The estate tax is a tax on the transfer of assets at death (inherited wealth). It applies only to large accumulated fortunes.
When someone dies, his or her assets (the "estate") are distributed to heirs. If the total value of the estate is larger than the tax-exempt amount, an estate tax is imposed on the portion above the exemption before the remaining assets are distributed. Any amount given to a spouse or charity is tax exempt.
Since 2002, the estate tax has been paid only by millionaires. Rates have varied, since the Bush Tax Cuts of 2001 and 2003 resulted in frequent changes to the estate tax exemption and rate.
The individual estate tax exemption—the amount of money an individual can pass to heirs tax free—has been as low as $1 million in 2002 and as high as $5 million in 2011. The exemption is effectively doubled for married couples who engage in basic estate planning.
Rates on the amount above the tax-free exemption have varied from 55 percent to 35 percent. Below you can find a table listing the estate tax exemption and rate since 2002.
Who pays the estate tax?
The estate tax is reserved only for society's wealthiest elite. In 2009, just one-quarter of one percent (0.25 percent) of all estates were expected to owe any estate tax at all.
Very few family farms and small businesses are affected by the estate tax. The Congressional Budget Office estimates that with a $2 million exemption, only 123 farms per year in the U.S. would owe any estate tax, and the number of small businesses is similarly small. In 2001, the New York Times reported that American Farm Bureau Federation (who was in favor of repealing the estate tax) could not cite a single case of a family farm lost due to the estate tax.
On average, those few small business and farm estates will owe only 14 percent of the estate, so it is unlikely they will have to sell the business or farm. Plus, they can spread any payments over 14 years. They also benefit from special use valuation, and minority interests and marketability discounts.
Moreover, gutting the estate tax would actually hurt family farms. The estate tax helps make family farms more competitive against mega-scale agriculture, because it moderates ever-larger concentrations of wealth and economic clout. Repeal of the estate tax or exempting farms completely will only encourage further concentration of farm ownership, which reduces competition. An unlimited exemption for farm assets could create a giant loophole from the estate tax because wealthy individuals who expect to owe estate tax could use much or all of their wealth to buy farms before they died.
The estate tax raises billions of dollars each year. The estate tax, at 2002-2009 rates and exemptions, raised $15-26 billion per year. The variations are due to the changes in exemption and rates caused by the Bush tax cuts, as well as fluctuations in the overall economy that affect the value of assets like stocks and real estate. The table below summarizes estate tax revenue since 2002, using IRS data and an estimate by the Tax Policy Center.Why is it important to preserve a strong estate tax?
Weakening the estate tax would mean billions of dollars in tax breaks each year for the exclusive benefit of multi-millionaires. The responsibility of paying taxes for public services will shift from millionaires to low- and middle-income taxpayers. A strong estate tax is one of the best remedies for economic inequality because it reduces dynastic wealth and helps ensure more broadly shared prosperity.
A strong estate tax law will have a graduated rate structure that taxes very large fortunes at a higher rate and an exemption that results in 98 percent of Americans paying no estate tax. A strong estate tax would raise substantial revenue for our government.
UFE is one of the few national organizations that trains and supports organizers, educators, activists, and others, to lead interactive presentations on economic inequality. There are several hundred TOT Institute graduates nationwide who use UFE’s Popular Economics Education methods and/or materials in their justice work. We hold these intensive Training of Trainer Institutes several times a year.
Who Should Attend?
The Training of Trainers Institute serves activists, educators, organizers, clergy and laypersons working on issues of economic or social justice. We also accepts applications from trainers seeking to improve their teaching skills and become more comfortable presenting economic information.
The Institute's Curriculum
The Institute will include:
- Key economic trends, viewed through class, race, and gender lenses;
- How rules and policies have contributed to the growing economic divide;
- A brief history of US popular resistance to economic inequality;
- Strategies for building a movement for economic equity;
- Selected principles and practices of popular education;
- Practice leading participatory activities about economic inequality; and
- Learning from others and buiilding community among people working for economic justice.
Mini Training of Trainers: UFE offers shorter versions of the full four-day Institute. Similar material is covered in an abbreviated version. To request a Mini-TOT, email [email protected]
Full TOT Institute: Each four-day TOT Institute consists of work sessions in the mornings, afternoons, and evenings, with breaks during the day to allow participants to take advantage of recreational attractions available at the conference sites.
Each Institute features presentations of UFE's workshops; a review of key principles and practices of popular education; time for small teams to plan, practice, and get feedback on activities from the Growing Divide workshop or curricula that participants bring to the Institute; sessions on responding to challenging questions and difficult situations; and an exploration of education in the context of organizing, mobilizing, and movement building.
