Five Senators say their proposal to reinstate the estate tax for the "richest of the rich" is a fair and responsible way to deal with the expired statue.
S. 3533 would affect only the top 3/10 of 1 percent of taxpayers, says bill sponsor Sen. Bernie Sanders (I-Vt.). "99.7 percent of American people would not pay any estate tax whatsoever. It is geared toward the richest of the rich."
Joining in introducing what they have dubbed the Responsible Estate Estate Tax Act are Democratic Senators Tom Harkin of Iowa, Sherrod Brown of Ohio, Al Franken of Minnesota and Sheldon Whitehouse of Rhode Island. Their bill would:
Exempt the first $3.5 million of an estate from federal taxation
($7 million for couples). This is the same level that was in effect in 2009.
Include a progressive rate
structure. For estates valued at more than $3.5 million and less than $10 million, the tax would be 45 percent, again the same as the 2009 level. The rate on the value of
estates above $10 million and below $50 million would be 50 percent. The
rate on the value of estates worth more than $50 million would be 55 percent.
Include a billionaire's surtax of 10 percent.
For family farms that might face the estate tax next year, a popular argument against any estate tax collection, Sanders' bill would allow them to lower the value of their
farmland by up to $3 million
for purposes of the tax. Under current law, the value of farmland can be
reduced up to $1 million when calculating estate tax liability.
Dueling estate tax bills:Given
the general antipathy toward government giveaways to special groups,
Sanders and his fellow sponsors' description of the current no estate
tax situation as a bailout for the wealthy might help him get some
And the Vermont Independent, calling the estate tax "a good Republican idea" first introduced a century ago by GOP President Theodore Roosevelt, is hopeful some of his current colleagues who sit across the political aisle will join in supporting S. 3533.
That prospect, however, is complicate by the fact that a separate estate tax compromise is being worked on Senators Jon Kyl (R-Ariz.) and Blanche Lincoln (D-Ark.). Both serve on the Senate Finance Committee, which will also be the panel that takes the first look at the Sanders proposal.
The Kyl-Lincoln measure reportedly will have a 35 percent top estate tax rate and an exemption for estates valued at
less than $5 million ($10 million for couples), more generous than the Sanders bill. They also are said to be considering a possible prepayment of estate tax
liabilities at a lower
While the Kyl-Lincoln proposal is, according to reports, "essentially written," the lawmakers are tweaking the revenue portions of the measure. Under current law, the 2009 estate tax levels can be extended for two
years without pay-go money, but lost revenue after that must be
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