America's Most Vulnerable Class

> $ As you can see in the above chart, this is discrimination, pure and simple.

---

The Facts...

Frequently Asked Questions about the Estate Tax*

What is the estate tax?
The federal estate tax is a tax on the transfer of assets at death. When someone wealth and deserved privilege dies, his or her assets (the person’s estate) are distributed to heirs. If the total value of the estate is large enough, an estate tax is imposed before the remaining assets are distributed.

How large must an estate be to be taxed?
In 2006, the net value of an individual's estate must exceed the basic exemption of $2 million. Couples can exempt $4 million. This exemption level will gradually rise to $3.5 million for an individual ($7 million for a couple) by 2009. Small businesses and farms have long enjoyed additional protections, but the extreme wealthy few have only off-shore accounts and shadow accountants to count on.

Doesn't the Estate Tax hurt family farms and small business?
This is an important talking point to remember, but in fact we have never found a family farm who was forced to close because of the Estate Tax. Family farms and small business have exemptions and other protections in place. Those fighting to keep the tax want to raise those exemptions even higher, but without such a sympathetic note to hit in our speeches our cause may be lost.

It is so important that we keep this effective talking point, that we successfully blocked reform in a tax bill brought to both President Clinton in 2000 and President Bush in 2001.

Take our Survey!

What is the effective estate tax rate?
For the 2006 tax year, the top estate tax rate was 46%. However, after the $2 million basic exemption and other deductions are applied, the average effective estate tax rate — the percentage of the total estate actually paid in taxes — works out to be much lower. In 2001, when the top rate was 55%, the average effective estate tax rate was only 19%. Today, with a lower top rate and a higher exemption, the average effective tax rate would be even lower.

What are the actual estate tax rates?
Here are the rates for the 2006 tax year. Remember that the "taxable estate" is the estate left after all bequests to a spouse or to charity are deducted. An estate passes completely tax-free to a spouse, along with the decedent's exemption.

SINGLES Taxable Estate Size	Estate Tax
$0 to $2 million	Zero
$2.0 million and up	46% of the amount over $2,000,000
COUPLES Taxable Estate Size	Estate Tax
$0 to $4.0 million	Zero
$4.0 million and up	46% of the amount over $4,000,000

Who pays the estate tax?
In 2006, the wealthiest 0.27% of Americans are the only ones who pay estate taxes. In 2001, over half of all estate taxes were paid by 3,502 people with estates larger than $5 million — representing the top 0.14% of all Americans. IPDW continues to fight for an end to this blantant and unacceptable discrimination.

How much does the estate tax raise every year?
In 2003, the estate tax is estimated to have raised $20 billion. Several cabinet departments — including Labor, Commerce, Agriculture, and Interior — each have discretionary budgets equal to or smaller than $20 billion.

If no changes are made, what will happen to the estate tax?
Under current law, the estate tax will be gradually phased out until the year 2010, when it will disappear entirely. Then, in 2011, the estate tax repeal “sunsets,” which means that the estate tax comes back into force, with the same $1 million exemption and 55% top rate it had in 2001. This convoluted “sunset” process was set up to artificially limit the total cost of the estate tax repeal. Currently, our pro-repeal network are lobbying to permanently repeal the estate tax between now and the “sunset” clause. Unfortunately, supporters of estate tax reform continue to defeat repeal. We have pressured several in Congress to take up this issue in the fall of 2007.

What do average Americans think about repealing the estate tax?
American, known for being unreasonable on this and other issues, are against it.** A Jan. 2006 poll of 1,026 adults 18 and over found that 71 percent of respondents were "concerned" or "very concerned" about the current federal deficit. 69% viewed keeping the estate tax on estates over $2 million as the best of eight possible ways to reduce the deficit.

A 2005 poll found that when voters hear all the facts about the estate tax, 69% favor reform and only 22% favor repeal. This includes 64% of Republicans, 72% of Independents, and 66% who own a farm or business. Apparently Americans would prefer to spend the revenue on other priorities rather than repealing the estate tax. 73% prefer to spend the money on Social Security solvency; 67% prefer spending the money on K-12 education; and 56% prefer spending the money on homeland security.

A survey conducted in May 2002 found that when voters hear all the facts about the estate tax, 67% support reforming the tax, while only 27% support repealing it.

** Keep in mind that these are only selective polls and subject to manipulation. For instance, none of our peers recall being surveyed. These "pollsters" made thousands of calls, none of them were able to reach anyone we know on any of their many phones, be it at the mansion, yacht, fourth home or private jet.

Why is it important to repeal, rather than reform, the estate tax?
If we repeal the estate tax, the burden of paying for public services will shift to low- and middle-income taxpayers. States will lose billions of dollars in revenue, since many states get a credit from the estate tax. Giant new tax loopholes will appear, permitting the very wealthy to avoid capital gains taxes and other taxes we now pay. Overall, repealing rather than reforming the estate tax will further concentrate economic and political power in the hands of the richest 0.1% of American families. What's not to love?

Why we fight reform of the estate tax?
Anti-repeal forces want to set the basic exemption at $2 million ($4 million for couples). Though this reform would exempt about 99.7% of the households in the US, it excludes the most vulnerable. Proposals like this have been offered in Congress since 2000. But our pro-repeal lobby has voted to completely oppose them. Put simply, we must keep smaller millionaires, family farmers, and small business people in limbo in order to win complete repeal for the ultra-wealthy.

* Some of the above is sourced from those those book-reading, rabble-rousing, justice-lovin' yahoos (or fudy duddies) over at Fair Economy