On Tax Day this year, April 15, the U.S. House of Representatives is expected to introduce legislation that would repeal the estate tax, a policy designed to limit the concentration of wealth in the United States, generate revenue for the federal government by having those most able to pay and encourage charitable giving. The legislation comes as congressional Republican budget plans propose to slash trillions of dollars in money that benefits working families and gives away massive sums to corporations and the wealthiest Americans.
Americans for Tax Fairness (ATF) has compiled a series of dishonest and hypocritical quotes from conservatives about the estate tax and related issues. ATF Executive Director Frank Clemente explained the Republican tax agenda:
Conservatives know their economic priorities are extremely unpopular—the American people want an economy that works for everyone, not just the wealthy few. So when they try to eliminate the estate tax, which affects only multimillionaires and billionaires, they resort to outright falsehoods in making their case and use phony rhetoric claiming they care about the rest of us. Repealing the estate tax will only increase inequality in America. These quotes help the American people understand what conservatives do, not what they say.
Here are five common lies about the estate tax and the truth behind them:
- “[T]his tax doesn’t just hit the big guy. It hits the little guy—like the small business and the family farm. It is both unwise and unfair, and it needs to go.”—Rep. Paul Ryan (R-Wis.). In reality, this law only affects the top 0.2% of estates, those worth more than $5.4 million for an individual, or nearly $11 million for a married couple.
- “The Death Tax is still the number one reason family-owned farms and businesses in America aren’t passed down to the next generation.”—Rep. Kevin Brady (R-Texas). The estate tax (the non-right-wing propaganda name for the law) has never caused a family farm to be lost.
- “If you…make the argument that only rich and wealthy people pay this tax, that is not true. It’s not true for almost every farmer and rancher in this country, it’s not true for every small business owner out there.” “I am committed to repealing this unjust—and frankly, immoral—tax that hurts small businesses and family farms most.”—Rep. Kristi Noem (R-S.D.). While there are millions of small businesses and small family farms in the United States, only 20 of them qualified to pay the estate tax in 2013.
- “The death tax is especially destructive to women and minority-owned small businesses in America who are building wealth often for the first time….A study by Boston College professors estimates the death tax could rob African American households of up to a quarter-trillion dollars of wealth over the first half of this century.”—Rep. Kevin Brady (R-Texas). The study that Brady cites shows that significantly fewer than 1% of African American households have a net worth that would cause them to pay the estate tax.
- “For too long the federal government has forced grieving families to pay a tax on their loved one’s life savings that have been built from income already taxed when originally earned.”—Sen. John Thune (R-S.D.). In reality, 55% of the value of estates worth more than $100 million are unrealized capital gains that have not been subject to income or capital gains tax. For estates worth anywhere between $5 million and $10 million, the unrealized capital gains that have not been taxed is 32% of their overall value. Without an estate tax, heirs also can escape paying any taxes on those gains.