Estate Tax Statement from Anna Burger, SEIU Secretary/Treasurer
The following statement was delivered on UFE's 12/15/09 Estate Tax Teleconference.
"Just yesterday, President Obama met with CEOs of the nation’s biggest financial institutions. His message to them, one I think we can all agree with, was: we need an economy that works for everyone, not just for Wall Street and the wealthiest Americans.
I don’t need to tell all of you how dire the situation is for most working families right now: the unemployment rate is at 10 percent. Twenty-seven million Americans are unemployed or underemployed. One in seven mortgages are delinquent or in foreclosure.
And yet, while average Americans are worrying simply about whether or not they
can keep their home, estate tax legislation right now in Congress would lavish
$230 billion in tax cuts on a few extremely wealthy families who have already
inherited millions of dollars.
Why? Because a few extremely wealthy families and George W. Bush—yes, that guy—said so.
This year, only 3 out of every 1000 estates will be large enough to be subject to any estate tax. The remaining 997 out of a thousand of us get nothing from this tax cut bonanza.
Want to know how the legislation works? Consider a wealthy family with two children. Each child could inherit $3.5 million, tax-free. That means each child would receive more, tax-free, than the average worker would earn in two lifetimes. And the worker would be paying taxes on their earnings.
Each of these children would receive more, tax-free than 240 minimum wage workers would receive in a year.
So who’s behind this unfair legislation?
United for a Fair Economy has documented that 18 families that stand to gain $70 billion if the estate tax is repealed have spent tens of millions of dollars lobbying to weaken or repeal the estate tax.
During the Bush years, the richest one percent of Americans received $550 billion in tax cuts. The richest 1 percent in the U.S. hold more wealth than the bottom 90 percent.
Yet here we are considering how we can continue to extend Bush-era policies that favor a few rich families at a time of record deficits, and while millions of Americans struggle to keep a roof over their head and put food on the table.
It’s fiscally and morally irresponsible.
We need Congress to say no to the demands of 18 wealthy families, and to stand up for the other 305 million of us."
"United For a Fair Economy, the left-leaning policy group, held a press call Tuesday to argue for preserving the estate tax before it temporarily expires in 2010.
During the call, Vanguard-founder [John] Bogle made an interesting argument for why the wealthy should pay the tax. In short, he said the wealthy owe a large part of their fortune to the country and its government.
[Bogle stated,] 'Our birthright has created enormous wealth and stability of property and for us to think that we don’t want to pay our fair share of the costs running this nation when our young citizens, let us not forget, are dying in wars out there trying to protect democracy and the nation we built up, it seems to be quite outrageous.'
Bill Gates Sr., father of the Microsoft founder, made a similar argument. He cited economists who estimate that the nation’s stable market for goods and assets adds 30% to the goods we own.
He said 50% of the annual growth in our economy is a function of new technology...often created with government support [...]
'The largest and most generous venture capitalist in the universe is Uncle Sam,' he said. 'And it’s clear that those who become wealthy did not do it alone. The people owe something back to society that enables them to create that wealth.'"
Read the full blog by Robert Frank on Wall Street Journal Blogs.
"In the decades before our nation was born, colonists came to America to escape the tyranny of the crown and the powerful aristocracies that dominated much of Europe. Carving out their space on new soil, these colonists sought to create an economy built on merit and the equity of one’s own sweat, not the aristocratic bloodlines of one’s predecessors. [...]
[B]y the dawn of the 20th Century, America began to see vast sums of wealth concentrated into the hands of a very few industrialists and railroad barons. [...]
It was in this environment that President Theodore Roosevelt led the charge for a federal estate tax [...] Almost 100 years after its creation, Congress is poised to cast a crucial vote on the estate tax, a vote that could either weaken or strengthen what is left of the estate tax [...]
At the same time, the revenue raised from the estate tax supports vital public structures and systems – transportation and energy infrastructure, education and healthcare, among others. These essential structures lay the foundation of broad-based prosperity and economic stability for the next generation. In the end, the estate tax is fundamentally about recycling opportunity for all."
Read the full op-ed by UFE's Executive Director, Brian Miller, on AlterNet.
"The imminent expiration of the federal tax on multimillion-dollar estates and a pledge by congressional Democrats to renew it retroactively next year marks a new phase in an ongoing battle over the levy.
Senate Finance Committee Chairman Max Baucus yesterday said Congress will seek to restore the tax retroactively in 2010 after Republicans objected to his efforts to adopt a stopgap measure to extend the current law for three months.
The tax now yields about $25 billion in revenue annually. The levy, on the books since 1916, is scheduled to lapse for a year on Jan. 1 under the provisions on a tax-cut bill enacted in 2001. It then would be reinstated in 2011.
The collapse of a last-ditch effort by Democrats to pass even a temporary extension surprised those on both sides of a debate that has raged for more than 15 years over whether to end what opponents term the “death tax”.
