Senate Democrats

DEMOCRATS FIGHT TO PUT MIDDLE CLASS PRIORITES AHEAD OF ESTATE TAX REPEAL

Washington, DC–Across the country, the American people are struggling under the weight of incompetent Bush Republican policies, and they are looking to the Congress for help. Democratic Senators Kent Conrad, Joe Lieberman, and Barack Obama today called on Bush Republicans in the Senate to put aside their partisan legislative agenda in favor of much-needed legislation to address the immediate priorities of the American people.

Gas prices are skyrocketing, health care costs are rising, and college tuition is fast becoming too expensive for middle-class families to afford. Unfortunately, in Washington, D.C., Bush Republicans aren’t paying attention. After devoting the Senate’s time to a constitutional amendment that even its supporters conceded had no hope of passage, Republicans in the Senate plan to provide $1 trillion in tax breaks to the very wealthiest Americans. Sadly, they plan to offer nothing for the majority of hardworking families who are struggling to get by. A fact check on the effects of full repeal of the estate tax is attached to this release.

“In Connecticut last week I heard from my constituents about the many real challenges they face today and about what they priorities they want us to tackle in Congress–surging gas prices, skyrocketing health care costs that are bankrupting families and businesses alike, an uncertain economic and employment climate, and increasing college tuition,” said Senator Lieberman. “Instead, the Republican Senate leadership is using up our legislative calendar to try to push through legislation to assure that the very wealthiest estates will get a multimillion dollar tax break.  This is exactly the kind of partisan, election year politics that has caused so many Americans, who want their elected representatives to tackle the problems that directly affect their lives, to lose faith in the direction of our government.” 

“Let’s call this trillion-dollar giveaway what it is – the Paris Hilton Tax Break,” said Senator Obama. “It’s about giving billions of dollars to billionaire heirs and heiresses at a time when American taxpayers just can’t afford it.”

Democrats believe the American people deserve better, and after five years of Bush Republican incompetence it’s time for a real change. Democrats have comprehensive plans to make America energy independent, to ensure our nation’s security, and to make health care and education affordable and accessible. Bush Republicans have shown that their priorities do not include the pressing concerns of the American people. It’s time for a new direction.

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THE BUSH REPUBLICAN PARIS HILTON TAX BREAK

Bush Republicans continue to focus on their wrong priorities by pursuing full repeal of the estate tax, a tax break for the Paris Hiltons of the world.  This unnecessary and expensive tax break for the very wealthiest Americans will cost $1 trillion in new debt in order to provide a tax break to those who don’t need it.

Estate Tax Repeal Will Create $1 Trillion in New Debt.  The Center on Budget and Policy Priorities has computed the cost of full repeal for the first full ten years it is effective.  “Making permanent the repeal of the estate tax after 2010 — as proposed by the President and as passed by the House last year — would add nearly $1 trillion to the deficit between fiscal years 2012 and 2021, the first ten years in which the full costs of extending repeal would be reflected in the budget.  This cost includes $776 billion of lost revenues and $213 billion of higher interest payments on the national debt.”  [Center on Budget and Policy Priorities, 6/5/06]  

Only a Small Number of Farms and Small Businesses Pay Any Estate Tax at All.  The Congressional Budget Office found that only a very small number of family farms and family-owned small businesses would pay any estate tax at all under the 2009 rate.  Only 123 family-owned farms and 135 family-owned small businesses would pay any estate tax at all under the $2 million exemption.  At the 2009 level of $3.5 million, those numbers will further decrease to 65 and 94, respectively.  [Congressional Budget Office, 7/05]

Reasonable Reform Protects All But the Most Wealthy Inheritors.  Estates don’t pay the estate tax until their net assets exceed the exemption levels.  For 2006, the exemption level is $2 million or $4 million for a couple.  Those exemptions will increase to $3.5 million, or $7 million per couple, in 2009.  At those levels, 99.7% of all estates would pay absolutely no estate tax.  [Congressional Budget Office, 7/05]

Small Businesses May Fare Worse Under Estate Tax Repeal.  Under the tax rules for small business, most will pay more tax under the repeal of the estate tax.  Today, inherited assets receive a stepped-up basis which reduces the income tax paid when heirs ultimately sell them.  Under repeal heirs will receive “carryover basis” in the assets they inherit which will increase the income tax they pay on any subsequent sale.  According to an analysis prepared by the Small Business Council of America, “in reality repeal of the estate tax will actually harm most small business owners because of the loss in the step-up in basis.”  [Small Business Council of America, 4/14/04]

18 Super Wealthy Families are Financing the Effort to Repeal the Estate Tax.  “The multimillion-dollar lobbying effort to repeal the federal estate tax has been aggressively led by 18 super-wealthy families, according to a report released today by Public Citizen and United for a Fair Economy at a press conference in Washington, D.C. The report details for the first time the vast money, influence and deceptive marketing techniques behind the rhetoric in the campaign to repeal the tax.  It reveals how 18 families worth a total of $185.5 billion have financed and coordinated a 10-year effort to repeal the estate tax, a move that would collectively net them a windfall of $71.6 billion.”  [Public Citizen and United for a Fair Economy, 4/06]

Bush’s Cabinet and Oil Company CEOs to Reap Huge Windfall in Estate Tax Repeal. 

OIL COMPANY CEOs

Name

Company

Net Worth of Estate

Tax Savings from Repeal of Estate Tax

Lee R. Raymond

ExxonMobil (Retired)

$633 million

$164 million

Rex W. Tillerson

ExxonMobil

$36 million

$12 million

James J. Mulva

ConocoPhillips

$36 million

$12 million

William R. Klesse

Valero Energy

$35 million

$11 million

Clarence P. Cazalot Jr

Marathon Oil

$28 million

$9 million

David J. O’Reilly

Chevron Corp.

$10 million

$3 million

Total

 

$778 million

$211 million

[House Committee on Government Reform, Minority Report, 5/30/06]

BUSH CABINET

Name

Position

Estimated Net Worth

Estimated Tax Savings

George W. Bush

President

$3 million – $12.9 million

$787,193 – $6.2 million

Dick Cheney

Vice President

$23.9 million – $111.3 million

$12.6 million – $60.7 million

Donald Rumsfeld

Sec. of Defense

$58.8 million – $185.1 million

$31.8 million – $101.3 million

John Snow

Sec. of Treasury

$42.7 million – $128 million

$22.9 million – $69.8 million

Samuel Bodman

Sec. of Energy

$19.6 million – $82.2 million

$10.2 million – $44.7 million

Carlos Gutierrez

Sec. of Commerce

$18.3 million – $84.8 million

$9.5 million – $46.1 million

Jim Nicholson

Sec. of VA

$6.4 million – $20.3 million

$2.6 million – $10.6 million

Michael Chertoff

Sec. of DHS

$2.1 million – $5.2 million

$373,708 – $2.0 million

Elaine Chao

Sec. of Labor

$1.5 million – $3.3 million

$158,927 – $925,350

Mike Johanns

Sec. of Agriculture

$1.5 million – $3.4 million

$152,068 – $966,020

Condoleezza Rice

Sec. of State

$1.2 million – $2.6 million

$56,087 – $616,550

Michael Leavitt6

Sec. of HHS

$949,011 – $2.1 million

$0 – $370,400

Alphonso Jackson5

Sec. of HUD

$864,015 – $2 million

$0 – $291,590

Total

 

$181 million – $643 million

$91 million – $344 million

[House Committee on Government Reform, Minority Report, 5/06]

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