Conservative bluster about the Bush Tax Cuts for the wealthy reminds Kevin Drum of conservative bluster about the estate tax. He harkens back to the heat of the estate tax debate under President Bush.

Back in the day, one of the key Republican arguments against the estate tax was that it forced hardworking, salt-of-the-earth children of small farmers to sell the family plot in order to pay their taxes after dad died. It was a sad story, but with one problem: no one could find even a single small farmer who had been forced to liquidate in order to satisfy Uncle Sam's voracious maw. Even the American Farm Bureau Federation was eventually forced to admit that it couldn't come up with a single example, and a few years later the Congressional Budget Office estimated that under the now-current exemption level, only a tiny handful of small farms were likely to owe any estate tax to begin with — and of those, only about a dozen lacked the assets to pay their taxes. And even those dozen had 14 years to pay the bill as long as the kids kept running the farm. In other words, the story was a fraud from beginning to end.

The same argument is still being made by the anti-tax lobby to smear the estate tax, and it is still nonsense. That's why we're still putting out the facts about family farms and the estate tax. The new variation to the nonsense is the claim that small business owners will bear the brunt of ending the Bush income tax cuts on the top tax bracket. Prompted by Senator Chuck Grassley's (R-IA) public dare, Drum takes that argument apart in four quick steps.

Step 1: The Brookings Tax Policy Center estimates that only 1.9% of small businesses are in the two top brackets that would be affected. That's a little better than the dozen small farms affected by the estate tax, but not by much.

Step 2: About half of that 1.9% aren't really small business owners at all. They're high-income investors who get part of their income from investments in small businesses. So we're down to about 1% of small businesses that would be affected.

Step 3: The top brackets are just that: brackets. When the top rate goes up, it doesn't affect your entire income, just the portion in the top bracket. So if the top rate goes back up from 35% to 39.6%, it only affects the portion of income above approximately $400,000. A small business owner making $500,000 would see an increase of about $5,000. This is a fairly modest amount for someone making a half million dollars, and anything higher than that is hardly a "small" business to begin with. And the marginal effect is even smaller for the second highest bracket.

Step 4: The Office of Management and Budget estimates that the 10-year cost of these upper-income tax cuts is $678 billion, the vast majority of which hits wealthy individuals, not small businesses no matter how you define them. That's a fair chunk of change for anyone concerned about the deficit.

So that's the case. Letting Bush's tax cuts for the rich expire affects only a tiny number of small businesses; it doesn't affect them very much; and it generates revenues of $678 billion. If the only thing you care about is keeping taxes low for rich people, you won't be convinced. For the rest of us, it's a no-brainer. [emphasis added]

The $678 billion dollar figure does not include additional tens of billions of dollars that will either be generated in revenue or added to the deficit based on what we decide to do with the estate tax this year. Remember, the estate tax was gutted by the same Bush tax cuts, and like the rest of the Bush tax cuts, the estate tax cuts are set to expire at the end of this year too.

There's some real big choices to make this year. Should we hand out billions of dollars in tax breaks to the richest of the rich, or should we generate some much needed revenue? Should we keep a few dollars in the pockets of millionaires and billionaires, or should we generate start to turn around the trend of growing economic inequality?

The Financial Reform bill has been passed by both houses of Congress and now awaits President Obama's signature. When the President signs his name, the new law will be the biggest improvement to regulation of the financial industry in generations. It's a big change with a lot to it, but reigning in Wall Street and the excesses of finance will not be accomplished with one new law alone. But for now, it's time to celebrate what truly is an historic victory.

Of the many good things in the final package, the new consumer protections may be the sweetest. The new Consumer Financial Protection Bureau made it through in a reasonably strong form, and has a chance to truly protect consumers from many of the abuses that plumped up bank profits and bonuses at the expense of the public. Members of UFE and our Responsible Wealth project deserve to be particularly proud for standing up for the consumer financial protection in this bill.

