Dangerous Death Tax Plan Offered in the Senate
Curtis Dubay /
Senators Sanders (I-VT), Harkin (D-IA) and Whitehouse (D-RI) are circulating a bill that would drastically increase the death tax at the worst possible time: such a policy move would be a body blow to a weakly recovering economy and would clearly signal to everyone that this Congress has no intention of breathing new life into the American dream.
The death tax is currently expired for 2010. The repeal of the death tax was a decade-long policy first brought into law with the 2001 tax relief package. That legislation phased down the death tax through 2009 before repealing it in 2010. But because the tax relief was passed under budget reconciliation rules, the policy to repeal the death tax could not apply outside a 10 year budget window. As a result current law has always shown the death tax coming back to life in 2011.
If Congress does nothing and the death tax does rise from the dead next year it will come back with a punitive rate of 55 percent and exemption of $1 million ($2 million for couples), enough by itself seriously to slow the recovery. This draconian tax rate and less-than-generous exemption level is not enough for Senators Sanders, Harkin and Whitehouse, however. (more…)