A group of prominent millionaires and billionaires wants to preserve the estate tax and proposes stricter guidelines than even those of the Obama administration. Bill Gates Senior, Warren Buffett, former Treasury Secretary Robert Rubin, Richard Rockefeller and Abigail Disney are among those signing onto the plan.
Their proposal would make the estate tax exemption $4Million per couple with a graduating tax rate of 45 to 55%. By contrast, Obama’s plan would revert back to 2009: $7Mill. Per couple exemption, 45% flat tax rate.
Michael Lapham, director of the Responsible Wealth Project with United for a Fair Economy, says the argument that family farms will be driven out of business is a ‘red herring’, “The reality is, only 40 small farms and businesses are expected to pay any estate tax in 2012, according to the Tax Policy Center. Those that would – would pay about 3.1% of the estate’s value, on average,” Lapham says. He adds, “We certainly don’t want to be harming small businesses and farms but we also don’t want to keep answering an argument that isn’t really based in fact.”
Brian Miller, director of United for a Fair Economy, says exempting farms from the estate tax is proven by economists to be a bad idea because it would cause a lot of very wealthy people to buy up farmland to shelter their wealth from death taxes. Miller says, “The effect of that would be to basically push up the price of farmland, push family farmers off their own land and turn them into tenants leasing land. I mean, it would just create some extremely unhealthy dynamics that would actually be more harmful to farmers than beneficial.” He adds there are provisions in the estate tax, such as paying it out over 15 years, that would make it manageable for farms and small businesses.
Abigail Disney, the granddaughter of Walt Disney, says paying her fair share is only right, “It’s only right and appropriate that I should pay a tax to repay society’s investment in making all that wealth accumulation possible. Not just the wealth my grandfather made in business but the wealth that I managed to build with the head-start my grandfather left me.”
The group is looking for a Senate sponsor. They say their estate tax plan will create much needed revenue to help bring down the federal deficit and avert the so-called Fiscal Cliff.