Target: President Barack Obama
Goal: Lower the current inheritance tax exemption from $5 million to the 2009 level of $3.5 million.
Rich people in the U.S. can currently gift up to $5 million to their children without paying a single dollar in taxes on that amount, making it easier for the richest people in the nation to pass along their wealth from generation to generation without paying their fair share in taxes. This is up from $3.5 million in 2009.
Congress first passed an estate tax in 1797, at a time of national emergency, and did so again during the Civil War. Our Founding Fathers were very much in favor of an estate tax. The Federalist Papers, a collection of their correspondence, records their concerns about the need for an estate tax to prevent the creation of a new aristocracy. They wanted a country where people had more opportunity, outside of class, and they were certain the biggest threat to democracy was inheritance if estates weren’t taxed before they passed to heirs. They were right. We have a home-grown aristocracy with an insatiable appetite for money.
In 2007, before the Great Recession, the top 20 percent of Americans owned 85 percent of the country’s wealth and the bottom 80 percent of the population owned 15 percent. If that weren’t bad enough, after the Great Recession, wealth owned by the top 20 percent of Americans grew from 85 percent to 87.7 percent, leaving even less for those below. When the recession ended, it was clear all profit had flowed to the top because 1 percent of the population saw their wealth swell from 34.6 percent to 37.1 percent. By 2011, the 400 wealthiest Americans had “more wealth than half of all Americans combined” and 60 percent of those people started life with substantial privilege.
In 2010, when George W. Bush’s estate tax suspension was sunsetted–it was scheduled to return at a 55 percent rate with a $1 million exemption. If President Obama had done nothing, that’s what would have happened. However, as part of a much larger, negotiated package, President Obama offered the 2009 level of 45 percent at $3.5 million. Unfortunately, he ended up settling for 35 percent at $5 million. That’s $5 million inheritance, tax free.
Why are people confused about the fact that wealth inequality in the United States is the widest in our history? The majority of people have so little disposable income that our growth remains sluggish years after the recession supposedly ended. At the least, we must have a more reasonable estate tax. Sign to demand that the inheritance tax go back to the 2009 level of 45 percent at $3.5 million.
Dear President Obama,
The dangers of extreme inequality in wealth keep multiplying. Many people work multiple jobs and cannot feed their families without government benefits which, in effect, subsidizes giant corporations with taxpayer dollars. We can’t shake the effects of the Great Recession because most people still don’t have much disposable income years after the recession supposedly ended.
The biggest protection we have from falling into a full scale government of, by and for the wealthy is an estate tax, but what we have allows $5 million to be passed tax free. George W. Bush suspended the estate tax and when that sunsetted, new concessions moved it from a 55 percent rate with a $1 million exemption to a 35 percent rate with a $5 million exemption.
This is ridiculous. We’ve created a new and insatiable aristocracy that is swallowing the rest of us. Our politics are dominated by money and, if money equals speech, most of us don’t have any speech. We must, at least, tax a higher percentage of estates. At the very least, we should go back to the 2009 level of 45 percent at $3.5 million.
[Your Name Here]
Photo Credit: Stephen Ewen