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Against Estate Tax Repeal
Hawkins Calls on Senate to Oppose Efforts to Slash the Estate Tax |
For More Information:
Howie Hawkins 315-425-1019, hhawkins@igc.org
Sally Kim, (518) 364-2968, green_sallyk@yahoo.com
Howie Hawkins, the Green Party nominee for US Senate, urged the Senate today to defeat various proposals to slash or eliminate the estate tax.
The House voted 272 to 162 to repeal the estate tax in April 2005. The Senate is expected to vote on estate tax repeal in June of this year. If passed, estate tax repeal would enable the heirs of multi-millionaires and billionaires to keep an extra $161 billion in inherited fortunes by 2013 while adding to the deficit. Between 2014 and 2023, it would cost $820 billion in lost revenue.
“This huge tax giveaway would primarily benefit the 700 largest estates worth more than $20 million. Thomas Jefferson, Thomas Paine, and other founding fathers understood the threat to democracy posed by allowing dynasties of great wealth to be handed down from one generation to the next. In ‘The Rights of Man,’ Paine argued for tax rates that rise to ‘the point of prohibition (100 percent)’ on the largest estates. Cutting the estate tax would increase the deficit, deepen the cutbacks, shift the tax burden onto those less able to pay and jeopardize the Medicare and Social Security on which millions of Americans depend. America already leads the industrial world in economic inequality – we should be cutting that divide, not increasing it,” noted Hawkins.
The estate tax is a wealth inheritance tax, which exempts more than 98 percent of Americans. Only estates over $1 million for individuals and $2 million for couples are taxed today. The threshold rises incrementally to $3.5 million for individuals and $7 million for couples in 2009 -- exempting all but the top one-half of one percent of estates. The estate tax was initially enacted in 1916 in response to the deepening economic inequalities of the Gilded Age.
“As the rich get richer, they use their wealth to control government and buy politicians, making politics a hostage of money. As Supreme Court Justice Louis Brandeis put it, ‘we can have democracy in this country or we can have great wealth in a few hands, but we can’t have both’. Life for the vast majority of the people is better when government invests in education, health care, environmental protection, and other services that increase prosperity for all – and worse when it promotes the fortunes of the super-rich at the expense of public goods and services,” noted Hawkins.
Since it is unlikely that the Senate can muster the 60 votes needed to permanently repeal the estate tax, efforts are focused on proposals to gut it instead. For example, Sen. Kyl's plan to exempt the first $10 million of a married couple’s estate from the tax ($5 million for an individual) and to tax the remainder at 15 percent, the current capital gains rate, would cost the federal treasury 84 percent as much as repealing the estate tax entirely. According to the Tax Policy Center, more than half the benefits of dropping the estate tax rate from 45 percent to 15 percent will go 700 estates worth more than $20 million, and they will be handed tax breaks averaging $9 million each in 2011 alone.
Repealing or drastically reducing the estate tax would cut charitable giving as well by eliminating the powerful tax incentive to make charitable donations. A study from the Congressional Budget Office shows that if there had been no estate tax in 2000, U.S. charities would have lost $13 to $25 billion in donations in that one year alone. Such losses could seriously weaken the enormous variety of important organizations supported by bequests and foundations, from soup kitchens to universities.
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 *Website by David Doonan, Labor Donated to Hawkins for Senate Campaign* |
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