News release this morning from Sen. Lincoln's office on jump. She says it's time to protect farmers. Right.
Update: Blog reader Stephen Koch (no relation to billionaire David mentioned below) alerts us to this article in Talking Points Memo on the position taken by Lincoln's pal on the estate tax proposal, Minority Whip Jon Kyle, and other Repubs that tax cuts generate money for the treasury and don't need to be paid for, but extending unemployment benefits don't and do.
Please note that the cut in the top estate tax, from 45 to 35 percent, will be worth a cool $9 billion at current values to just the top five Walton estates. 9 BILLION. Who'll pay for that lost revenue (not just from Waltons but Kochs, etc.) over the years? The working schlubs, that's who.
Lincoln, Kyl Introduce Estate Tax Reform Proposal
Washington, D.C. — U.S. Senators Blanche Lincoln (D-Ark.) and Jon Kyl (R-Ariz.) introduced late Tuesday a proposal to permanently reform the federal estate tax.
The proposal would require the Senate Finance Committee to amend H.R. 5297, the Small Business Lending bill, to permanently set the estate tax rate at 35 percent, with a $5 million exemption amount phased in over 10 years and indexed for inflation. It would also provide a “stepped up basis” for inherited assets.
“It’s time to take decisive action on the estate tax, and provide the permanent solution that Arkansas’s hardworking farmers and small businesses are desperately seeking,” Lincoln said. “Uncertainty in the estate tax law has caused incredible difficulties for these individuals, which is why I have fought for a quick resolution to the issue that is both permanent and fair. One way to improve upon an already strong legislative initiative that includes tax incentives and a number of other benefits for small businesses is to ensure that we reach a permanent solution on the estate tax to provide small business owners and famers with the certainty they need.”
“If the Small Business Lending bill is intended to help small business create jobs, wouldn’t it make sense to provide small business owners with the certainty that their tax rates aren’t going to skyrocket at the beginning of next year?” said Kyl. “In just six short months, American taxpayers will face the largest tax hike in history unless Congress acts. It is estimated that more than a half million American families will pay the estate tax over the next decade, and the lack of congressional action creates a tremendous amount of uncertainty for these families, small-business owners, and farmers. This uncertainty is one of several factors acting to prevent a strong economic recovery from taking hold.”
The Lincoln-Kyl proposal provides an election for deceased taxpayers to either retain this year’s estate tax rate, which is zero percent with “carry over basis,” or file under the provisions of the new bill.
Their proposal also instructs the Senate Finance Committee to offset the difference in revenue loss between the Obama administration’s proposed 45 percent estate tax rate with a $3.5 million exemption amount and their proposed reform.
If Congress does not act this year, the federal estate tax is scheduled to increase to 55 percent with only a $1 million exemption at the beginning of 2011.
Senators Lincoln and Kyl introduced a similar measure in April 2009 that received broad bipartisan support and was successfully added to the non-binding congressional budget resolution.