Estate Tax Plan Generous to Millionaires
The estate tax has been watered down to the point where only a few hundred Wisconsin estates paid the tax each year, according to a new report from Citizens for Tax Justice. President Obama has proposed making the estate tax rules that were in effect in 2009 permanent starting in 2013. If his proposal is passed into law, estates of individuals worth up to $3.5 million (effectively $7 million for a couple) would not pay any estate taxes, and the number of wealthy Wisconsin estates paying the tax would remain tiny.
The estate tax has been gradually phased out over the last decade, to the point which just 290 Wisconsin estates owed the tax in 2009, or about 1 out of every 167 estates. That’s down considerably from 2000, when 803 Wisconsin estates paid the tax, or 1 out of every 59 estates. In 2013 the tax is slated to return to its 2001 levels, with exemptions of $2 million per couple. Congress is unlikely to let that happen, and Obama has already started to propose alternatives.
The estate tax helps insure that very wealthy families pay back into the system that helped them amass that wealth. As CTJ describes it,
“The estate tax is a way of acknowledging that the wealthiest families benefit the most from the government’s protection of private property, public investments
like roads that make commerce possible and public schools that provide a productive workforce, the stability provided by our legal system and armed forces, and the countless other ways that government makes America a place where huge fortunes can be made and sustained. None of this would be possible without taxes, so it’s reasonable that the wealthiest families contribute more to support these public services.”
At a time when Congress is considering rolling back tax cuts for workers and discontinuing unemployment benefits, we can’t afford a tax break for multi-million dollar estates.