It is necessary to attend the full TOT Institute in order to get the maximum benefit of the training. Materials, including a workshop Trainer's Manual and handouts, a detailed agenda for the Institute, background and reference materials, and short readings are included in the Institute fee. Additional logistic and background information will be sent to all registrants prior to the training to help participants prepare. To request a Training of Trainers Institute, email [email protected]
Sliding Fee Scale: $500 - $1,500 (based on what you or your organization can afford). This fee includes meals, accommodations, and training materials. Transportation is NOT included in the fee.
A minimum $25 non-refundable deposit is required at the time of application. Payment in full is due one week before the start of the Institute.
We have limited funds available for scholarships to help offset a portion of the Institute's cost. These are available for participants representing community and grassroots organizations with limited financial resources. Applicants will have the opportunity to request aid after submitting the registration application.
We welcome contributions and sponsorships from well-funded organizations and individuals to help facilitate the participation of less well-funded groups. Gifts are tax deductible. Please click here to contribute!
For More Information
Contact us at [email protected]
UFE's E-Newsletter - Back Issues
February 2010: Climbing the Social Ladder...Or Not | Whither the CFPA? | Exploiting the Unemployed for the Sake of the Rich | AFET's Principles for a Fair Estate Tax | Fifteen Years Toward a Fair Economy
January 2010: Kickin' Off the New Year | The Battle for Consumer Protections | Oregonians Vote for the Common Good | State of the Dream 2010 | Addressing Corporate Mischief from Within | Estate Tax in Limbo
December 2009: You Make It Happen! | UFE Makes National Splash on the Estate Tax | TFOC Wraps 2009 With A Big Picture Plan | Training West Coast Trainers - UFE Visits L.A. | Coming Soon: State of the Dream 2010
October 2009: Amaad Rivera Wins Emerging Leader Award | Where's the Strategy in the Stimulus | Immigration: It's Time to Dispel the Myths | Reining in CEO Pay | The Commons: From Tragedy to Celebrity
September 2009: Sustaining OUR Movement | Whose Deficit is it Anyway? | Wealth inequality Declining! But wait... | What's in a job? | All Work and No Pay
August 2009: The Healthcare "Debate" - McCarthyism For The New Millenium | Ten Years, $1 Trillion - Who's Going to Pay? | California vs. Texas: An Economic Heavyweight Bout | Momentum Building for "Say on Pay" | Estate Tax Update: The Right's Not Over Yet
July 2009: Financial Regulation: Which Way is Forward? | Special Offer to UFE Members from YES! Magazine | Taxes: A State Budget's Best Friend | Pope Benedict XVI Calls for a New Economy
May/June 2009: It's Juneteenth - Time to Celebrate | Financial Regulation: Is President Obama on the Right Track? | States Taxing the Few to Serve the Many | Kenneth Feinberg, The Compensation Cowboy | [email protected]'syouth: Mr. President, We're Broke! | Support UFE by Surfing the Web
March/April 2009: Wall Street Should NOT Dictate Our Economic Future | Help Spread The Word About Economia Justa | Upper-Income Folks Say: "Raise My Taxes!" | Tax Fairness Victories Across The States | Bankers, Brokers, Bubbles and Bailouts: What's It All About | Focus On People, Not Profits
February 2009: Fearless Leader Needed | Join the Fight for a Progressive Estate Tax in 2009 |Make a Powerful Statement For Tax Fairness | Making Noise about Racial Inequality | Pressure Gets Results on CEO Pay
January 2009: Announcing UFE's 6th Annual MLK Day Report - State of the Dream 2009: The Silent Depression
December 2008: Building the Movement for a New Economy | UFE Report to Put Spotlight on Racial Inequality | Where Fundamental Rule Changes Start | The Economic Meltdown is Not Funny... Or is it? | Taking the Long Way to Build a Movement
November 2008: Building on the Moment | Join the Week of Action About the Economy | UFE Report Helps in Discrimination Complaint | Roundup of Recent Reports
October 2008: Economic Inequality- Still a Political Hot Potato
September 2008: Wall Street Bailout Update | Rule Changes: First Wall Street, Then.. | Extreme Executive Pay Hurts Taxpayers | Civil Rights Veterans Encourage Youth Activism | "Teen Voice" hold Popular Education Workshop | UFE Interns Take Economic Justice to the Streets
June 2008: Building the Backbone of the Economic Justice Movement l Annual Tax Organizing Conference Tackles State Budget Crises l Latest State Tax Achievements l Wells Fargo 2008 Shareholders Resolution Targets Racial Profiling and Sub-Prime Mortgages l Race, Ethnicity and Economic Diversity l What's the 'Color of Wealth'? (Op-Ed) l Working Group on Extreme Inequality Fights Economic Disparity l UFE Op-Ed Calls for Change, Not Tax Rebates
April 2008: Evaluating Candidates on Taxes | Why Not Gratitude for Taxes? | More Evidence Shows Economic Rules are Rigged | Give Up Your Riches Or Face Eternal Damnation! | New Accessible Books Turn a Critical Eye on Wealth and Finance | How Are We Doing?
