Sens. Carper & Voinovich Introduce Bipartisan Bill To Fix Estate Tax
Senators' Legislation Provides Certainty & Fairness, While Being More Fiscally Responsible
WASHINGTON – Sens. Tom Carper (D-Del.) and George V. Voinovich (R-Ohio) today reintroduced fiscally responsible bipartisan legislation to exempt families, farms and small businesses from the estate tax burden.
The legislation, which also reflects proposals advocated by President Obama, would freeze the estate tax at its current 2009 levels. Under the bill, the value of any estate above $7 million per couple or $3.5 million per individual will be taxed at a 45 percent rate. That rate will remain constant, while exclusion amounts will be adjusted upward each year to account for inflation.
To make this estate tax bill fiscally responsible, it includes a Sense of the Senate resolution that calls for the cost of the Carper-Voinovich bill to be completely offset, consistent with Congress’ commitment to pay-as-you-go rules.
“For the sake of families and small businesses, we can’t let the estate tax go back into full effect, and yet as long as we are running huge budget deficits we can’t afford full repeal, either. That’s why our commonsense solution would cost roughly three-fifths as much as legislation making the repeal permanent,” said Sen. Carper. “Rather than giving up on finding a solution to the estate tax dilemma, I hope other senators from both sides of the aisle will see our proposal as a good middle ground where we can fix the estate tax and provide greater certainty to farms and small businesses, while costing the federal treasury far less than more expensive estate tax options.”
“With the many challenges Ohio families and businesses face today, reform to estate tax law is needed now more than ever,” Sen. Voinovich said. “This legislation will give Americans certainty as they look towards their futures.”
Under the Carper-Voinovich legislation, only three estates out of every 1,000 would be subject to the estate tax. That amounts to fewer than 11,000 estates by 2012, compared to a much larger 50,000 estates that were being taxed back in 2001 when the tax started being phased out.
Under current law, the estate tax is being phased out and will be fully repealed in 2010.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 rate of 55 percent for singles with estates worth more than $1 million.
In recent years, several legislators have introduced bills that would provide a much higher income exclusion and a much lower rate, or would completely and permanently repeal the estate tax altogether. However, a number of these proposals have been rejected by many senators, including Sens. Carper and Voinovich, who have said a complete repeal of the federal estate tax is too expensive given the nation’s severe budget deficit. Instead, Sens. Carper and Voinovich have urged leaders to find a middle-ground on the issue, which they believe is found in their bipartisan bill.
The Carper-Voinovich proposal is similar to a proposal the two senators introduced last year and to provisions included in a broader, middle-class tax bill introduced by Senate Finance Committee Chairman Max Baucus (D-Mont.), in March of this year.