Chris Sturr at Dollars and Sense (a magazine you should subscribe to if you don't already) runs down some more details. He links to an excellent explanation of what's in the bill, what got cut out, and what never even had a chance.

Some more reactions:

• Shahien Nasiripour (who has also become a must read) teams with Ryan Grim at the Huffington Post for a wrap up on passage of financial reform.

• Ezra Klein highlights some of the positives.

• Simon Johnson is hard to please, but he sees some encouraging similarities to past regulatory efforts.

• And Kevin Drum made a good the case for the bill when it's passage was still, at least somewhat, in doubt.

"Times are tough for workers in the U.S. where a recession has a stranglehold on much of the economy, but life is perfectly rosy for those at the top.

The riches of the wealthiest North Americans grew by double digits in 2009, primarily from interest their money earned when it was invested in the stock market and elsewhere, according to a report by the Boston Consulting Group.

Millionaires in the U.S. and Canada saw their wealth increase 15 percent in 2009, to a total of 4.6 trillion dollars, the report found.

Worldwide, 11 million - or less than 1 percent of all households - were millionaires in 2009. They owned about 38 percent of the world's wealth or 111 trillion dollars, up from about 36 percent in 2008, according to Boston Consulting Group.

About 4.7 million millionaires live in the U.S., four percent of the population and more than anywhere else in the world. Japan, China, Britain and Germany followed the U.S. in the number of millionaires.

Their fortune is a stark contrast to the lives of more than 15 million people in the U.S. who are unemployed and searching for work, and the eight million more who are just getting by with a part-time job...More than two million more people were working prior to the recession but have now dropped out of the labour force. [...]

The recession isn't hitting those at the top as it has workers. In fact, many wealthy people benefited from the stock market's ups and downs, said Mike Lapham, director of the Responsible Wealth Project at United for a Fair Economy, an NGO in Boston.

'Folks at the top have a cushion, a disposable income to fall back on. Maybe their portfolios took a hit but they didn't lose their jobs and their homes. If they had losses, they can deduct them from their taxes,' Lapham told IPS. [...]"

Read the full column by Adrianne Appel on AlterNet.org (via Inter Press Service)

Representative Linda Sanchez (D-CA) introduced a new estate tax proposal in the House of Representatives. The specifics are very similar to the Responsible Estate Tax Act (S.3533) introduced in the Senate in late June.

It is a good bill. Representative Jim McDermott's Sensible Estate Tax Act (HR 2023) is still the best proposal in the House. It stays closest to the AFET guidelines for good estate tax reform. However, the release of matching proposals in the House and Senate from Sanchez and Sanders, looks like a sign that progressive lawmakers are serious about fighting for a strong estate tax.

Congress needs to get serious about taxes. With the Bush tax cuts expiring and conservatives returning to their nonsensical rhetoric, the fight for progressive taxation is on.

The good news is that the American public strongly favors higher taxes on the rich, poll afterpoll after poll (pdf, page 16) backs up that fact. The estate tax, of course, is paid exclusively by millionaires, which is exactly the kind of tax the public wants. And, we're rallying more support for our nation's most progressive tax. 

Stay tuned for more news coming out of our press conference on July 21st.

Good stuff from Sarabeth Guthberg at 1115.org (via Steve Benen) taking apart Senator Kyl (R-AZ) for his most recent bit of idiocy about taxes. The second ranking Republican in the Senate told the world that he believes there is no reason to offset the cost of tax cuts. His comments drew a lot of attention, and so he tried to explain himself. Sarabeth goes to town on his clarification.

"First of all, o confused eminent personage of the Republican persuasion, the question wasn’t how to offset increased spending, the question was how to offset reduced tax collections.

Secondly, increased spending gets offset by reduced savings? If the government spends more and saves less, that’s a deficit-neutral plan? This entirely backward “reasoning” explains a hell of a bloody lot, doesn’t it, about why the deficit and the national debt got to where it is?

