The Patriotic Millionaires for Fiscal Strength, a coalition of more than 200 individuals earning more than $1 million a year or holding over $5 million in assets, is calling on Congress to reject the current proposal aimed at repealing the estate tax.
According to the Congressional Budget Office, the current estate tax is projected to generate about $246 billion dollars over the next ten years, funding that is direly needed to strengthen our economy and to maintain a level playing field in the face of growing income inequality.
“Not taxing huge concentrations of wealth at fair rates is not only at odds with America’s history of progressive taxation and unfair to taxpayers who will be forced to make up the difference,” stated Guy Saperstein, Patriotic Millionaire and former CEO, “It is undermining democracy and promoting a wealthy aristocracy more suited to 19th century Europe than 21st century America.”
The estate tax only directly impacts an extreme minority of Americans, exclusively multi-millionaires and billionaires. Under the current policy, 99.8% of deaths do not trigger federal estate taxes and only about 20 small businesses and small family farms were obligated to pay this tax in 2013.
“Members of Congress who want to repeal the estate tax think that purpose of government is to promote a nation with two separate classes, those who come from permanently wealthy families, and the rest of us,” commented Morris Pearl, former BlackRock Inc. managing director who recently appeared on The Daily Show discussing the failure of trickle down economics, “Small businesses depend on a vibrant middle class with many people who can afford to spend money. Very few businesses can survive when all excess wealth is concentrated in a few families.”
Not only should Congress oppose efforts to repeal the current tax, they should work to strengthen it. The current structure allows heirs to wealthy fortunes to inherit up to $10.8 million in unearned income without having to pay a single cent in taxes. The Patriotic millionaires advocate lowering this threshold to $3.5 million per individual ($7 million for married couples) and increasing the top estate tax rate from the current 40% to 45%. By implementing these sensible and fiscally responsible changes, 99.7% of Americans would remain exempt and we would generate an additional $214 billion in revenue over the next ten years. This is revenue that could be immediately put to work funding the social safety net and improving our national infrastructure.
“The dumbest thing we could do, with inequality soaring and our infrastructure crumbling, is cut — let alone eliminate – the tax on billionheirs,” commented Andrew Tobias, author of The Only Investment Guide You’ll Ever Need, “Doing so would either add to our deficit or shift the burden onto less wealthy – and living – people.”
Retaining and strengthening our nation’s estate tax is not only sound policy, it is also a popular one. A recent nationwide Pew Research Center poll revealed that 61% of Americans believe the wealthy are not paying their fair share of taxes. The Patriotic Millionaires are urging Congress to reject attempts to repeal the estate tax and instead move in the opposite direction by strengthening it and, by extension, strengthening our economy.