Weak Estate Tax Could Derail Tax Deal

By Ashlea Ebeling
Posted on Forbes.com, December 10, 2010

Members of the fair tax movement are outraged at the generous estate tax provisions in the Obama/GOP tax deal and are calling on Congress to strengthen it so it hits more estates. Rather than reinstating the estate tax at 2009 levels (a 45% top rate and $3.5 million per person exemption) as was expected, the deal sets the top rate at 35% and raises the exemption to $5 million. So a couple could leave $10 million to heirs without worrying about the federal estate tax.

“It’s obscene and unnecessary, and it benefits no one but a handful of heirs of rich parents,” stated Mike Lapham, director for United for A Fair Economy’s Responsible Wealth project, in a release today calling for stronger tax provisions in the deal, and applauding House Democrats for their commitment to strengthening the plan. “The estate tax is reason enough to reject the deal,” Lapham said.

Responsible Wealth has been fighting for a fair estate tax for 10 years, ever since the Bush tax cuts started gradually weakening the tax, ending with repeal for 2010. (If Congress does nothing, the estate tax is set to return on Jan. 1 with a $1 million per person exemption and rates of up to 60%.) High-profile signers of Responsible Wealth’s “call to preserve the estate tax” include Forbes 400 members David E. Shaw, Julian Robertson, Jr., George Soros, John Sperling, and Ted Turner. All six children of David Rockefeller, the oldest Forbes 400 member, have signed too.

Last month Responsible Wealth gathered millionaire and multi-millionaire signers of the call who are small business owners and entrepreneurs to speak out on why they support a strong estate tax. [...]

Read the full post on Forbes.com.