Thirdly, even if the master plan is to shrink government — in fact, especially if the master plan is to shrink government — the budget effect of a tax cut has to be offset. Kyl doesn’t even seem to realize that the deficit-shrinking tool kit includes spending cuts. Or that, if you want to shrink the government, it’s not enough to cut taxes, you have to bloody well cut spending too. Then, and only then, does the government shrink. And — this will probably come as a very rude shock to the guy, so as an act of Christian charity, we should make sure that Jon Kyl is sitting down when this is broken to him — the spending cut offsets the tax cut, to make it deficit-neutral."

Well said.

Of course, this is nothing new for Kyl who routinely sponsors horrible estate tax legislation and just a few months back tried hanging the unemployed out to dry to get his way. But the problem goes deeper than Kyl. Ezra Klein gets sad by paying attention to Mitch McConnel (R-KY) and finding that the problem is endemic to Republican leadership in the Senate.

For the record, that's the two highest ranking Senate Republicans (and in McConnel's words, "the view of virtually every Republican") denying the existence of facts about taxes.

Photo credit: Hazboy

Long before I moved to the Boston area in 1977 I had no love for the NY Yankees. Despite the fact that I grew up just a few blocks from Yankee Stadium, my family divided it’s loyalties between the Brooklyn Dodgers — the first team to break baseball’s color barrier — and the Giants (we would walk to the Polo Grounds to watch Willie Mays’ show off his amazing talents. To our working class sensibilities, the Yankees represented the ruling class of baseball, dominating the sport with the largest team payroll year after year, and displaying arrogance both on and off the diamond.

George Steinbrenner, who inherited his wealth from his father’s shipbuilding company and bought the team from CBS in the early 1970s with money from the family business, raised the level of pin-stripe hubris to new heights. In his first 17 seasons as owner, Steinbrenner hired and fired 17 managers; skipper Billy Martin was fired five times! His temper tantrums were legendary and his willingness to doggedly pursue free agents — the Kansas City Athletics were jokingly referred to as the Yankees’ farm team — ensured a steady stream of stars. Off the field, George’s antics included illegal contributions to Richard Nixon’s presidential campaign. Apparently, Steinbrenner had an affinity for employing seedy characters to bring down one’s enemies: he once hired gambler Howie Spiro to find dirt on on Dave Winfield, his own player, during contract negotiations.

While the Wall Street Journal eulogized Steinbrenner, praising his success in turning the Yankees “into a financial powerhouse,” they declined to mention that the wealthiest team in baseball received $362 million from New York City to build the lavish new stadium (New York State Assemblyman Richard L. Brodsky, D-Westchester, said the taxpayers' tab for Yankee Stadium eventually will total $4 billion, including potential property tax revenue over 40 years given up in the deal). The promised benefits to the neighborhood that, due to the construction, lost their ball fields and parks — where I played as a kid — have still not been replaced as promised.

And, oh yes, George Steinbrenner died with an estate worth about $1.3 billion, not a penny of which will return to public coffers through an estate tax. Due to the tax cut package George Bush signed into law in 2001, the Estate Tax was phased out step-by-step until January 1, 2010 when it ceased to exist all together. George is the fourth billionaire in the US to die so far this year leaving all their vast wealth to their heirs and designees alone.

Fortunately, the tax cut law has a sunset provision which means that on January 1, 2011, the estate tax will be restored to its 2001 level. Of course, the folks who think the Great Recession is no reason not to push through even more tax cuts for the wealthy are fighting the sunset tooth and nail. So if like me, you think George born-with-a-silver-spoon-in-his-mouth Steinbrenner will not appear on your list of the top 10 human beings who passed in 2010, you might consider contacting your Senators and Representatives and telling them to restore a responsible estate tax in “honor” of the Yankee capitalist.

After a 19-day protest, the Student Immigrant Movement (SIM) and allied organizations celebrated a victory in their campaign, Mass Hope 2010, for the Massachusetts legislature to overturn a budget amendment laden with anti-immigrant language.