March 2008: Nation's Most Progressive Tax Gets a Boost | Take the Tax Fairness Pledge | State Budget Woes Mean Opportunity for Progressive Tax Advocates | How Do You Know Economic Inequality is Bad? | Vote for UFE! | Responsible Wealth Members Share their Stories in the Media
February 2008: Subprime Lending Crisis Gets Racial Perspective | Bank of America Benefits from Lending Crisis, Taxpayers to Foot the Bill | A Community Approach to Affordable Housing | Progressive Taxation Needs Your Voice | Fostering Economic Justice in North Carolina | Supporting the Economic Justice Movement by Building Capacity
January 2008: "Foreclosed: State of the Dream 2008," Subprime Lending Causes Greatest Loss of Wealth for People of Color in Modern History.
December 2007: Season's Greetings and Best Wishes for the New Year | State of the Dream: Foreclosed! | New Website Being Tested | Estate Tax Celebrities | CEO Pay Gets Oversight | Restructuring the Community Reinvestment Act for the 21st Century | Predatory Lending Needs More Attention
November 2007: Zai Hui (Goodbye) to our Executive Director | Predatory Lending Becomes Prey | Community Organizers Needed | Warren Buffett's Betting a Million for Fairer Taxes | Estate Tax Repealers Hard of Hearing | One Estate Tax Battle is Won, but the War Rages On | UFE Board Member Honored | Responsible Wealth Member Aims for Congress
October 2007: Another World is Possible; Another US is on the Way | The Racial Retirement Gap | Responsible Wealth Action News | Is Your State Helping the Poor? | Executive Excess Success! | Progressive Merger Promises New Organizing Capacity | UFE Taps Online Network
August 2007: Special Labor Day Issue on CEO Pay
May-June 2007: Renewed Energy for Economic Justice | Western Union Challenged on Highway Robbery | A New Attack on Poverty |Anti-Poverty Tax Credits Move to the States | Debunking Immigration Myths and the Fight for Tax Fairness | Savings for All | The Power of Possibility: The U.S. Social Forum |Sisterhood, Research, and Activism | Help us Help You!
April 2007: National Awakening about Poverty | Praxis - How Education Can Move People to Action | Ouch! Who's really Hurting? | Holding Corporations to Account | Estate Tax Battle Heats Up Again | Taking Pride in Taxes | MyTaxCut Calculator and Tax Fairness Pledge
March 2007: Wealthy Taxpayers Still Reaping Huge Tax Cuts | My Tax Cut | Help Get Tax Cuts Out of the Federal Budget | Experts and Learners - That's What We All Are | Enough Corporate Shell Games | Black and Brown Unity - A Key to the Movement | Economics As If People Matter
February 2007: What's Next with Economic Inequality? | Why We Pay Too Much for Job Creation | Righting Upside-Down Budget Priorities | Get Educated | As the South Goes... A Canary in the Coal Mine | Ending Predatory Lending with a Fair Chance
January 2007: MLK's Dream Was Not Colorblind | UFE Members Help Make the "First 100-Hours" a Huge Success | Food Stamps Needs Support | More Troops, More Dollars for War: What are Our Priorities? | The Fighting Tennesseans! | Honors for Diversity
Other Groups That Focus on Tax Fairness Issues
- Center on Budget and Policy Priorities
- Citizens for Tax Justice
- Economic Analysis and Research Network
- Emergency Campaign for America's Priorities
- Good Jobs First
- Institute on Taxation and Economic Policy
- National Community Tax Coalition
- National Education Association
- Progressive States Network
- State Environmental Leadership Project
- State Fiscal Analysis Initiative
- US Action
- US PIRG - Federation of State PIRGs (Public Interest Research Group)
CEO Pay Charts 1990-2005
Total executive compensation: 2005 data based on Wall Street Journal survey, April 10, 2006; all other years based on similar sample in Business Week annual compensation surveys (now discontinued). Includes: salary, bonus, restricted stock, payouts on other long-term incentives, and the value of options exercised.
S&P 500 Index: Economic Report of the President, 2006 Table B-96; 1997, 2000 Table B-93; average of daily closing prices.
Corporate Profits: U.S. Department of Commerce, Bureau of Economic Analysis, National Income and Product Accounts, Table 6.16, with inventory valuation and capital consumption adjustments.
Average worker pay: Based on U.S. Department of Labor, Bureau of Labor Statistics, Employment, Hours, and Earnings from the Current Employment Statistics Survey (average hourly earnings of production workers x average weekly hours of production workers x 52).
Minimum wage: Lowest mandated federal minimum wage, nominal; U.S. Dept. of Labor, Employment Standards Administration, Wage and Hour Division.
