Senate Votes Down Permanent End to the Estate Tax

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Wednesday, July 21, 2010 at 11:04 pm

This evening, the Senate voted on a proposal by Sen. Jim DeMint (R-S.C.), one of the most conservative members of Congress, to permanently end the estate tax via an amendment to the small business bill. The amendment failed, 39 to 59.

Partisan wrangling last year resulted in the estate tax dropping to zero in 2010, costing the government billions in revenue. Democrats hope to reinstate the tax for next year, exempting the first $3.5 million of a person or family’s estate and taxing the rest at up to 45 percent. That makes it the country’s most progressive tax, applying to less than one percent of estates.

An alternative proposal, by Sens. Blanche Lincoln (D-Ark.) and Jon Kyl (R-Ariz.), calls for an exemption of $5 million and a top rate of 35 percent. If the Senate does not act, the tax bounces back to 2001 levels, with an exemption of $1 million and a top rate of 55 percent.

Republicans argue the tax is onerous on small businesses and farms, as well as unfair. (Democrats argue even the Internal Revenue Service says it cannot find instances of families selling off farms just to pay the tax.) And DeMint said permanently repealing the tax would have created 1.5 million jobs.

“The death tax kills jobs, hurts small businesses, destroys family farms and President Obama’s plan to hike it from zero percent to 55 percent next year is unconscionable,” he said in a statement. “The death tax is an unfair, immoral double tax on property and assets that folks have already paid taxes on throughout their lives. … The Obama death tax is just the latest example of this administration’s assault on small businesses.”

But today, some very, very wealthy folks publicly lobbied for the estate tax — essentially saying, “Take my money, please.” They argue that the tax encourages charitable giving and planning among wealthy families — and is good for the country. Warren Buffett and Bill Gates have previously called for a high estate tax, and on fellow billionaires to give wealth away. And today, so did Bob Rubin, the former Treasury Secretary, a Disney heiress and a number of others.

One hedge fund manager argued, “You get out of a credit crisis by getting your house in order, and in America’s case bringing your deficit down. This implies tax increases,” best passed to “the least deserving recipients of wealth, which are the inheritors.”

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32 Comments

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Eric_Jaffa
Comment posted July 22, 2010 @ 3:16 am

People who inherit LESS THAN a million dollars should have to pay taxes on that.

People who inherit MORE THAN a million, all the more so.


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ajm8127
Comment posted July 22, 2010 @ 10:07 am

So the republicans are trying to create a dichotomy in the wake of the unemployment extension essentially saying, “hey rich folk, we're fighting for you even though the ems want to give free handout to people which make them unwilling to find work.”

Andrew Carnegie once said that once you die, you should not pass on any of your money to your family, but rather donate your fortune. This not only puts a lot of money into charities, but also prevents offspring of wealthy individuals from becoming complacent. That's why in Pittsburgh we have the Carnegie Library, Carnegie Mellon University, and the Carnegie Music Hall among others.

http://en.wikipedia.org/wiki/Andrew_Carnegie#On…


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Boston05
Comment posted July 22, 2010 @ 2:36 pm

I don't care if you're Dem or Repub…..why should it be taxed twice? Stay out of my pockets already….


strangely_enough
Comment posted July 22, 2010 @ 3:43 pm

YOU inherit it once; it's taxed once.

Stupid talking point.


Tom Mathers
Comment posted July 22, 2010 @ 3:47 pm

For some perspective, Gates and Buffett also have the majority of their existing fortunes in trusts shielded by taxes, and have never, not once, voluntarily given “extra” taxes to the US Treasury on their tax forms, an option available to all taxpayers, every year.


Dan
Comment posted July 22, 2010 @ 4:24 pm

The majority of estates sizing more than $1 million or $3.5 million are comprised of capital gains on things like stocks and real estate.

This means that the person who died never paid taxes on that wealth or earning in the first place.

So you really are taxed just once. And anyway, every penny you make is taxed three or four times when you pay income, sales, tobacco, or alcohol taxes so I don't understand the double tax argument anyway,

Also, DeMint says Obama wants the estate tax to return full force in 2011. This is a lie, Obama wants to make the 2009 estate tax permanent. This would mean a $3.5 million exemption with a tax rate of 45%.

The estate tax is important, it only affects the very wealthy, and it was created by a Republican – Teddy Roosevelt – in 1917. It's as American as apple pie.


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NoDepositCasino
Comment posted January 3, 2011 @ 6:56 pm

Gates and Buffett also have the majority of their existing fortunes in trusts shielded by taxes, and have never, not once, voluntarily given “extra” taxes to the US Treasury on their tax forms


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