Senate Will Try to Kill Estate Tax Tomorrow

by bob (

)
Press Release from United for a Fair Economy
For immediate release-June 7, 2006
Contact: Christina Kasica, 617-423-2148 ext 119 or 617-966-0554
Chuck Collins: 617-308-4433

Senate Will Try to Kill Estate Tax Tomorrow

Vote on Fiscally Irresponsible Reform Proposals Also Possible This Week

Boston-The Senate will vote on repeal of the estate tax (H.R. 8) tomorrow, Thursday, June 8. Long-time proponents of estate tax preservation Chuck Collins and Lee Farris from United for a Fair Economy, are available to comment on the implications of repeal, the eighteen families bankrolling the repeal effort, and proposals to modify the estate tax.

"At a time of rising deficits and big due bills like the war in Iraq, we cannot afford either the cost of repeal-a trillion dollars over the first ten years-or the aristocracy of wealth that repeal would leave us," said Chuck Collins, senior fellow at United for a Fair Economy.

"Americans have suffered through a ten-year campaign of PR and deception designed to convince us that we will all have to pay this tax and that it will take half of everything people own. We now know this campaign was financed by 18 of the richest families in our country, who stand to keep an extra $72 billion if repeal is passed," said Lee Farris, senior organizer for estate tax policy at UFE. "The truth is that the estate tax affects a tiny fraction of taxpayers-- 0.27%-- but benefits us all by helping to pay for the public structures we need to run this country, such as roads, public schools, Social Security, the Internet, investment in energy and technology research, and many other crucial services."

The outcome in the Senate is likely to hinge on a complicated procedural vote known as cloture, or closing the debate, which requires 60 votes. Senators voting for cloture are effectively voting to repeal the estate tax, since a vote to repeal will directly follow a vote for cloture. Repeal itself only requires 50 votes. Vice-president Cheney, a supporter of repeal who will personally benefit by $13-61 million if the estate tax is repealed, would cast the tie-breaking vote in such a case.

Senators Jon Kyl (R-AZ), Max Baucus (D-MT) and Olympia Snowe (R-ME) are each readying proposals to modify the estate tax that will be nearly as costly as full repeal. "Every modification proposal we have heard about so far constitutes ‘virtual repeal' because they gut the revenue-generating capacity of the estate tax," commented Farris. The Senate could vote on select proposals as early as this week.

United for a Fair Economy (www.faireconomy.org) is a national, non-partisan, nonprofit organization that spotlights the growing economic divide in the United States.

Estate Tax Facts:

In 2006, the estate tax exemption is $2 million per individual and $4 million per couple. Just one in 370 of all estates, or 0.27%, will pay the estate tax in 2006.

In 2009, the estate tax exemption will be $3.5 million per individual and $7 million per couple. One in 600 estates, or 0.16%, will pay the estate tax in 2009.

The cost of repealing the estate tax is $1 trillion in the first 10 years of full repeal.

In order to mask the full cost impact of repeal when the latest reform was passed in 2001, Congress enacted a law that allows for full repeal for only one year (2010) and then re-instates the estate tax at 2000 levels in 2011.

A recent report entitled "Spending Millions to Save Billions: the Campaign of the Super Wealthy to Kill the Estate Tax," reveals that 18 families bankrolled a 10-year PR and lobbying campaign that spread deceptions about the tax to encourage support for repeal. See the full report at: http://www.faireconomy.org/reports/2006/EstateTaxFinal.pdf

Synopsis of Estate Tax Modification Proposals:
Kyl Proposal: Raise exemptions to $5 million for individuals, $10 million for couples, and lower tax rate to 15%.
Baucus Proposal: Exemptions of approximately $3 to $4 million, with a graduated tax rate starting at 15%, rising with the size of the estate and topping out at 35%.
Snowe Proposal: Raises exemptions to $7 million for individuals, and taxes estates between $7 million and $10 million at 15 %, estates between $10 million and $15 million at 25%, and estates above that at 28%.