Today, the top 1 percent own 42 percent of the nation’s wealth while the bottom 90 percent own just 23 percent. The estate tax, on average, levies a 16.6 percent tax on wealth being passed down from one generation to the next, but only effects estates worth more than $5.4 million for individuals or $10.9 million for married couples.
Repeal of the estate tax would result in a $3 million average tax cut to the wealthiest 0.2 percent of households and a $269 billion tax revenue shortfall for the federal government over 10 years. To put these figures in perspective, this $269 billion could help pay for the $164 billion federal highway and mass transit trust funds shortfall, President Obama’s $75 billion proposal to provide publicly-funded preschool to low- and moderate-income children, and the president’s $60 billion proposal to provide free community college to nine million students.
In one form or another the estate tax has been around since 1797 and in its current form in our laws since 1916. It was most recently amended in 2001 as part of the Bush tax cuts and again in 2012, lowering the top tax rate from 55% to 40% and raising the estate tax exemption from $675,000 to $5.4 million, greatly narrowing the scope of the tax.
At a time when Congress is slashing the federal budget to the tune of $5 trillion and making devastating cuts to programs such as food stamps, education, Medicare and Medicaid, college aid, job training, medical research and rebuilding our crumbling roads and bridges, Congress should be looking for ways to generate new income, not cut existing taxable income for the very wealthy. CLICK HERE TO SEND A NOTE TO YOUR CONGRESSMAN.