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.


Email me, 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.

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
[email protected]




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!

Donate to UFE


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Black Unemployment: A "Canary in a Coal Mine"

"The latest employment figures sadly unsurprising: with about 35 percent of black men aged 16 to 24 unemployed, the epidemic of joblessness in Black America encapsulates a nationwide crisis. Although high unemployment and deep racial disparities are nothing new, the depth and length of the recession has prompted progressive economists and community groups to warnof an impending "social catastrophe."

The Economic Policy Institute, a progressive think tank, has outlined the racial and ethnic dimensions of the crisis, noting that the mainstream statistics reflect only part of the problem:

[...] Altogether, 17.5% of the labor force is underemployed—more than 27 million Americans, including one in four minority workers. [...] we can expect a third of the work force, and 40% of workers of color, to be unemployed or underemployed at some point over the next year.

NAACP President Ben Jealous said in a recent joint statement by civil rights groups, 'Black people in the U.S. are the canaries in the coal mine... What we get tends to hit everybody later.'

A deep recession would see median U.S. family income decline by 4% and Black income decrease by 6%. Thirty-three percent of Blacks and 41% of Latinos would be in danger of falling out of the middle class into poverty compared to 25% nationally.

Of course, there are reasons to focus on the black unemployment crisis other than what it might portend for white unemployment.The figures spell out how systemic inequality is woven into the fiber of the economy. United for a Fair Economy's research on the racial wealth divide depicts a chronically skewed distribution of opportunity: poverty rates among blacks and Latinos is more than double that for whites, and even among the so-called middle class, economic stability is eroding faster for people of color."

Read the full article on or on the RaceWire blog.

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State Tax News: TABOR Gets Trounced in 2009

TABOR Gets Trounced in 2009

By Karen Kraut, Coordinator, Tax Fairness Organizing Collaborative

Voters in Maine and Washington state in November soundly rejected a ballot initiative that is central to the right wing’s anti-tax, anti-government agenda.

The policy, known deceptively as TABOR (Taxpayer Bill of Rights), seeks to hamstring state and local government’s ability to maintain and invest in the quality public services residents need and want.

Colorado was the first to adopt a TABOR constitutional amendment in 1992. TABOR’s tax and spending limits greatly contributed to significant deterioration of public services. Between 1992 and 2001, Colorado’s K-12 spending as a share of personal income went from ranking 35th to 49th in the nation. Colorado’s problems were so severe that, in 2005, voters temporarily repealed TABOR [see this brief] to restore the state’s weakened public services and infrastructure. Colorado became the poster child for campaigns against TABOR.

Despite the destructive consequences of TABOR, anti-tax activists have attempted to export this failed policy [see p. 3 of this report] to other states throughout the nation over the last many years. However, through rigorous education and organizing, progressive coalitions have defeated TABOR, in increasing percentages. In the process, they deepened people’s understanding of the essential role government and taxation play in supporting the common good and the public services we so highly value.

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In Favor of a Strong Estate Tax

Some anti-estate tax organizations are still working to gut the tax in the coming year. UFE board member Bill Creighton responds:

"The wealthy share a responsibility to America to pay taxes, and many wealthy people like me support the estate tax because we realize there can be no private wealth without public resources. It’s time for Congress to do what’s right and establish a strong estate tax starting in 2010."

Read the full debate online in BusinessWeek.

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Korean Researcher Recognizes Responsible Wealth's Support of Progressive Taxes

"[T]he way the property tax works is that the share collected by a district is to be used by that district. Among the property taxes assessed in Seoul for this year, the difference between the highest, the Gangnam district, and the lowest was a factor of about 15. Within such a structure, the kindergartens, schools and public health centers in a neighborhood are inevitably better the higher the land and housing values.

This calls to mind the group Responsible Wealth, which was one of the most vociferous opponents of former U.S. President George W. Bush’s push to abolish the inheritance tax. Its members included some of the wealthiest people in the world [...] In other words, a group of billionaires got together to cry, 'Don’t create a new tax system to benefit us.' It is of course important to donate the money you earn to good causes, but is this not a more fundamental form of noblesse oblige?"

Read the full article online in The Hankyoreh.

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Change Wall Street Can Believe In

"Wall Street is...[t]aking control with borrowed money, stripping assets, slashing jobs and cashing out.

