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Finally, a Progressive Estate Tax Introduced
Would you trust Senators Max Baucus and Blanche Lincoln to design the next estate tax, our country's only levy on inherited wealth?
Unless progressives stand up, Baucus and Lincoln will team with the GOP's anti-tax point person, Senator John Kyl, to push through a bad estate tax reform. The Kyl-Lincoln reform proposal would gut the law and give additional tax breaks to multi-millionaires and billionaires.
Fortunately, Senate progressives have just introduced an estate tax reform with some spine. The Responsible Estate Tax Act proposes graduated rates on larger estates, closes loopholes, exempts farms and small businesses, and encourages conservation easements. It imposes a "billionaire surcharge" rate of 65 percent on estates over $500,000.
Led by Senators Sherrod Brown (D-OH), Tom Harkin (D-IA) Bernard Sanders (I-VT), and Sheldon Whitehouse (D-RI), this progressive estate tax would raise at least $264 billon over ten years. "At a time when we have a record-breaking $13 trillion national debt and a growing gap between the very rich and everyone else, people who inherit multi-million and billion dollar estates must not be allowed to avoid paying their fair share in estate taxes," said Senator Sanders in a prepared statement.
The politics within the Democrats on the estate tax are bizarre. In 2009, thanks to Senate inaction, the federal estate tax expired on January 1, 2010. In March, a Texas oilman became the first billionaire in U.S. history to die without any estate tax in place, costing the treasury billions.
The good news is that on January 1, 2011, the estate tax returns at its year 2000 level -- with a wealth exemption of $1 million and 55 percent rate. This is what will happen if the Senate takes no action, which seems to be the norm.
Now to us common folks, it seems like a tremendous bargain position for Senate Democrats. If nothing happens, we get a strong estate tax law. So how is the Senate Democratic leadership using this huge leverage?
You guessed it. They're like poker players with three aces in their hand and are ready to fold. Instead of using their leverage to press for something like the Responsible Estate Tax Act, they're allowing Lincoln and Baucus to dominate the stage.
Fair tax advocates are mobilizing to build support for the Responsible Estate Tax Act. Wealth for the Common Good, a network of business leaders and wealthy investors, is backing the legislation and has compiled fact sheets and other resources.
If Democrats are going to address the political impasse created by "deficit politics," they have to step up and support progressive revenue proposals like the Responsible Estate Tax Act.
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13 Comments so far
Show AllThey cant do this to the rich! If they take money from the rich it will kill jobs. The proof of that theory can be seen all across this country. As wealth has gotten more and more concentrated, unemployment has gone down. I hear once the richest 1% have all the money in the country unemployment will be 0% !
At least that's what Rush says, and he wouldn't lie to us... would he?
Yes, I had to get an unlisted phone number to end the dozens of unsolicited job offers I was getting each week during that prosperous year that followed the 2008 financial meltdown.
I am also selling my oceanfront property in Phoenix, Arizona.
Even this small step is unlikely to pass the Senate without being watered down. This is just the tip of the iceberg anyway.
How about restoring a truly progressive income tax where income over 150,000 is taxed at a 70% marginal rate?
How about taking marginal caps off of Social Security contributions?
How about closing loopholes and offshore tax havens?
How about eliminating subsidies and tax breaks to BigOil, Big Ag, Big Pharma etc.?
How about taxing the Banksters and Insurance parasites?
How about...nevermind it aint gonna happen.
I wish I could be perky and optimistic, but I see no evidence to support such an attitude.
Precisely because all your suggestions make sense for ordinary people and would benefit the Common Good, they will never be seriously considered.
Unless and until we throw out the Corporatist-Militarists who run this country, everything will continue to get worse for 95% of us.
Not to mention corporate taxation.
In 1970 US corporations paid 29% of US income taxes. Last year they paid less than 6% and within a decade they will pay no income tax.
The government makes up for declining corporate taxation by increasing the taxes you and I pay.
" It imposes a "billionaire surcharge" rate of 65 percent on estates over $500,000." Does anyone understand this? What does a "billionaire surcharge" have to do with an estate valued at only a half million? If my math is correct, a half million times 2,000 is a billion.
I am being facetious only a bit here, but if there is an estate that you can see that is worth 0.5 million, you can bet your butt that there are at least a billion dollars hidden away in offshore accounts & shell companies that you CANNOT see! The wealth of these racketeers is just like cockroaches.
I wouldn't make that bet. Not on a declared half-mil estate.
In the beginning, the estate tax was meant as a means to eliminate the concentration of wealth in the hands of few. Given that corporations now enjoy the fruits of personhood, shouldn't there be some generational-type check on their unlimited concentration of capital also?
"If Democrats are going to address--+ " Or how about, "if the Democratic position is supported by 75% of the American public." or even "if the president has the belief that it is morally correct." Then they would find their base energized, their popularity improve, their approval ratings go through the roof and their corporate support cut off. Do the Democrats have the courage to represent the people? (Hardly a risky position.) Yes-- these are all rhetorical questions.
The current middle class exempt estate amount is $1 million. I needs to stay there. As proposed the so-called "billionaire" estate tax is a tax increase on the lower middle class. I hope the writer is incorrect and the proposed "billionaire" tax rate is on estates over $500 million, i.e., that the writer left 3 zeros off.
It imposes a "billionaire surcharge" rate of 65 percent on estates over $500,000.
???????? Is this fuzzy math?
This article title is quite deceitful.
"The good news is that on January 1, 2011, the estate tax returns at its year 2000 level"
This outcome will not occur if Baucus and Lincoln get their way (and likely Obama's way).
Any support generated for the Responsible Estate Tax Act will be redirected to pass the Baucus / Lincoln bill.
In Obama's administration, we've only seen progressive bills die and regressive (e.g. Baucus and Lincoln) bills prevail.
Why would anyone expect different in this case?