Adjustment for inflation: BLS, Average Annual CPI-U, all urban consumers, all items.
The U.S. is said to offer gold-standard health care, but as the most expensive health system in the world, some here say that only people with a pot of gold can get that care.
Drug prices, health insurance, doctor visits and hospital stays are too expensive for many people to afford, while insurance and drug company profits continue to climb.
The nation is entering a health care crisis, many leaders and experts say. An estimated 46 million people do not have health insurance because they cannot afford it, and the U.S. has one of the poorest health profiles of the developed world.
Meanwhile, in 2005, pharmaceutical giant Johnson and Johnson earned profits of 10 billion dollars and Pfizer had profits of eight billion dollars, according to Fortune Magazine.
Health care is bankrupting even well-to-do U.S. citizens, especially people who have the misfortune of becoming seriously ill.
"The reason our health system is so crazy is we treat health care as a commodity. That really doesn't work. Most countries see it as part of their job to take care of their people," Meizhu Lui, executive director of United for a Fair Economy, told IPS.
Originally posted on DollarsandSense.org on Jan. 1, 2007
Last fall, anti-tax organizations in Washington state sponsored an initiative, I-920, to abolish the state's estate tax. Given Washington's history of voting overwhelmingly for tax cuts, it looked as if the estate tax was a goner—especially as initial polls showed over half the state's voters believed they would have to pay the tax if it remained in place.
In reality, the tax is only paid on 200 to 250 estates a year, those worth over $2 million ($4 million for a couple). More than 99% of the state's taxpayers are exempt. Revenue from the tax is dedicated to the Education Legacy Trust Account, used to reduce class size in K-12 education statewide and provide scholarships and additional financial aid to nearly 18,000 low- and moderate-income college students.
In the end, the repeal effort was roundly defeated by a margin of 62-38. Majorities in all but 3 of the state's 39 counties, even in conservative western and southeastern Washington, voted against repeal.
Organizers say the main thing they had going for them was the linkage to education. "It would have been more difficult if we had not been able to tell people exactly where their money was going," said Sandeep Kaushik, communications director for the No on 920 campaign. "In every community, we knew how many students benefited."
Hundreds of students, educators, and parents were engaged in the effort to defeat the measure. The Washington Education Association, the statewide teachers union, put substantial resources into the campaign. And some of the state's multimillionaires were outspoken opponents of repeal as well, claiming that the tax is appropriate as a way to pay back the gift of education so that others can benefit as they did.
One of them, Bill Gates, Sr., father of the richest man on earth, argued in the Seattle Post Intelligencer that Washington's estate tax was an "opportunity recycling program." Gates's op-ed bears quoting at length:
"Washington state has provided fertile ground for some very successful enterprises in the last generation. These individuals have made good use of their 'American inheritance,' including our accumulated scientific heritage and natural bounty. They have harvested plenty from our society's investments in technology and our remarkable system of property laws and regulated markets. Without this inheritance, they frankly wouldn't have succeeded in quite the same way.
If we abolish the state's inheritance tax we stop the opportunity recycling program. We allow the common wealth to stop flowing and concentrate it in the hands of a few. And worse, we slow the investments in opportunity that aim to provide every young person a chance, whether they were born in South Seattle or Mercer Island."
At the federal level, the estate tax is due to be ended for one year, 2010, then come back the following year at its 2006 levels. Partisans on all sides agree this is bad policy, an example of congressional sausage-making at its worst; Congress must act before 2010 to fix it. Total repeal of the tax is unlikely now, with a Democratic majority in Congress. This opens up all sorts of real opportunities for positive reform.
The fight to keep the federal estate tax could benefit from analyzing the Washington state experience. Why not suggest an estate tax reform that tracks the Washington state law: a $2 million exemption, along with a progressive rate structure? And why not set aside the revenue from the tax for a Children's Opportunity Trust Fund, to provide educational and wealth-creation opportunities?
While earmarking is not great public policy, in this instance it may be the best way to help the public build an enduring understanding that the estate tax represents an intergenerational transfer, a way to ensure that cultural and educational resources flow to the young. It may be the key to long term preservation of the inheritance tax.
Sources: Washington Secretary of State, 2006 General Election Results; William Gates Sr., I-920: No, it's a small levy, so help recycle investment in the wealthy, Seattle Post-Intelligencer, 10/15/06; Washington Defense.
The 2007 Shareholder Advocacy Campaign
||Review on Remittance Fees, Rates, and Policy||Resolution|
|Wells Fargo||Racial Disparities in Mortgage Lending||Resolution|
Over years of working to preserve the estate tax, UFE has sponsored or commissioned various advertisements in print, audio and video.
Leave No Heiress Behind (video)
Marge & Frank Radio Ad (audio)