Reuters: Obama tax deal a big gift for America's rich
Original publication: Reuters
Date of publication: December 7, 2010
Obama tax deal a big gift for America's rich
By Joseph Giannone
Column appeared on Reuters.com, December 7, 2010
More than 40,000 ultra-rich Americans may have another reason to celebrate the holiday season if President Barack Obama's latest estate tax proposals are passed by Congress.
Obama struck an agreement on Monday with
congressional leaders on a range of tax issues, including cutting the
estate tax to 35 percent and raising the individual exemption to $5
million. The estate tax, which expired this year, is due to return in
2011 at 55 percent with a $1 million exemption. If
the compromise proposal is passed, roughly 40,700 families will avoid
an estimated $23.2 billion of estate taxes next year, according to the
Urban-Brookings Institute Tax Policy Center. Around 3,500 families would
pay an estimated $11.2 billion in estate taxes. "They're
making the estate tax weaker than it has been for more than seven
decades. This is a real mistake," said Lee Farris, who follows estate
taxes for United for a Fair Economy, a group advocating progressive tax
policy. "Obama also puts himself in a bad position to negotiate the tax
in two years." (emphasis added) Obama agreed to
extend all Bush-era tax cuts for two years, yielding to Republicans, who
won big in mid-term elections. The preliminary agreement would renew
tax cuts for the middle class, as well as the wealthiest Americans. "You knew Congress was not going to let the
Bush tax cuts expire. There are too many millionaires there," Ray
Madoff, a Boston College law professor and expert on trusts and estates.
"This helps an absolutely tiny, tiny portion of the wealthiest people
who are passing billions to their heirs tax-free." Tax experts now estimate that less than one in 400 families will pay the estate tax, the fewest since the Depression. The estate tax was not the only gift for the wealthy in Obama's plan. Read the rest on Reuters.com