Taxpayer bailouts saved Wall Street from choking on its own greed. Now, as the Wall Street Journal reports, 'Major U.S. banks and securities firms are on pace to pay their employees about $140 billion this year...' [which is] more than the combined budgets of the U.S. Departments of Commerce, Education, Energy, Housing and Urban Development, the National Science Foundation and the Environmental Protection Agency. [...]

The government heavily subsidizes the megabanks, but it's the small banks that provide higher savings interest, lower fees, lower loan and credit card rates, and do much of the lending to small business, who in turn create most new jobs.

Behind their Main Street rhetoric, Congress and the Obama administration have so far been the change Wall Street can believe in. The administration and Federal Reserve are loaded with revolving door Wall Streeters and their proteges. Campaign donors and lobbyists are working Congress to minimize and distort reform."

Read the full article in the Athens Banner-Herald online.

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Lobbying for the Estate Tax

"Liberal advocacy groups are getting behind a bill authored by Rep. Jim McDermott (D-Wash.) that would keep the tax in place at a lower exemption rate for estates than would legislation favored by lobbyists for farmers and small businesses.

Lee Farris, the senior organizer for estate tax policy for United for a Fair Economy, said her group supports the McDermott bill. 

Farris said “it is a very different ballgame since Bush first came into the office.”

“We have just spent a huge amount bailing out Wall Street,” Farris said. “Now, it would be a lousy time to send even more money to the wealthy.” Other organizations, such as Citizens for Tax Justice and Results, an anti-poverty group, are also behind McDermott’s bill.

While the estate tax would lapse in 2010, it would return the following year to what it was before the Bush administration passed its first round of tax cuts in 2001 — a tax rate of 55 percent and an exemption for those with assets valued at $1 million or below at the time of their death. Current law has the tax rate at 45 percent and those with assets valued at or below $3.5 million earning an exemption.

If passed before Congress leaves this year, McDermott’s bill would permanently set up a $2 million exemption level and progressive tax rates for assets valued higher than that level. Farris believes the bill would yield the most government revenue, which could be used for healthcare reform and other federal programs."

Read the full article at The Hill online.

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UFE Workshop Inspires New Forum for Social Justice

Read and article about the forum on

Visit the All Souls Unitarian Universalist Church website to learn more.

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Estate Tax Update

Davis Sponsors Estate Tax Measure, But With Low Profile

By Peter Cohn

Running for statewide office can often create nuanced positions, and the estate tax appears to be one of those issues for Alabama Democratic Rep. Artur Davis, who is running for governor.

On Friday, a bipartisan House coalition announced they had introduced legislation to gradually cut the estate tax from its current 45 percent rate to 35 percent, as well as phase in a higher exemption from the tax, to $5 million per person from the current $3.5 million.

Davis was among the original sponsors. But he declined to tout his involvement in a joint release issued by the bill's backers, which was not lost on Republicans.

"I am sure Davis' run for the governor's mansion in Alabama factored into his team's decision, but why he wouldn't want to promote bipartisan legislation that helps small businesses and farmers keep more of their money is beyond me," one GOP aide said.

The lead Democratic co-sponsor is Rep. Shelley Berkley of Nevada, a longtime opponent of the estate tax who has consistently supported its repeal. Republican co-sponsors are Reps. Kevin Brady of Texas and Devin Nunes of California.

The bill represents a compromise between estate tax foes who have long sought full repeal, and a permanent extension at the 2009 rate sought by President Obama and Democratic leaders in Congress.

Davis has opposed efforts to repeal the tax in the past, and in 2006, he voted to strip a provision from a larger tax and minimum-wage bill that stopped short of full repeal but would have cut the estate tax more deeply than is now contemplated.

Recognizing that full repeal is a non-starter in Democratic-controlled Washington, longtime estate tax opponents such as the National Federation of Independent Business and American Farm Bureau Federation have thrown their weight behind the Berkley-Brady effort. The measure is similar to a bipartisan Senate proposal from Senate Agriculture Chairwoman Blanche Lincoln and Minority Whip Kyl.

But progressive groups and unions oppose the bill as a sop to the wealthy, and are urging Congress to let the estate tax go back to the pre-2001 rate of 55 percent, with an exemption of only $1 million, as scheduled in 2011. Even Obama's proposal to keep the current estate tax would cost $500 billion more over the 10 years beginning in 2011 than reverting back to the Clinton-era rate, said Lee Farris, senior organizer on estate tax policy at United for a Fair Economy.