Lee Farris, senior organizer on estate tax policy for United for a Fair Economy, a Boston-based advocacy group lobbying for retention of the estate tax, said she hadn’t expected talks over a stopgap measure to collapse this week.
'I think it’s an outrage that with eight years notice, Congress couldn’t get its act together and prevent repeal of the estate tax,' Farris said.
The pledge to renew an estate tax retroactively presents both a legislative and a legal challenge, [...] [but] Farris said if Congress can resolve the issue quickly in 2010, the ramifications may be limited because most estates don’t file estate tax returns until about nine months after someone dies. [...]
For now, as of Jan. 1 the estate tax will give way to the capital gains tax when heirs sell bequeathed assets.
The tax, with a rate between 15 and 28 percent, would apply to estates in excess of $1.3 million and would be calculated on gains accrued since the asset was purchased. It would cover homes and land, stock certificates, collectibles such as art, and businesses."
Read the full article by Ryan J. Donmoyer on Bloomberg.com
"A group of the world's wealthiest individuals are lobbying the US Senate to introduce tougher estate tax rules. The protestors, including Microsoft's Bill Gates, fund manager John Vogle and Richard Rockefeller, are calling on the Senate to act before the holiday break to strengthen the US estate tax laws. [...]
According to a statement from national nonprofit United for a Fair Economy today, the billionaires say low estate tax will result in significant losses for the federal government.
This revenue supports the vital public structures and systems - transportation and energy infrastructure, education and healthcare, among others.
'In making the 2009 estate tax cut permanent, the House of Representatives would give a huge tax-break to the wealthiest 1% of Americans over ten years, at a time when economic inequality has skyrocketed,' said Lee Farris, UFE's estate tax policy coordinator.
Bill Gates said: 'No one accumulates a fortune without the help of our society's investments. How much wealth would exist without America's unique property rights protections, public infrastructure, and academic institutions? We should celebrate the estate tax as an 'economic opportunity recycling' programme. It's our turn to pass on the gift.' [...]
In Germany, a similar lobby group has been gaining prominence. The German initiative, the Vermögende für eine Vermögensabgabe (wealthy people in favour of a wealth tax), was launched last spring, according to UK newspaper The Times."
Read the full article in The Wealth Bulletin (London).
Estate Tax on the Radio
Below are radio news reports on the estate tax, featuring commentary from UFE staffers Mike Lapham and Lee Farris, and our partners, including Bill Gates, Sr., Vanguard founder John C. Bogle, and SEIU Secretary/Treasurer Anna Burger.
December 17, 2009
"Service Employees International Union (SEIU) Secretary-Treasurer Anna Burger says the tax affects very few estates, and the current terms are generous. Burger noted that a wealthy family with two children can pass on $3.5 million to each child tax-free. She puts that in perspective for the more than 99 percent of Americans who are not affected by the estate tax.
'That means that each child will receive more tax-free than the average worker in America would earn in two lifetimes. And that worker will be paying taxes on their earnings.'"
Listen to our 12/17/09 Maine radio story on Public News Service.
November 30, 2009
"With so many big-ticket items on the table, such as health-care reform and climate policy, it's easy for an issue like the estate tax to get lost in the shuffle. That's the tax paid on the estates of multi-millionaires when they die. But the devil is in the details, says Mike Lapham of United for a Fair Economy, a Boston-based nonprofit group. He says several powerful groups have been working to repeal the estate tax for quite some time and, according to Lapham, one of the biggest misconceptions about the tax such groups have perpetuated is that it affects everyone."
Listen to our 11/30/09 Maine radio story on Public News Service.
December 18, 2009
"A familiar name here in Washington, Bill Gates, Sr., says the estate tax is only fair. He believes the "richest of the rich" are in that position because they have benefitted from living in the U.S., where taxpayers fund more than $90 billion a year worth of research and technology.
'Clearly, the largest and most generous venture capitalist in the universe is Uncle Sam. And it's clear that the folks who have become wealthy because of significant social investments did not do it alone.'"
Listen to our 12/18/09 Washington radio story on Public News Service.
November 30, 2009
"They say you can't take it with you and, in December, Congress must decide how much estates should be taxed when someone dies. The federal estate tax expires at the end of this year.
It doesn't affect most people - only one in a hundred is wealthy enough for their estate to be taxed - but some of the super-rich are lobbying to eliminate it. Groups such as United for a Fair Economy (UFE) disagree; its Responsible Wealth Director, Mike Lapham, points out that the tax averages 17 percent of a multimillion dollar estate, and he believes paying it is the right thing to do."
Listen to our 11/30/09 Washington radio story on Public News Service.
December 17, 2009
"Senate Finance Committee Chair Max Baucus has called for keeping the estate tax in place, and he is being echoed by some of the richest families in the country this week, including Bill Gates, Sr. The Senate may vote Friday on closing the one-year gap in the tax that is looming for next year.
