New Estate Tax Bill Taxes the 1% to Benefit the 99%

FOR IMMEDIATE RELEASE – November 17, 2011

Contact: Maz Ali, 617-423-2148 x101, mali@faireconomy.org 

United for a Fair Economy and Allies Back New Estate Tax Bill

Proposal Raises Revenue from Top 1%, Protects Programs that Benefit 99%

Boston, MA – United for a Fair Economy and Responsible Wealth applaud the introduction of the Sensible Estate Tax Act of 2011 by Congressman Jim McDermott, a senior member of the House Ways and Means Committee. The bill is the only comprehensive estate tax reform plan that does not repeal or continue the existing estate tax law.

The Sensible Estate Tax Act of 2011 (H.R. 3467) brings the estate tax rates back to pre-Bush era levels, with a maximum marginal rate of 55% and a $1 million exemption, both indexed to inflation beginning in 2000.

Representative McDermott stated, “This legislation will take us back to an estate tax that worked and provided the kind of certainty that practitioners and taxpayers have been calling for since the Bush tax cuts took effect.  Never in our history has an exemption increased over 500% in less than a decade, and known loopholes been left open for abuse. The estate tax is broken, and it’s time we fix it.”

“Before Congress even thinks about cutting Social Security, Medicare, and other programs that benefit low- and middle-income people, our political leaders should support the strong estate tax proposed by Rep. McDermott,” stated Lee Farris, Estate Tax Coordinator for United for a Fair Economy. “The estate tax would bring in substantial revenue from those who can best afford it, the estates of millionaires and billionaires, and would at the same time reduce economic inequality by restoring our nation’s most effective curb on inherited wealth.”

Many prominent wealthy Americans have expressed their support of the estate tax. “I welcome the introduction of this legislation, and commend Congressman McDermott on his leadership in continuing the conversation for a fair and equitable estate tax. I have long believed that individual wealth is only possible through the significant investment America makes in the lives of its citizens.  An estate tax ensures that those who have benefited the most from this great country reinvest in the very promise of wealth and opportunity America provided them,” said Bill Gates, Sr., Responsible Wealth member.

Responsible Wealth member, CampusWorks Chairman and former investment banker Eric Schoenberg said, "As a patriotic American who will be subject to the estate tax, I wholeheartedly support Representative McDermott's proposed bill to return estate tax rates to those that existed through 2000. Given the obvious need for significant steps to get the United States' fiscal house in order, I think it is perfectly reasonable to ask the wealthiest Americans to be the first to sacrifice, and particularly fitting that we should contribute to the public welfare at the same time that we are contributing to the private welfare of our heirs."

The legislation also includes a number of critical reforms and provisions to close estate tax loopholes. In summary, the Sensible Estate Tax Act of 2011 would:

  • Reunify and make permanent the portability for spouses of the gift and estate tax exclusions;
  • Restore the credit for state transfer taxes paid;
  • Close loopholes in the asset valuation and minority discount rules;
  • Provide for consistent basis reporting between estates and beneficiaries;
  • Require a minimum 10 year period for grantor retained annuity trusts; and 
  • Provide meaningful limits to the generation skipping transfer tax exemption.

The legislation is endorsed by United for a Fair Economy, Responsible Wealth, Citizens for Tax Justice, OMB Watch, Friends of the Earth, Tax Fairness Oregon, and others, pending list formation.

United for a Fair Economy (www.faireconomy.org) is a national organization working to close the growing income and wealth divides in the U.S. Responsible Wealth, a project of United for a Fair Economy, is a network of 700 business leaders, high-wealth and upper-income advocates of progressive tax policies and corporate accountability.

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