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  • Dangerous Death Tax Plan Offered in the Senate

    Senators Sanders (I-VT), Harkin (D-IA) and Whitehouse (D-RI) are circulating a bill that would drastically increase the death tax at the worst possible time: such a policy move would be a body blow to a weakly recovering economy and would clearly signal to everyone that this Congress has no intention of breathing new life into the American dream.

    The death tax is currently expired for 2010. The repeal of the death tax was a decade-long policy first brought into law with the 2001 tax relief package. That legislation phased down the death tax through 2009 before repealing it in 2010. But because the tax relief was passed under budget reconciliation rules, the policy to repeal the death tax could not apply outside a 10 year budget window. As a result current law has always shown the death tax coming back to life in 2011.

    If Congress does nothing and the death tax does rise from the dead next year it will come back with a punitive rate of 55 percent and exemption of $1 million ($2 million for couples), enough by itself seriously to slow the recovery. This draconian tax rate and less-than-generous exemption level is not enough for Senators Sanders, Harkin and Whitehouse, however.

    Their proposal would set the top rate at 65 percent for the largest estates. For smaller estates the rates would range from 45 percent to 55 percent. The first $3.5 million ($7 million for couples) would be exempt for the death tax.

    If the Senators’ plan became law, Americans that work hard, live a virtuous life, create jobs for other Americans and build wealth for their families would see a large majority of what they have built confiscated by a profligate government to be redistributed as seen fit by Washington. A death tax at such levels would certainly become the nightmare of the American dream.

    Not only would a death tax at those levels strike at the very heart of the American dream, it would also badly hurt the economy. A higher death tax would put more weight on the struggling economy and delay recovery further by reducing investment and therefore job creation. When economic recovery does finally occur, a higher death tax would mean that economic growth and job creation would remain permanently below where they otherwise would have been. For all their rhetoric about wanting to help the unemployed and aid economic recovery, with plans such as this Congress continues to compound the uncertainty that is keeping businesses from hiring.

    The Sanders, Harkin and Whitehouse plan is the worst death tax proposal in a long time. Dishearteningly, it could very well be in line with views of many in Congress. In fact, it has been obvious for a long time now that Congressional leadership does not want to do anything in regard to the death tax this year. That way, in just 6 short months, the death tax goes from 0 percent to 55 percent. While such a jump isn’t as much as proposed by Senators Sanders, Harking and Whitehouse, it is only slightly less bad. And it can be achieved by Congress doing nothing, which is much easier than passing something controversial like the Sanders, Harkin, Whitehouse plan.

    It is time for Congress to stop playing games with the death tax and repeal it once and for all time. The economy remains weak and job creation non-existent. Now is not the time to raise taxes, especially one like the death tax that has such a profound impact on job creation. Instead of threatening to destroy more jobs by increasing the death tax, Congress should repeal it permanently. Doing so would create 1.5 million jobs – a much needed and timely boost for the economy. Even more importantly, it would signal clearly that this country remains a land of economic opportunity for all who dream about a better life.

    Posted in Economics [slideshow_deploy]

    8 Responses to Dangerous Death Tax Plan Offered in the Senate

    1. Lannis Janssen says:

      Hopefully the pendulum will swing towards a more conservative group of Congressional leadership in November 2010 that will repeal the death tax during an early session in 2011..

    2. Kevin habib says:

      I have a hard time understanding your stance, and heritage's stance on this. The last 5 weeks all you have written about is the danger of debt and deficits and how it will lead America to turn into the next Greece…and NOW, you turn around and want the estate tax repealed?!?!

      The hypocrisy is amazing.

      99.7% of all estate would be exempt – would not pay a single dime – under the proposed rule.

      We saw what the tax laws passed in 2001 and 2003 have done to the budget – took the biggest projected surplus in history of country and left us with largest projected deficit…and now you want to go back to those.

      Utterly disturbing how you will stand up for billionaires, the top .3% of households, for the paris hilton in our world, and add hundreds of billions more to the deficits and debt, yet you oppose extending emergency unemployment insurance and emergency COBRA benefits for Americans who are out of work and trying to pay mortgage and pay for food and pay for gas and health needs – that would have added 30 billion to the debt and deficit.

      You can't have it both ways! You can't drone on and on about debts and deficits, then want the estate tax repealed. Mindblowing.

      Obviously, the sole care of heritage is the top 1% of americans.

    3. Pingback: » Financial News Update – 06/24/10 NoisyRoom.net: The Progressive Hunter

    4. Billie says:

      How is this of, for and by the people? What is the government reason for this?
      It will only be spent on more unconstitutional government corruption!

    5. Bill says:

      Conservatives believe if you earn your money honestly you deserve to keep your earnings, or at least most of it (they do believe in small Government). Progressives, socialists, democrats, communists and none workers believe if you earn it, they should take it from you. Conservatives believe people respond to incentives(potential for gain) to work hard and smart. And look what they have produced, the highest standard of living in the world for all their people. Even the poor of the US live better than 2/3 of the worlds population. The none conservatives believe they must knock down the hard workers, the employers, the successful. They do this with high taxes, profit killing regulations, high utilities, more unions and their general antibusiness agenda. But the old rule from thousands of years ago, “No profit No jobs” still applies. If you want to destroy a nation take away the profit. Think about it, would you work harder and accept greater risk for no potential gain? I mean really how many have you hired in the last 18 months? When someone says we have to raise taxes on the rich, it is code for we have to keep you down. Look around the US, there are very few new jobs, businesses closing and leaving, tens of millions of unemployed people, families scared and hungry, personal mental terror as moms, dads and children struggling to survive. And the NONE conservative agenda, KILLS JOBS…hurts people. All said with a smile, like it’s a path to good, but it has never worked anywhere, ever.

    6. EZEQUIEL GONZALEZ-AL says:

      THIS APPEAR TO BE ANOTHER STEP TOWARD SOCIALISM. WHAT THIS MEAN IS THAT AMERICANS WILL NO LONGER WORK HARD TO LEAVE THERE HARD EARNED MONEY TO HIS/HER HEIRS. BOTH HARKIN AND SANDERS CALL THEMSELVES SOCIALIST WHERE NO ONE SHOULD HAVE MORE THAN OTHERS. HOPE THAT RHERE WILL SOME CHANGES TO OUR GOVERNMENT IN WASHINGTON ON nOVEMBER 2010. IF NOT WE ARE HEADING TOWARD THE WRONG PATH,

    7. Harry Thompson says:

      These slugs, sanders, harkin, & whitehouse, denounce `tax cuts for the rich,` but they don`t hestitate to propose increased estate taxes on the rich.

      These same slugs, expose working Americans to the FICA Death Tax, that defrauds them of their hard-earned money, if they don`t live to collect any Socialist Insecurity benefits, or have no eligible survivors.

      No more FICA taxation, without representation.

    8. Joe, Los Angeles says:

      How pathetically short-sighted of you. So a short-term gain of some jobs is worth the tradeoff of the stability of our ENTIRE DEMOCRACY!?!?? Are you friggen INSANE??? If you let estates accumulate wealth forever, for all generations, eventually you get a few rich families controlling everything. Even a moron like you can see that. And when that happens, look no further than MEXICO and BRAZIL to see what that's like. Corruption everywhere. Monopolies in every market. Nonexistent competition, and stagnant growth.

      THAT is what you're advocating, and it is a pathetic short-sighted and dim-witted position. I can't flame you enough for this article. The richest among us are aware of the danger, (Gates, Buffet, and Rockefeller) and even they SUPPORT the estate tax.

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