The Senate has so far failed to pass an estate tax bill, allowing the tax to expire this year. Two new proposals, though, aim to reintroduce the estate tax and could generate billions in revenues.
Ellen M. Banner/The Seattle Times/AP Photo/File
So far, the millionaires in the US Senate (probably a majority) have not recused themselves from considering estate tax legislation that could, depending on how they vote, save their own heirs hundreds of thousands of dollars in taxes – and possibly make a significant positive or negative difference in the federal budget deficit in the years ahead.
Their votes could potentially also slow or speed the drift of the nation toward an aristocracy of the wealthy.
Over the past three decades, the share of income going to the richest 1 percent has doubled, notes Chuck Marr, a policy analyst at the Center on Budget and Policy Priorities in Washington. The estate tax is "some check on the exponential growth of dynasties."
Last year the House voted to extend the estate tax at the 2009 level, as suggested by President Obama.
The amount of a couple's estate exempt from the tax would be $7 million, half that for a single individual. The rate on the taxable excess amount would be 45 percent. This would have hit 0.25 percent of all estates and perhaps 110 farm and small-business estates (though no one has yet found a family farm hit by the estate tax, the experts say). The actual effective tax rate on average for taxable estates would be about 19 percent, Mr. Marr reckons.