Should estate tax rise in a 'fiscal cliff' deal? Why some ultra-rich say yes.
While much of the focus in the 'fiscal cliff' debate has been on income taxes, the group of wealthy Americans says an estate tax 'promotes democracy by slowing the concentration of wealth and power.'
J. Scott Applewhite/AP
A number of prominent wealthy Americans called Tuesday for a hike in the estate tax, as a way of raising new revenue in an era of high federal deficits.
The estate tax is one of the big question marks that is unresolved in talks over the nation's "fiscal cliff," the sudden tide of tax hikes and federal spending cuts that are poised to occur on Jan. 1 unless President Obama and Congress can agree on a new fiscal plan. The goal of the current negotiations is to avoid sending the economy back into recession, while also setting a course to reduce federal deficits over time.
"We believe it is right to have a significant tax on large estates when they are passed on to the next generation," the group of wealthy Americans said in a signed joint letter. "We believe it is right morally and economically, and that an estate tax promotes democracy by slowing the concentration of wealth and power."
So far, much of the fiscal-cliff discussion has focused on various ideas to raise more revenue from the rich via the income tax, not the estate tax. But the estate tax is very important, too – in the amount of federal revenue at stake – and it is very much in play politically.