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Estate Tax Fact Sheet

Did You Know?

Only the wealthiest 2% of estates pay any tax at all, and the first $1.5 million per individual ($3 million per couple) is entirely tax-free. Of those who do pay, the average tax payment is only 20% of the estate.
In 2001, when the estate tax was at its highest, only 52,000 people in the US paid the estate tax, and in Iowa only 616 people paid the estate tax!
Much of the wealth taxed by the estate tax is from capital appreciation – money that has never been taxed (so it is not “double taxation”).
If repealed, there would be billions in lost federal tax revenues. The loss in revenue would be nearly $1 TRILLION over ten years.
The estate tax generates enough revenue to provide health coverage to 22 million children. Currently there are 10 million uninsured children in the US.
If the estate tax revenue was distributed to the states, it would provide enough money to provide health coverage to 207,000 children in Iowa. Currently there are 47,000 uninsured children in Iowa.

Legislative Background.

The estate tax is currently scheduled to slowly phase out over the next few years. The exemption level – the amount under which an estate owes no tax – is currently $1.5 million per individual, and is scheduled to rise to $3.5 million in 2009, before being repealed in 2010, and then reinstated in 2011.
Congress is now considering permanently repealing the estate tax, or drastically reducing it. Senator Kyl (R-AZ) has introduced legislation to reduce the tax by 93 percent. That would mean a loss of 93 percent of a trillion dollars in revenue over ten years.

Emergency Campaign for America's Priorities

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RESOURCES

Emergency Campaign for America's Priorities

Center on Budget and Policy Priorities recently released reports

FACT SHEET

Congress Must Not Repeal The Estate Tax

SLIDESHOW: SOCIAL SECURITY IS NOT BROKE

The Social Security “Crisis” Explained in Plain English -- Midwest Academy, January 2005. Click here for the slide show.

FAIR TAXES FOR ALL CAMPAIGN

For more information on the Fair Taxes for All campaign, click here.

REPORTS

BULLSEYE ON THE POOR & MIDDLE CLASS

ICAN and partners have released a report telling Iowans how capital gains and dividend tax cuts exacerbate Iowa's growing income disparity. In total, the top five percent of Iowa earners would reap 55 percent of all benefits to Iowa households.

Setting the Right Priorities: Why Iowa Can't Afford Repeal or Drastic Reduction of the Federal Estate Tax

Center on Budget and Policy Priorities works at the federal and state levels on fiscal policy and public programs that affect low- and moderate-income families and individuals. Visit CBPP’s archive of recent policy papers by clicking here.