[IMC-Boston-Editorial] Share of Estates Taxed Hits New Low in 2006

[Christina Kasica]

Press Release
For immediate release-January 19, 2006
Contact: Christina Kasica, 617-423-2148, ext. 119
  (cell phone 617-966-0554)


2006 ESTATE TAX TO AFFECT FRACTION OF ONE PERCENT
          OF ALL ESTATES, A NEW LOW

SENATE EXPECTED TO CONSIDER REPEAL EARLY IN YEAR

BOSTON- New information released today by United for a Fair Economy (UFE)
indicates that the rise in the estate tax exemption level from $1.5 million
per person to $2 million ($4 million per couple) means that less than one
third of one percent of all U.S. estates-- or 0.27%-- will be affected by
the federal estate tax in 2006.

All other estates, or 99.23%, will be able to pass on 100% of their assets
to heirs tax-free. Out of an estimated 2.3 million deaths in 2006, an
estimated 6,343 estates will pay the tax.  The share of estates taxed will
fall to 0.16% in 2009, when the exemption rises to $3.5 million.

"Given the growing wealth divide, the principle of taxing multi-million
dollar inheritances is important for our democracy," said Lee Farris, Senior
Organizer for Estate Tax Policy at UFE.  "Those who have been most fortunate
in amassing wealth in our country should return a portion to the nation,
since in many ways they have benefited the most from our American way of
life."

The Senate is expected to attempt to repeal the federal estate tax in the
first several months of 2006.  The House of Representatives passed a repeal
measure in April 2005.

Repealing the estate tax would cost the U.S. Treasury $1 trillion over the
first ten years of full repeal.  "At a time when Hurricane Katrina has
raised the veil on the ugly specter of American inequality, it's wrong to
pull so much money out of the federal budget to benefit a few members of the
super-rich," said Farris.  "We need this revenue for more important things,
such as rebuilding New Orleans and reducing the budget deficit."

If Senate sponsors of the repeal bill determine that there is not enough
support to pass the measure, they are likely to propose a dramatic rise in
the exemption level and a lowering of the estate tax rate, currently set at
46%.  "Gutting the estate tax by setting exemptions higher than $2 million
with very low rates would constitute virtual repeal," Farris stated.  "This
would cause many of the same problems as full repeal."

Additional information is available in UFE's new background report entitled
"Share of Estates Taxed Falls to Fraction of One Percent," available at
http://faireconomy.org/reports/2006/estate_tax_share_falls.pdf.  Lee Farris
is available for comment or interview by calling 617-423-2148 ext. 119, or
emailing ckasica at faireconomy.org.


United for a Fair Economy (www.faireconomy.org) is a national non-partisan
non-profit that spotlights the growing economic divide in the U.S.

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