Super-Rich to Congress: Tax Us When We’re Dead
We’ve heard from plenty of millionaires asking for higher taxes on their incomes. Now, some of the super-rich are asking for higher taxes on their deaths.
A group of 25 entrepreneurs, politicians, academics and wealthy heirs have sent a letter to Congress called “A Responsible Estate Tax Proposal.” The letter says that the estate tax is critical to support the country and prevent the rise of powerful family dynasties. They say the tax should be raised to 45 percent and should hit estates valued at $ 2 million or more, which is more aggressive than the current tax or President Obama’s proposal.
The group includes Warren Buffett; Vanguard founder John Bogle; former Treasury Secretary Robert Rubin; Robert Crandall, the former CEO of American Airlines; billionaire investor George Soros; TV impresario Norman Lear; Richard Rockefeller; Abigail Disney and Garrett Gruener, the founder of Ask.Com. Former President Jimmy Carter also signed.
(Read more: Estate Tax Is Also on the ‘Cliff)
The group was put together by the United for a Fair Economy, a left-leaning advocacy group.
“We believe it is right to have a significant tax on large estates when they are passed on to the next generation,” the letter states. “We believe it is right, morally and economically, and that an estate tax promotes democracy by slowing the concentration of wealth and power.”
The letter comes amid growing debate over the estate tax as part of the talks to avoid the fiscal cliff.
The current estate tax is 35 percent on estates valued at $ 5 million or more (known as the exemption). If the Bush tax cuts expire as part of the fiscal cliff, the estate tax reverts to its previous level of 55 percent with an exemption of $ 1 million or more.
Many Republicans and some Democrats want the current estate tax levels to be made permanent. President Obama has proposed that the estate tax be set 45 percent with an exemption of $ 3.5 million.
The proposal from the “Responsible Estate Tax” group underscores the growing dissent even among Democrats around a solution to the estate tax. Any deal to avert the fiscal cliff will have to include a resolution to the estate tax. (Read more: Beating the ‘Dividend Cliff’)
Yet all sides remain far apart. The tax has long been a contentious issue in Congress, with many Republicans and some Democrats saying it hurts farmers and small businesses.