For those 19 days, SIM members staged a 24/7 vigil in front of the State House, risking arrest by local law enforcement, as a stand in solidarity with immigrants, both documented and undocumented, in Massachusetts.

SIM initiated Mass Hope in late May when the state legislature's conference committee released its budget proposal for the new fiscal year, which was laden with provisions  that would have been an affront to the rights of immigrants and children of immigrants with regard to employment, housing, education and public services.

The anti-immigrant legislation, amendment 172.1, was not only a threat to immigrants' civil liberties, but would have also been costly for taxpayers and highly inconvenient for a state government that's already stretched thin by the ongoing recession.

Amendment 172.1 would have exemplified government at its worst. Its wasteful and punitive measures were neglectful of its impacts on the families of undocumented immigrants, and Massachusetts' immigrant communities as a whole. And, it would have done absolutely nothing to address the root causes of unlawful migration to the US.

SIM's mobilization succeeded in getting the conference committee to take their proposal back to the drawing board. The outcome was, in large part, a win for immigrant rights. While most of the proposed new restrictions and regulations were struck down, the final budget proposal contained provisions that codified existing practices and regulations as law.

The Massachusetts Immigrant and Refugee Coalition (MIRA) expressed mixed feelings about the final budget. In the process of drafting their final budget proposal, the conference committee eliminated a program that has been providing state-subsidized healthcare for nearly 30,000 documented immigrants, raising concerns for the physical and financial well being of thousands of men, women and children. Another concern MIRA has conveyed is the closed-door message the immigrant-related codifications send to future immigrants to Massachusetts, which has come to be known as one of the most immigrant-friendly states in the US.

The budget is now headed to the Governor's desk for review. Although most involved in Mass Hope are content with the conference committee's decisions, MIRA still cautions Gov. Deval Patrick to carefully consider the implications of the immigrant-related provisions they've deemed as problematic.

The vigil has officially ended, but SIM and other activists will keep up the pressure on their state legislators to defend and expand the basic rights of immigrants in Massachusetts. UFE is proud to have participated in Mass Hope. UFE staffers participated in the vigil, in rallies, provided support, resources and a space of community for the campaign planners, protesters and others involved.

How do we make the case for government, the economy, and federal aid? Today, during day two of the National Coordinating Conference for the Campaign for Federal Aid to Communities, we'll hear from Patrick Bresette from Demos about how to talk taxes to generate support.

<a href="http://www.coveritlive.com/mobile.php/option=com_mobile/task=viewaltcast/altcast_code=24c275e8f2" mce_href="http://www.coveritlive.com/mobile.php/option=com_mobile/task=viewaltcast/altcast_code=24c275e8f2" >Live Blogging: Talking Taxes</a>

UFE's Shannon Moriarty is live-blogging from the National Coordinating Conference for the Campaign for Federal Aid to Communities on July 13th and 14th. Follow along as state organizers develop a national strategy for demanding federal aid for jobs and essential public goods and services. 

What do people think about jobs, the recovery, and banks and how can organizers speak to populist concerns during the upcoming election? During session two of the National Coordinating Conference for the Campaign for Federal Aid to Communities, we'll hear from pollsters and union representatives about the public opinion landscape and how activists can shape their messaging this electoral season.

<a href="http://www.coveritlive.com/mobile.php/option=com_mobile/task=viewaltcast/altcast_code=42d1b29600" mce_href="http://www.coveritlive.com/mobile.php/option=com_mobile/task=viewaltcast/altcast_code=42d1b29600" >Live-Blogging: Understanding the Political Landscape</a>

UFE's Shannon Moriarty is live-blogging from the National Coordinating Conference for the Campaign for Federal Aid to Communities on July 13th and 14th. Follow along as state organizers develop a national strategy for demanding federal aid for jobs and essential public goods and services.  

