Doug
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DON'T REPEAL THE ESTATE TAX!
Talking Points and Rebuttals (Substantial sections are excerpted with permission from the Center for Budget and Policy Priorities and Citizens for Tax Justice)
THE ESTATE TAX IS ONE OF THE MOST PROGRESSIVE, FAIR TAXES WE HAVE
- The estate tax is the federal government's only tax on accumulated wealth. It helps reduce concentrations of wealth and power. Repealing this tax will greatly widen economic inequality.
- The estate tax raises a good deal of money without bothering almost 99 percent of us, encourages charitable giving and promotes America's core economic and democratic values.
REPEALING THE ESTATE TAX WOULD CREATE A MASSIVE WINDFALL FOR THE COUNTRY'S WEALTHIEST FAMILIES
- Only the richest 1.4% of Americans are subject to the estate tax. Ninety-eight of every 100 people who die face no estate tax whatsoever.
- Only the biggest estates are subject to the tax: An estate must exceed $675,000 in 2000 for an individual (the exemption will rise to $1 million by 2006). Couples can exempt $1.35 million from the estate tax in 2000 (rising to $2 million by 2006).
HUGE LOSS OF REVENUE IF THE ESTATE TAX IS REPEALED
- In 2000, the federal estate tax is expected to raise $27 billion. That's more than double the total amount of federal income taxes paid by the bottom half of all taxpayers.
- Under this bill we'd lose $105 billion over the first 10 years, and over half a trillion dollars in the second 10 years. Working people will pay for this tax cut by either cuts in services or an increased tax burden.
- Repealing the tax means less funds available to help meet the growing costs of Social Security, Medicare and Medicaid, as well as our other priorities such as improving educational opportunities, expanding health insurance coverage, and reducing child poverty.
REPEALING THE ESTATE TAX WOULD REDUCE CHARITABLE BEQUESTS
- A study by Treasury Department economist David Joulfaian found that eliminating the estate tax would reduce charitable bequests by about 12 percent overall (about $1.7 billion in 1997).
FARMS AND SMALL BUSINESSES ALREADY GET ESTATE TAX RELIEF
- The family farmer is the poster child of the anti-estate-tax movement, but in truth, less than one in 20 farmers leaves a taxable estate, and the typical farm estate's tax payment is only about $5,000.
- Family-owned businesses are also a small part of the estate tax - less than 3% of total assets for estates worth less than $2.5 million.
- The estate tax already offers sizeable special tax breaks to protect family businesses or farms.
ESTATE TAX RATES ARE NOT AS HIGH AS SOME BELIEVE
- A combination of permitted exemptions, deductions, and credits, together with estate planning strategies reduced in 1997 the effective tax rate to less than one-third of the 55% top marginal tax rate -- on average estate taxes represented 17% of the gross value of the estate.
A LARGE PORTION OF THE VALUE OF ALL ESTATES HAVE NEVER BEEN TAXED
- Unrealized capital gains constitute the bulk of the largest wealth accumulations. These unrealized gains have never been taxed and without the estate tax, they would remain untaxed forever.
- The estate tax is not a "death tax" on a person who died. It's like an income tax on an heir who has inherited a fortune.