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UPDATE: House Votes to Make Estate Tax Repeal Permanent (Posted 4/14/2005)Late yesterday (April 13), the U.S. House of Representatives voted 272-162 to pass H.R. 8, a measure to permanently repeal the estate tax. Earlier in the day, efforts to substitute an amendment failed that would have raised the estate tax threshold while keeping the tax intact. Voting IN FAVOR of H.R. 8 were Reps. Ferguson, Frelinghuysen, Garrett, LoBiondo, Saxton and Smith. Voting AGAINST were Reps. Andrews, Holt, Mendendez, Pallone, Pascrell, Payne, and Rothman. If your Representative voted AGAINST H.R. 8, please take a moment to thank him for his stand on the issue. Contact information appears below. The issue now moves to the Senate, where, according to some reports, the vote could be very close. Please watch your email or the Center's web site at www.njnonprofits.org for additional updates and action alerts. If you are not on the Center's e-mail list to receive news about advocacy issues and upcoming events, e-mail us to request to be added. We will never share your e-mail address with anyone. To read the Center's sample letter on the estate tax, click here. For more information on the estate tax, see the web resources below, or contact Linda Czipo at the Center. Background on the Estate Tax A gradual repeal of the federal estate tax was enacted as part of sweeping tax cut legislation signed into law by President Bush in June of 2001. Under the current law, estates valued at below $1.5 million are not subject to the estate tax. This exemption level will rise incrementally each year until it reaches $3.5 million ($7 million for couples) by 2009. Simultaneously, the rate of taxation for taxable estates will be lowered each year and the top rate will be 45% by 2007. Because of a sunset provision in the current law, by 2010 the tax will be repealed entirely - but only for one year unless Congress enacts new legislation to reauthorize the repeal. The Joint Committee on Taxation has estimated that permanent repeal would cost the federal government $290 billion in lost revenue through 2015. According to the Center on Budget and Policy Priorities, complete repeal from 2012 through fiscal year 2021 will cost over $745 billion. As numerous analyses have pointed out, the estate tax only affects the wealthiest 2% of Americans. By 2009, only 0.5% of taxpayers will be subject to the tax. According to an analysis by United for a Fair Economy, in 2009 the estate tax will only apply to an estimated 232 estates in New Jersey. Rather than being "double taxation," as repeal proponents characterize it, when estate taxes are imposed, a substantial proportion of the money has NEVER been previously taxed. Additionally, studies by the U.S. Department of Treasury and Duke University suggest that charitable donations may decline as much as 12 to 45 percent because people will have less of an incentive to give. A recent Congressional Budget Office study has concluded that if there had been no estate tax in 2000, charitable contributions would have been reduced by $13 billion to $25 billion - more than the total amount of corporate charitable donations in 2000, and more than the total current giving by the largest 110 foundations in the country. The Center for Non-Profits has an established position in favor of reforming - but not repealing -the estate tax. Like many national advocates, we believe that amendments can be made to correct existing problems without eliminating the tax altogether. Especially in these challenging times, our nation cannot afford to sacrifice huge amounts of money on estate tax repeal at the expense of more pressing needs.
Additional Web resources on this issue: Americans for a Fair Estate Tax: http://www.fairestatetax.org Center on Budget and Policy Priorities: http://www.cbpp.org/4-12-05tax.htm United for a Fair Economy: http://www.faireconomy.org/estatetax/index.html New Jersey Members of the U.S. House of Representatives (To email your Member of Congress, use the following link: http://www.house.gov/writerep/ ) The Honorable Robert Andrews (D-1) 2439 Rayburn House Bldg., Washington, DC 20515 Phone: 202/225-6501 Fax: 202/225-6583 The Honorable Frank LoBiondo (R-2) 225 Cannon House Bldg., Washington, DC 20515 Phone: 202/225-6572 Fax: 202/225-3318 The Honorable H. James Saxton (R-3) 339 Cannon House Bldg., Washington, DC 20515 Phone: 202/225-4765 Fax: 202/225-0778 The Honorable Christopher H. Smith (R-4) 2373 Rayburn House Bldg., Washington, DC 20515 Phone: 202/225-3765 Fax: 202/225-7768 The Honorable E. Scott Garrett (R-5) 1641 Longworth House Bldg., Washington, DC 20515-3005 Tel: 202/225-4465 Fax: 202/225-9048 The Honorable Frank Pallone, Jr. (D-6) 420 Cannon House Bldg., Washington, DC 20515 Phone: 202/225-4671 Fax: 202/225-9665 The Honorable Michael Ferguson (R-7) 214 Cannon House Bldg., Washington, DC 20515 Phone: 202/225-5361 Fax: 202/225-9460 The Honorable William J. Pascrell (D-8) 1722 Longworth House Bldg., Washington, DC 20515 Phone: 202/225-5751 Fax: 202/225-5782 The Honorable Steve Rothman (D-9) 1607 Longworth House Bldg., Washington, DC 20515 Phone: 202/225-5061 Fax: 202/225-5851 The Honorable Donald Payne (D-10) 2209 Rayburn House Bldg., Washington, DC 20515 Phone: 202/225-3436 Fax: 202/225-4160 The Honorable Rodney Frelinghuysen (R-11) 2442 Rayburn House Bldg., Washington, DC 20515 Phone: 202/225-5034 Fax: 202/225-3186 The Honorable Rush Holt (D-12) 1019 Longworth House Bldg., Washington, DC 20515 Phone: 202/225-5801 Fax: 202/225-6025 The Honorable Robert Menendez (D-13) 2238 Rayburn House Bldg., Washington, DC 20515 Phone: 202/225-7919 Fax: 202/226-0792
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