Ranchers demand a fix for the estate tax

With less than 30 legislative days left on the congressional calendar, the National Cattlemen’s Beef Association on Tuesday warned lawmakers that time is running out to fix the estate tax.

The tax is repealed, but barring congressional action will return next year to the pre-2001 levels that hit estates worth more than $1 million with a 55 percent tax.

Steve Foglesong, the cattle association’s president, warned that the reinstatement of the tax would force some ranchers and farmers to close their operations.

“They’re in essence handing down a death sentence to family-owned farming and ranching operations,” he said in prepared remarks. “Taxing family farmers and ranchers out of business will have serious impacts on all Americans, not just in our rural communities.”  

Read the full blog post by Jay Hefflin on TheHill.com

"Former Treasury Secretary Robert Rubin will join several others in calling on Congress to reinstate the estate tax before the August recess. 

The July 21 event will be hosted by United for a Fair Economy, which has been fighting to preserve the estate tax since 1999.

Rubin is expected to discuss his reasons for supporting a permanent estate tax fix. [...]"

Read the full blog post by Jay Hefflin on TheHill.com

UFE's Shannon Moriarty will be live-blogging from the National Coordinating Conference for the Campaign for Federal Aid to Communities on July 13th and 14th. Follow along as state organizers develop a national strategy for demanding federal aid for jobs and essential public goods and services.

Live-blog coverage starts on Tuesday, July 13th at 1:30pm. The first session kicks off with a discussion of key issues facing the federal campaign, including a recession retrospective, federal legislation, and the 2010 fall elections.

<a href="http://www.coveritlive.com/mobile.php/option=com_mobile/task=viewaltcast/altcast_code=e8458f4f1f" mce_href="http://www.coveritlive.com/mobile.php/option=com_mobile/task=viewaltcast/altcast_code=e8458f4f1f" >Key Issues in the Federal Aid to Communities Campaign</a>

Imagine thousands of people meeting, mingling, and marching peacefully through your city streets for nearly a week. Last month, a racially, ethnically and geographically diverse crowd of more than 15,000 people vitalized the epic, but destitute, city of Detroit–the epicenter of the Great Recession in the US.

The second US Social Forum (USSF)—the first was in Atlanta in June 2007—was inspired by the 2001 World Social Forum in Brazil. The 2001 gathering was an international attempt to pose and discuss alternative economic models and rules to those discussed at the corporate-dominated World Economic Forum in Switzerland.

Four UFE staff members, as well as several board members, volunteers, and supporters, led popular economics education workshops, participated in planning meetings, marched in demonstration, attended plenaries, networked, and enjoyed cultural activities.  Our message about the scope of economic inequality and our method of engaging people in dialogue about its consequences and what to do about it, were very well-received. New relationships were forged, old ones strengthened, and a great deal of enthusiasm for collaboration was generated.

But, the significance of the Forum goes way beyond these specific outcomes for UFE. What we witnessed (and participated in) was a key step forward in building a powerful social and economic justice movement that will realize the USSF theme: "Another World is Possible, Another US is Necessary."

Labor & racial justice activist Bill Fletcher provided his take, “...[the USSF] was the antithesis of the Tea Party movement. Instead of the fear, ignorance and hatred that emanates from the Tea Partiers, here there was a sense of optimism.” The  provides a vibrant and safe space for exchanges of ideologies and strategies. While we still struggle to construct a common narrative that explains how we got here and a common vision of where we want to go, the willingness to engage open-mindedly in the hard work to build such consciousness, was on display throughout the Forum.

“For five days in Detroit, an incredibly diverse group of progressives became a community,” said Steve Schnapp, UFE's senior education coordinator. “We are making the road as we walk. But, more importantly, we do so in ways that draw upon our unique perspectives and celebrate our unique gifts. This feeling of solidarity inspires us to continue our important work. A world where power and wealth are not concentrated in the hands of a few is indeed possible!”