Davis' spokeswoman Addie Whisenant said the lawmaker "has consistently supported reducing the estate tax burden that will hit certain families after 2011." She said Davis has opposed efforts to further cut the tax since they would have added too much to the deficit.

The new bipartisan bill, Whisenant said, "will prevent families who may have suffered substantial losses in the stock market and in their 401(k)s from the extra burden of a huge tax hike in the next few years." She added that Davis decided not to be on the joint release issued by Berkley, Brady and Nunes "because we wanted to focus our efforts on local press as opposed to national press."

Regardless of the group's efforts, they are not expected to get a vote on their bill. The House next week will take up a permanent extension of the estate tax at 2009 rates, at a $233.6 billion cost. The measure is expected to go straight to the floor without a vote in the Ways and Means Committee, on which Berkley, Davis, Brady and Nunes sit.

The Senate is not expected to pass the bill, however, and Democrats are likely to fall back later in the year on a simple one-year extension of the 2009 estate tax rate.

That outcome is fine with Farris, who noted that will punt the long-term question into next year, when Congress is faced with whether and how to extend all of the 2001 and 2003 tax cuts. With lawmakers staring at a more-than-trillion-dollar deficit, at that point "the estate tax will look like a good place to raise revenue" and negotiate a higher rate and lower exemption than the 2009 estate tax, she said.

"It's not going to be a good time to pass a tax cut for a few super-wealthy families, and maybe we'll be able to get back to more broadly shared prosperity and begin to rebuild the middle class," Farris said, adding: "After Wall Street wrecked the economy and Washington bailed out the banks, it would be crazy to weaken the estate tax and give away all that money to the super-wealthy."

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Press Release: Reports of Pay Czar's 'Heavy Hammer' on Wall Street Exaggerated

"Available for interview requests:

SARAH ANDERSON, who has spent the last 16 years analyzing CEO pay at the Institute for Policy Studies, said today: 'Mr. Feinberg had a narrow mandate, but he still could have played hardball. He could have told these firms they wouldn't get another taxpayer dime unless they renegotiated their executive pay pacts.'

CHUCK COLLINS, senior scholar at the Institute for Policy Studies, co-founder of Wealth for the Common Good and co-author of America's Bailout Barons, said: 'Feinberg has been spending his time trying to reach a 'consensus' on CEO pay with the firms that crashed our economy. He ought to be speaking to the average Americans our economy has crashed down upon.'

SAM PIZZIGATI, associate fellow at the Institute for Policy Studies, author of the online newsletter Too Much and co-author of America's Bailout Barons, said: 'Feinberg's preferred 'solution' to our executive pay problems, substituting stock for cash in executive pay packages, would have done little to prevent the subprime carnage if put in place 10 years ago.'

MIKE LAPHAM, project director of Responsible Wealth at United for a Fair Economy, said: 'The financial collapse and the government's response make it clear that the financial service sector is not just playing risky casino games with their own money - they're playing with everyone's money. When they bet the house and lose, we all lose. Extreme pay and short-term reward structures lead to risky behaviors. We need much stronger regulation and oversight of executive compensation.'"

View the full press release on

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Washington Unemployment Up in September

"There’s no mistaking what Washington’s seasonally adjusted, “official” unemployment numbers for September show; the recession is far from over at the level that most working class Americans feel it – jobs. The state’s “official” unemployment rate increased to an estimated 9.3 percent in September, up from a revised rate of 9 percent in August [...] Among Americans of color, who traditonaly experience higher unemployment rates in good times and bad, the current recession is particularly stressful."

Read the full article in the Sky Valley Chronicle.

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Wealthy Germans launch petition for higher taxes

"Some rich Germans have launched a web petition to call for the resumption of a wealth tax to help the country bounce back from an economic crisis, because, as one said, he had 'a lot of money I do not need.' [...] [Retired physician Dieter Lehmkuhl] got the idea when Berlin stumped up billions of euros to save banks and give the recession-hit economy a boost. Lehmkuhl said, 'It made me mad to think that we suddenly found all this money for the banks, money that we did not have before for urgent programmes like education and the environment.' [Dr. Lehmkuhl] would like Germany to have its own version of the the US group United for a Fair Economy."

Read the full article on The Local: Germany's News in English.

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