Carper Introduces Bill to Fix Estate Tax Bill is Fairer, More Fiscally Reasonable than GOP-backed Alternative
WASHINGTON (June 8, 2006) – Following the Senate’s defeat Thursday of a Republican-backed bill to permanently repeal the estate tax, Sen. Tom Carper, D-Del., introduced alternative legislation that he said would exempt most families, farms and small businesses from the tax, while still being fiscally responsible. Under current law, the estate tax is currently being phased out and will be fully repealed in 2010. However, just one year later, in 2011, the estate tax will be reinstated at its original levels (a 55 percent rate on all single-person estates worth more than $1 million). This week on the Senate floor, Republicans tried to force a debate on legislation that would permanently repeal the estate tax, but that maneuver was rejected Thursday on a procedural vote after many Democrats, including Carper, said it was too expensive given our current era of budget deficits. Instead, Carper urged leaders to find a middle-ground on the issue. “We can’t just let the estate tax go back into effect, but as long as we are running huge budget deficits we can’t afford a full repeal of the tax either,” said Carper. “There’s a way that we can fix the estate tax and make it fairer for families, farms and small businesses, while making sure it costs our Treasury far less than a full repeal.” The legislation Carper introduced Thursday would begin by freezing the estate tax at its projected 2009 levels — any estate valued at more than $3.5 million per individual or $7 million per couple would be taxed at a 45 percent rate. Those levels would then be adjusted upward with inflation. Carper said that approach was a fair way of handling the issue and would cost roughly half as much as legislation making the repeal permanent. Under the Carper legislation, only 2 estates out of every 1000 would be subject to the estate tax. That amounts to about 7,000 estates each year, compared to 50,000 that were being taxed back in 2001 when the tax started being phased out. “Rather than giving up on finding a solution to the estate tax dilemma, I hope my colleagues will see this proposal as an acceptable middle ground and we can reconsider the estate tax issue sometime this year,” said Carper.