A year ago, UFE traversed the northern border of the US to Ottawa, Ontario for a visit with the largest public workers union in Canada, the Public Service Alliance of Canada (PSAC). We were invited by PSAC’s National Education Program Officer, Victoria Gibb-Carsley, who once participated in a UFE Training of Trainers Institute.

Victoria found UFE's use of popular education methodology to be highly effective, and decided it was just what PSAC needed in developing a new leadership training program. Today, PSAC's program is acclaimed as one of the most comprehensive and powerful in Canada's labor movement.

This week, Victoria shared with us the most recent outcome of our collaboration–a project that highlights the lasting impacts of UFE's work to raise awareness of economic inequality, and exemplifies the proliferative nature of a clear call for justice.

At our workshop in Ottawa last year, I shared a short video, produced by UFE volunteer, Matt Chana, called the "BBs of Wealth," which provides an illustration of wealth inequality in the US. The concept of our "BBs" video resonated strongly with the folks at PSAC, and inspired them to produce one of their own to share with their membership and use in their trainings.

PSAC's final product, “Pennies of Prosperity,” is a chilling representation of the vast Canadian wealth divide. Their video is another entry in the toolbox of educational materials that tells the story of inequality. And, it will undoubtedly galvanize many more people to become engaged in efforts for progressive social change.

Urge Your Senators to Co-Sponsor The Responsible Estate Tax Act, S.3533

Dear Friend of United for a Fair Economy,

Senators Sanders (I-VT), Harkin (D-IA), and Whitehouse (D-RI) have just proposed a strong, fair, and fiscally responsible estate tax bill. The Responsible Estate Tax Act (outlined below) would make the wealthy pay their fair share, while ensuring that the estate tax will not affect the middle class, small businesses, or family farmers. Call your Senators now and urge them to co-sponsor the Sanders/Harkin/Whitehouse Responsible Estate Tax Act S.3533 so that we can begin the path towards a fairer and more responsible tax system.

1. Call toll-free 800-830-5738 or 202-224-3121 (Capitol switchboard) and ask to be connected to your two US Senators, or call their direct lines. 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 am calling to urge the Senator to co-sponsor S.3533 the Sanders/Harkin/Whitehouse Responsible Estate Tax Act .
• If we are going to get out of this recession, we need to end the Bush tax cuts for the wealthy. It’s time to restore the progressive tax system that made our country strong, beginning with a robust estate tax. The Sanders/Harkin/Whitehouse The Responsible Estate Tax Act is an important step on the road to an economic recovery that benefits all Americans.
• This bill is a common sense solution. It balances the desire to protect small businesses and farms with the assurance that the super-wealthy give back and support the country that made their prosperity possible.

Email me (don't reply to this email), Lee Farris, at [email protected] 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.

2. Write a letter to the editor. Find the editor's email from the Contact the Media box. Use the talking points above and connect your letter to any story about taxes or deficits. Please send me a copy of the letter you submit.

3. Share this alert with everyone you know. Please forward this email, 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
[email protected]

