Legislative Action Message

Act now for fair and progressive taxation and needed revenue--FCNL

What can the Senate leadership possibly be thinking? The Senate is expected to consider eliminating the estate and gift tax later in July, a tax cut that would primarily benefit only the wealthiest few.
And, they are considering this when:

the federal debt is expected to keep growing as far as the eye can see;

the Medicare trust fund is already facing huge deficits in the years ahead;

programs that serve the poor and protect the environment are facing budget cuts;

millions lack access to quality, affordable housing, health care, child care and nutrition;

and the costs of the ongoing wars are continuing to mount.


The House already passed this unwise and unfair legislation in April (H.R. 8).

Your voice is needed now to make sure the Senate does not make the same mistake.

Act Now Please contact your senators. Urge them to oppose repealing the estate and gift tax or any so-called "compromise" that would dramatically reduce estate and gift taxes for the wealthiest. Repealing this tax would be unwise and unfair, further shifting the tax burden from the wealthiest to working families.

FCNL makes it easy to contact your senators by allowing you to send a message directly from our web site. Be sure to personalize the sample letter to include your own views. You may also wish to describe how this tax cut would affect you and your community.

Background

This is no time for Congress to be considering more tax cuts for the wealthiest.

The congressional Joint Committee on Taxation estimates that the cost of repealing the estate and gift tax would be $290 billion between 2006 and 2015. However, the cost of repeal would increase sharply after 2012. From 2012 to 2021, the cost would be almost $1 trillion when additional interest on the national debt is factored in, according to the Center on Budget and Policy Priorities (CBPP).

Repealing the estate tax would benefit only a very small number of very wealthy heirs – less than two percent. Today, estates valued at less than $1.5 million are not taxed at all ($3 million for a couple), and, by 2009, only the value of estates exceeding $3.5 million will be taxed ($7 million for a couple) according to CBPP.

If the 2009 exemption level ($3.5 million for individuals and $7.0 million for couples) were made permanent, by 2011, only an estimated 8,500 estates would be subject to the tax, affecting the estates of only 0.3 percent of the number of people who are expected to die that year, according to the Urban Institute-Brookings Institution Tax Policy Center and CBPP. This exemption level is sufficient to exclude almost all small businesses and farms from any estate tax.

The Congressional Budget Office estimates the federal debt will grow by $1 trillion over the next 10 years under current policies. Add the anticipated costs of additional tax cut extensions, correcting the alternative minimum tax, and the ongoing wars in Iraq and Afghanistan, and the debt will grow $4.1 trillion by 2015, according to the CBPP.

The Medicare Health Insurance trust fund paid out more than it received in tax revenues beginning in 2004, according to the Social Security Administration Trustees. Expenditures are expected to exceed revenues at an accelerating rate of growth as far as the eye can see unless Congress intervenes to raise revenues, cut benefits, or control costs. The Social Security trust fund faces a similar future about 15 years from now.

In the recently enacted congressional budget resolution for fiscal year 2006 (FY06), Congress directed key authorizing committees to cut mandatory spending by $35 billion over the next five years. Food stamps and Medicaid, the health care program for the poor and elderly, are being threatened with cuts, despite the fact that millions of eligible poor still go hungry and lack quality, affordable health care.

The FY06 budget resolution also calls for cutting funding for domestic discretionary programs in FY06 by $13 billion below last year’s levels (adjusted for inflation) and by a total of $158 billion between FY06 and FY10. According to the CBPP, pending FY06 appropriations bills would cut programs such as education for low-income children, community service block grants, low-income home energy assistance, job training, child care block grants, and state grants to enforce the Clean Air and Clean Water acts.

Meanwhile, the U.S. has already spent more than $300 billion waging the "war on terror," the war in Iraq, and associated reconstruction and security measures. Congress has spent this money while at the same time cutting taxes deeply. Under even the most optimistic scenario, the future cost of the ongoing wars is likely to exceed another $150 billion to $200 billion, according to a House Budget Committee Democratic Staff study.

Where are fairness and compassion for the poor and most vulnerable in this? Where is the fiscal prudence? When will Congress stop deferring our country’s debts to future generations?
We at FCNL are concerned about the unprecedented disparity in income and wealth between the rich and the poor today. We believe that the wealthiest, those who have prospered the most from living in our society, have the greatest responsibility to contribute to the common good through a progressive tax structure. We also believe that Congress has a responsibility to assure that there is sufficient revenue to address pressing human needs and to meet social and environmental challenges at home and abroad.

The estate and gift tax advances each of these values. It is fair, and it provides much needed revenue. The value of most estates is well below the taxable threshold, and the vast majority of the tax is paid by a relatively few very wealthy estates.

This is no time for more tax cuts for the wealthiest. Repealing this tax would reflect poor stewardship of the public trust and the common good.
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________________________________________

Friends Committee on National Legislation
245 Second St. NE,
Washington, DC 20002-5795

fcnl@fcnl.org * www.fcnl.org

phone: (202)547-6000 * toll-free: (800)630-1330

We seek a world free of war and the threat of war
We seek a society with equity and justice for all
We seek a community where every person's potential may be fulfilled
We seek an earth restored.