John Bogle, founder and retired CEO of The Vanguard Group and one of the "richest of the rich," is pulling for extending the tax for next year and beyond. Bogle explains that the way tax law works, most of his wealth has not yet been taxed, and it won't be taxed until his death. He also says he resents the fact that a few rich families are fighting the tax.
"For us, who owe these taxes, to think that we don't want to pay our fair share for the cost of running this nation, when our young citizens are dying in wars out there trying to protect democracy, seems to me quite outrageous."
Listen to our 12/17/09 Montana radio story on Public News Service.
November 30, 2009
"Death and taxes are on the docket for Congress in the next few weeks. The lawmakers need to bridge the one-year gap in the estate tax looming next year, and possibly decide what the tax should look like in the future. Montana Senator and Finance Committee Chair Max Baucus has called for keeping the tax, although some want to eliminate it.
Lee Farris, senior organizer with the non-profit group United for a Fair Economy, points out that the anti-estate tax campaign has been funded by a few super-wealthy families, including those who own Gallo Wines and Wal-Mart. She puts it in perspective under the current law. 'Married couples can pass on $7 million tax-free. If a person won $7 million in the lottery and then complained that it wasn't enough, I think we'd all call it ridiculous.'"
Listen to our 11/30/09 Montana radio story on Public News Service.
"Key Democrats predicted the federal estate tax will expire after Dec. 31 because an impasse among lawmakers will prevent an agreement on extending the current levy before Congress takes its holiday break.
The lawmakers said Congress would likely seek to restore it retroactively next year. [...] A temporary expiration would hand a victory to congressional Republicans who enacted legislation in 2001 to phase out what they call the “death tax.” It also would subject tens of thousands of heirs who otherwise wouldn’t owe taxes to capital gains rates if they liquidate inheritances. [...]
Unless Congress acts, the estate tax would be replaced next year by a capital-gains tax on all but the first $1.3 million in inherited assets, including homes, stock certificates, stamp collections and livestock.
Heirs who sell those assets would pay from 15 percent to 28 percent in taxes on any appreciation in value since the assets were acquired. Current law imposes capital-gains taxes only on any increase in value after the assets are bequeathed.
[Rep. Earl] Pomeroy [D-ND] said some 61,000 Americans would face taxes under the capital gains regime, versus about 6,000 estates that would face a tax under an extension of the current law. [...]
A prominent proponent of taxing large estates, Bill Gates Sr., father of Microsoft Corp. founder Bill Gates and co- chairman of the Bill and Melinda Gates Foundation, urged Congress to retain the tax.
“Society has a just claim on these fortunes,” Gates told reporters yesterday on a conference call organized by United for a Fair Economy, a Boston-based advocacy group in favor of keeping the estate tax."
Read the full article by Ryan J. Donmoyer on Bloomberg.com
"For most of the past decade, the House voted to repeal the estate tax. So, it’s worth a smile and a nod to see that the House finally recognizes the need for an estate tax. The not-so-good-news is that continuing 2009 law would increase the federal deficit by $234 billion over 10 years—that’s quite the generous tax giveaway to the massively wealthy. But don’t we have more pressing needs for that revenue? How about healthcare, clean energy, education, infrastructure, jobs, and deficit-reduction?"
Read the full op-ed by Lee Farris in The Oneida Daily Dispatch.
On January 26th, Oregon voters will be asked to affirm the state's revenue package, and fair taxation activists in the state are pushing hard for voter turnout to vote YES on Measures 66 and 67. If the measures are voted down, it would mean drastic cuts for state services and jobs.
If you are a resident of Oregon be sure to read up on these important measures and, most importantly, be sure to vote!
"Several wealthy people today added their voices to a campaign to get Congress to extend and strengthen the estate tax, calling it a key incentive for people to leave money to charity. [...]
The [press teleconference] was organized by United for a Fair Economy [...] The group is pushing Congress to act before its holiday recess to renew and increase the tax that applies to large estates when people die — which is set to expire at the end of the year.
The wealthy participants said the tax is a small price to pay to support government services like education and research that allow people to become prosperous in the United States. It also encourages philanthropy, they said, because people with large fortunes can make gifts to charity without paying taxes on them. [...]
[United for a Fair Economy] favors a proposal by Rep. Jim McDermott, Democrat of Washington, which would apply a 45-percent tax, with a $2-million exemption per spouse, and index the exemption to inflation. It would also tax assets above $5-million at 50 percent, and above $10-million at 55 percent.
Lee Farris, the group’s estate-tax policy coordinator, says extending the current law, rather than returning to the higher rates that are now set for 2011, would amount to a '$391-billion tax break to the wealthiest 1 percent of Americans over 10 years, at a time when economic inequality has skyrocketed.'
United for a Fair Economy proposes that Congress extend the current rate for one year, but strengthen the tax after that."
Read the full article in the Chronicle of Philanthropy.