THE SANDERS/HARKIN/WHITEHOUSE RESPONSIBLE ESTATE TAX ACT, S.3533

• Exempts the first $3.5 million of an estate from federal taxation ($7 million for couples), the same exemption that existed in 2009. Doing this would mean that 99.75 percent of all estates would be exempted from the federal estate tax in 2011 alone.
• Includes a progressive rate structure so that the super-wealthy pay more. The rate for the value of the estate above $3.5 million and below $10 million would be 45 percent, the same as the 2009 level. The rate on the value of estates above $10 million and below $50 million would be 50 percent, and the rate on the value of estates above $50 million would be 55 percent.
• Includes a billionaire's surtax of 10 percent. The bill also imposes a 10 percent surtax on the value of an estate above $500 million ($1 billion for couples). According to Forbes Magazine, there are only 403 billionaires in the United States with a collective net worth of $1.3 trillion. Clearly, the heirs to these multi-billion fortunes should be paying a higher estate tax rate than others.
• Closes all of the estate and gift tax loopholes requested in President Obama's Fiscal Year 2011 budget. These loophole closers include requiring consistent valuation for transfer and income tax purposes; a modification of rules on valuation discounts; and a required 10-year minimum term for Grantor Retained Annuity Trusts (GRATS). OMB has estimated that closing these loopholes that benefit the super-wealthy, would raise at least $23.7 billion in revenue over 10 years.
• Protects family farmers by allowing them to lower the value of their farmland by up to $3 million for estate tax purposes. Under current law, the value of farmland can be reduced up to $1 million for estate tax purposes under 2032(a) of the Internal Revenue Code (Special Use Valuation). The bill increases this level to $3 million and indexes it to inflation.
• Benefits farmers and other landowners by providing estate tax relief for conservation easements. The bill provides tax relief to farmers and other landowners by amending estate tax rules for conservation easements through an increase in the maximum exclusion amount to $2 million and increasing the base percentage to 60 percent.

This legislation would exempt over 99.7% of Americans from paying any estate tax whatsoever, while ensuring that the wealthiest Americans in our country pay their fair share.

BACKGROUND

The future of the federal estate tax is still up in the air. Due to the Bush Tax Cuts, there is no estate tax in 2010. However, it will return in 2011 with a $1 million exemption and a 55% rate. It is likely that the Senate will act on the estate tax by the end of the year. This is creating a pressure cooker of debate over what the estate tax should look like in 2011.

President Obama proposed keeping the 2009 estate tax, with a $3.5 million exemption per spouse and 45% rate. That loses about half as much revenue as full repeal.

As a stronger alternative to the Obama proposal, UFE has supported H.R. 2023, The Sensible Estate Tax Act, sponsored by Rep. McDermott, (D-WA)., which would set the exemption level at $2 million per spouse, and establish progressive tax rates of 45% to 55%. Because the McDermott bill has not been introduced in the Senate, UFE also supports the Sanders/Harkin/Whitehouse Responsible Estate Tax Act.

Senators Lincoln (D-AR) and Kyl (R-AZ) proposed a dangerously weak estate tax that includes a $5 million dollar exemption per individual and a 35% tax rate. This proposal would cost our cash strapped nation additional tens of billions of dollars in the coming years and would do so to the exclusive benefit of multi-millionaires.

America quite literally can’t afford the kind of estate tax that Lincoln and Kyl propose. Senators Sanders, Harkin, and Whitehouse have proposed a viable solution. Call your Senators as soon as possible and urge them to co-sponsor S.3533 the Sanders/Harkin/Whitehouse Responsible Estate Tax Act and help bring fair taxation back to America!

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 both your US Senators, or call their direct lines.

Senators Sanders (I-VT), Harkin (D-IA), and Whitehouse (D-RI) got together to introduce a reasonably progressive estate tax proposal in the Senate. The Responsible Estate Tax Act (S.3533) is the first decent estate tax bill has seen the light of day in the upper chamber in quite a while. See our action alert in support here, and call your Senator to get them on board with this positive step for the estate tax.

On the major points, exemption and rates, the bill is mixed. The exemption would be set at $3.5 million ($7 million per couple), which is a bit higher than ideal but is the same as President Obama's proposal and the exemption in the bill passed by the House last year. S.3533 does quite a bit better than the Obama / House approved plan on the rates. The rates, in fact, are what makes the bill truly worthy of support. The bill includes a progressive rate structure from 45-55% percent and an additional surtax on estates valued over $500 million ($1 billion per couple). The progressive rates in this bill are genuinely praiseworthy.

Under the Responsible Estate Tax Act 99.7% of Americans would owe no estate tax at all.

