National Organizations Urged to Join Statement
Americans for a Fair Estate Tax, a coalition of public interest organizations, has released a new statement calling on Congress to preserve a robust estate tax to help ensure that the federal government has the revenue to fund public services that working people depend on.
The statement calls upon Congress to exempt no more than $2 million per-spouse from the estate tax, and tax the taxable portion of estates (the portion in excess of the exemptions and deductions) at no less than 45 percent. It also calls for an additional 10 percent tax on the taxable portion of estates exceeding $10 million.
The tax cut law signed by President Bush in 2001 gradually shrank the estate tax over the course of several years before making it disappear altogether in 2010. But, like all the Bush tax cuts, this cut in the estate tax expires at the end of 2010, meaning the pre-Bush rules would come back into effect if Congress does nothing.
The intention of President Bush and his supporters was to avoid discussion of the true costs of permanent repeal of the estate tax at the time the law was voted on, and to set up a situation in 2010 in which some lawmakers could be pressured into making the repeal permanent.
Last year, the House of Representatives approved a bill that would meet Bush halfway, meaning it would lose about half as much revenue as permanent, full repeal. The House bill would permanently set the per-spouse exemption at $3.5 million and the top estate tax rate at 45 percent. Americans for a Fair Estate Tax (AFET) is calling on Congress to preserve more of the estate tax by setting the per-spouse exemption at $2 million and applying an additional ten percent tax to particularly massive estates.
As the Bush estate tax cut phased in over several years, there was a period of years in which the exemption was temporarily set at $2 million per-spouse. Fewer than 1 percent of deaths resulted in estate tax liability during those years.
The AFET statement also calls on Congress to reinstate the credit for state estate and inheritance taxes, which was repealed in the 2001 law. This has been a blow to states with taxes tied to that credit at a time when their budgets are already in crisis.
If you are authorized to sign the statement on behalf of a national organization and wish to do so, please contact Steve Wamhoff at swamhoff (at) ctj.org.