For Immediate Release: March 29, 2012
- Tim Sullivan, United for a Fair Economy, (617) 423-2148 x127, [email protected]
- Brian Gumm, OMB Watch, (202) 683-4812, [email protected]
Americans for a Fair Estate Tax Coalition
Urges Congress to Restore Strong Estate Tax
Washington, DC – Americans for a Fair Estate Tax (AFET), a coalition of dozens of national and state organizations, announced today that it sent a letter to all members of the House and Senate calling on Congress to boost revenue and address growing inequality by supporting the Sensible Estate Tax Act of 2011.
The Sensible Estate Tax Act, H.R. 3467, will restore the estate tax to Clinton-era levels, which will then be indexed to inflation. The bill provides a $1.3 million tax-free exemption ($2.6 million for married couples), with graduated rates up to a maximum marginal rate of 55 percent. This exemption would shield about 99 percent of Americans from the tax and would continue to be adjusted for inflation in the future.
AFET members stated if Congress does not pass the Sensible Estate Tax Act, the best alternative would be to let the current estate tax rules lapse and allow the pre-2001 rules to return in 2013, as scheduled under current law. In this scenario, an individual would be able to pass on $1 million tax-free, and a married couple could pass on up to $2 million tax-free.
Among the 77 organizations signing the letter are groups with national memberships such as YWCA and USAction, philanthropic groups including the National Committee for Responsible Philanthropy, and labor groups, including AFL-CIO, AFSCME, and SEIU.
Lee Farris, Estate Tax Policy Coordinator of United for a Fair Economy and AFET steering committee member, said, “Instead of cutting Social Security, Medicare, and other programs that help low- and middle-income people, our elected leaders in Congress should support the Sensible Estate Tax Act. H.R. 3467 would bring in substantial revenue from those who can best afford it, the estates of millionaires and billionaires, and at the same time reduce economic inequality by restoring our nation’s most effective curb on inherited wealth.”
Katherine McFate, president of OMB Watch, said, "The accumulation of inherited wealth is one source of the historically high levels of inequality that exist in America today." She continued, "The estate tax was put in place to prevent wealth from becoming too concentrated. A vigorous estate tax keeps inequality in check and raises revenue for necessary public investments. The families who have benefited the most from the American economic system should support the public structures that help create opportunity for future generations."
Charles Loveless, AFSCME's Director of Federal Government Affairs, said, “The wealthiest one percent of taxpayers should pay their fair share of taxes. We need a strong estate tax so we don’t have to cut the public investments that create prosperity for everyone.”
The letter also states that:
- The Congressional Budget Office (CBO) projects that federal estate and gift taxes will generate $516 billion in revenue from 2013 through 2022, assuming that the 2010 estate and gift tax cut expires as scheduled at the end of 2012.
- Other policy options would be fiscally irresponsible. CBO found that extending the estate tax reduction in effect for 2011 and 2012, which increased the estate tax exemption to $5 million per spouse and reduces the top estate tax rate to 35 percent, would cost $432 billion over the following decade.
- Existing tax breaks would continue to protect small businesses and farms under either the pre-2001 rules or the Sensible Estate Tax Act. A CBO analysis found that only 0.3 percent of taxable estates were either family held-business estates or estates of farmers and lacked sufficient liquid assets (like cash, stocks, and bonds) to pay the estate tax. That’s why opponents of the estate tax have not been able to find a single farm that had to be sold to pay the tax.
The Sensible Estate Tax Act would also make important reforms that reunify the gift and estate tax exclusions; make permanent the portability of the exemption for spouses; restore the state credit to provide critical revenue for states without increasing taxes; close loopholes in the asset valuation and minority discount rules; among a number of other reforms.
To speak to one of the thousands of people across the U.S. whose families have paid or expect to pay the estate tax and support a return to higher estate tax levels, contact United for a Fair Economy.
The complete text of the AFET letter is available at: www.ombwatch.org/files/budget/EstateTax/AFET_SETA_House_Senate_Letters.pdf
Americans For a Fair Estate Tax is a coalition of nonprofit organizations and others from around the country, representing a wide cross-section of America, and includes civic, labor, social justice, faith-based, environmental, and human services groups. The coalition is dedicated to preserving the estate tax as a valuable part of the progressive U.S. tax system.
United for a Fair Economy is a national, independent, nonpartisan, 501(c)(3) non-profit organization located in Boston, MA, which advocates for progressive economic and tax policies. More at www.FairEconomy.org.
OMB Watch is a nonprofit research and advocacy organization dedicated to promoting government accountability and effectiveness and increasing citizen engagement. Learn more at www.ombwatch.org.