Some more detail:

• Exempts the first $3.5 million of an estate from federal taxation ($7 million for couples), the same exemption that existed in 2009. Doing this would mean that 99.75 percent of all estates would be exempted from the federal estate tax in 2011 alone.
• Includes a progressive rate structure so that the super-wealthy pay more. The rate for the value of the estate above $3.5 million and below $10 million would be 45 percent, the same as the 2009 level. The rate on the value of estates above $10 million and below $50 million would be 50 percent, and the rate on the value of estates above $50 million would be 55 percent.
• Includes a billionaire's surtax of 10 percent. The bill also imposes a 10 percent surtax on the value of an estate above $500 million ($1 billion for couples). According to Forbes Magazine, there are only 403 billionaires in the United States with a collective net worth of $1.3 trillion. Clearly, the heirs to these multi-billion fortunes should be paying a higher estate tax rate than others.
• Closes all of the estate and gift tax loopholes requested in President Obama's Fiscal Year 2011 budget.These loophole closers include requiring consistent valuation for transfer and income tax purposes; a modification of rules on valuation discounts; and a required 10-year minimum term for Grantor Retained Annuity Trusts (GRATS). OMB has estimated that closing these loopholes that benefit the super-wealthy, would raise at least $23.7 billion in revenue over 10 years.
• Protects family farmers by allowing them to lower the value of their farmland by up to $3 million for estate tax purposes. Under current law, the value of farmland can be reduced up to $1 million for estate tax purposes under 2032(a) of the Internal Revenue Code (Special Use Valuation). The bill increases this level to $3 million and indexes it to inflation.
• Benefits farmers and other landowners by providing estate tax relief for conservation easements. The bill provides tax relief to farmers and other landowners by amending estate tax rules for conservation easements through an increase in the maximum exclusion amount to $2 million and increasing the base percentage to 60 percent.

The government needs to generate a certain amount of revenue in taxes to fund important public services. The estate tax goes a long way toward generating this revenue. And, explains UFE's Estate Tax Organizer Lee Farris, "If the estate tax goes away altogether, the responsibility for those taxes will be shifted onto middle class people." This hardly seems fair when, according to Farris, "A family could leave $7 million tax-free to their kids, which is more than a median income worker could earn in two lifetimes."

To listen to Lee's full interview with Jeff Santos on Revolution Boston, click here (MP3).

Oh, thank goodness we, the taxpaying US citizenry, including the poor, helpless business-owning women, African Americans and "other minorities," have the courageous William Beach of the Heritage Foundation to speak on our behalf about matters of the economy. In an Illinois Business Journal op-ed debate this month, UFE's Lee Farris represented the pro-estate tax position and Beach spoke from the opposing camp.

Beach lists seven reasons to repeal the so-called "death tax," all of which are painfully unsubstantiated. Unfortunately, I only have a time to blast away at a few of his more startlingly ridiculous points.

• The estate tax discourages savings and investment. Okay, we're not talking about the low- and middle-income majority of Americans. Those affected by the estate tax are a very tiny and very wealthy sliver (less than a single percent) of the population, to whom savings and investment are not as much the practical concerns they might be for everyone else.

• The estate tax undermines job creation. Sadly, even in the absence of supporting evidence for this claim, Beach attempts to qualify it with this: "These numbers do not appear in employment statistics because the investments that would have created these jobs are never made." Umm...okay. But, I don't recall George W. Bush's $2.5 trillion tax break bonanza for the wealthiest 5% (of which repeated cuts to the estate tax were a part) doing much for job creation. Read the news much, Mr. Beach?

• The estate tax contradict the central promise of American life: wealth creation. Economic stability is important, but is wealth creation really "the central promise" of living in this country? All this time, I've completely missed that "Life, Liberty and the pursuit of Happiness" was just a long-winded way to say, "making money." I feel cheated for having thought the phrase referred to human rights and a deeper-than-monetary sense of enrichment. Silly me.

Is the Heritage Foundation even trying anymore? Or have enough of us just been politically brain-fried enough to buy into even the most pathetic of attempts to garner support for elitist causes?