and rate at 45%.



1 The amount the Kyl proposal would cost used to be estimated as $380 billion over 10 years, but the decrease in wealth due to the economic downturn caused the amount to be lowered to $91 billion. See Tax Policy Center estimate.

2Check out the NYT editorial.

3 To learn more about HR2023, check out Rep McDermott's page or read the pdf of the bill.

4 See Tax Policy Center estimate.
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