[IMC-Boston-Editorial] Will Working Poor Have to Pay For Gutting the Estate Tax?

[tax press room]

From: Christina Kasica <taxpressroom at faireconomy.org>
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BAD ESTATE TAX LEGISLATION FACES SENATE VOTE THIS WEEK
Will Working Poor Have to Pay For Gutting the Estate Tax?

"If HR 5970 passes, millions of low-wage workers will get a long overdue
increase in pay. But they will lose their share of the $750 billion of lost
revenue from the latest attempt to pass a Paris Hilton benefit act - a
massive 75% cut in the estate tax. This will only expand the already
alarming economic inequality in our country. We cannot let that happen,"
said Meizhu Lui, executive director of United for a Fair Economy (see longer
statement at http://www.faireconomy.org/press/2006/statement_meizhu).

Refusing to accept repeated Senate rebuffs, Senate Majority Leader Frist
will try this week to cram through yet another attempt to chop $750 billion
out of much-needed tax revenues.

"This is an outrage against economic fairness and another cynical attempt by
Senate leaders to push through legislation that the Senate has said no to
time and again. This proposal would gut up to 80% of estate tax revenues,"
said Chuck Collins, senior fellow at United for a Fair Economy. "HR 5970 is
not a compromise proposal. It's virtually the same bad legislation that was
defeated less than two months ago."

"People around the US from all walks of life realize that our country can't
afford this proposal, " said Lee Farris, senior organizer for estate tax
policy at United for a Fair Economy. "People are mobilizing in all 50 states
to let senators know this is an unacceptable proposal. To reduce economic
inequality, Congress should keep the estate tax at more reasonable levels,
and pass a separate minimum wage increase."

HR 5970, passed by the House in the early hours of July 29, will likely come
before the Senate on Friday and will require 60 votes to pass procedurally.
The bill is designed to entice resistant senators in Washington state,
Louisiana and Arkansas with carefully crafted pork barrel provisions and to
attract additional Democratic support by incorporating popular extensions to
middle-class tax cuts and a minimum wage hike of $2.10 per hour.

Passage of HR 5970 would potentially add an average of $1,200 a year to
low-wage paychecks, and at the same time gift a whopping $1.3 million on
average to the heirs of each of the approximately 8,200 estates benefited
each year by slashing the estate tax.

Chuck Collins, Lee Farris and Meizhu Lui from United for a Fair Economy are
available to comment on the implications of the estate tax reduction
proposal.

United for a Fair Economy (www.faireconomy.org) is a national, non-partisan,
nonprofit organization that spotlights the growing economic divide in the
United States.

Contact: Christina Kasica, 617-423-2148 ext 119 or 617-966-0554

A RECENT HISTORY OF ESTATE TAX REPEAL/REDUCTION

* September 7, 2005-The Senate postpones a vote on full repeal of the
federal estate tax in order to deal with the devastation caused by Hurricane
Katrina

* June 8, 2006-The Senate rejects a motion to vote on full repeal of the
estate tax

* June 22, 2006-At Sen. Frist's request, the House Ways and Means Chair,
Rep. Bill Thomas (R-CA), creates a compromise estate tax bill that would
cost 75% of full repeal.  The House passes the bill, but not enough Senate
votes can be assured so Frist never presents it.

* July 28-29, 2006-The House passes yet another estate tax bill, HR 5970,
costing 75-80% of full repeal.  This bill also contains a proposed rise in
the minimum wage, some popular tax extenders, and a number of pork barrel
provisions to entice senators who are wobbling on estate tax reduction.

* August 4, 2006-The Senate is expected to vote on the pork barrel estate
tax reduction bill, HR 5970.


ESTATE TAX FACTS

* In 2006, the estate tax exemption is $2 million per individual and $4
million per couple.  Just one in 370 of all estates, or 0.27%, will pay the
estate tax in 2006.

* In 2009, under current law the estate tax exemption will be $3.5 million
per individual and $7 million per couple.  One in 600 estates, or 0.16%,
will pay the estate tax in 2009.

* Estate tax reduction proposals are estimated to cost up to 80% of the cost
of full repeal---$800 billion as opposed to $1 trillion over a ten-year
period.

* In order to mask the full cost impact of repeal when the last reduction
was passed in 2001, Congress enacted a law that allows for full repeal for
only one year (2010) and then re-instates the estate tax at 2000 levels in
2011.

* A recent report entitled "Spending Millions to Save Billions: the Campaign
of the Super Wealthy to Kill the Estate Tax," revealed that 18 families
bankrolled a 10-year PR and lobbying campaign that spread deceptions about
the tax to encourage support for repeal.  See the full report at:
http://www.faireconomy.org/reports/2006/EstateTaxFinal.pdf


Contact: Christina Kasica, 617-423-2148 ext 119 or 617-966-0554