Former Treasury Secretary Robert Rubin, Tiger Management LLC Founder Julian Robertson and an heir of Walt Disney urged Congress to reinstate a tax on multimillion-dollar estates, possibly retroactively.
The three were joined by AFL-CIO President Richard Trumka today to support efforts by a Boston-based advocacy group, United for a Fair Economy, pressing lawmakers to act before Congress adjourns for a month-long recess in August.
The deaths of New York Yankees owner George Steinbrenner and at least three other billionaires this year has focused attention on the absence of the levy, which lapsed Jan. 1. Had they died in 2009, they would have paid as much as 45 percent on much of their estate, depending on how their wills were structured.
“We should restore the estate tax in its entirety, and restore it now,” Rubin, who was Treasury secretary under President Bill Clinton, said on a conference call with reporters. He said making the tax retroactive to cover all of 2010 “should be very seriously considered.”
In 2001, Congress passed legislation phasing out the estate tax over the following decade and eliminating it for 2010. Unless Congress acts, the levy is scheduled to return in 2011, with a top 55 percent rate that would apply to amounts of taxable estates that exceed $1 million.
The prospect of a higher tax next year prompted the House in December to pass legislation that would extend the law as it existed to 2010 and beyond. In 2009, the first $3.5 million of an individual’s estate was tax-free, with a top rate of 45 percent applying to the excess.
That effort has stalled in the Senate, where Arizona Republican Jon Kyl and Arkansas Democrat Blanche Lincoln are lobbying for an alternative that would eventually result in a 35 percent rate that applies to estates of more than $5 million per individual. Many business groups such as the U.S. Chamber of Commerce that once lobbied for repeal of the levy now back the Kyl-Lincoln proposal.
“It is estimated that more than a half million American families will pay the estate tax over the next decade, and the lack of congressional action creates a tremendous amount of uncertainty for these families,” Kyl said in a statement last week.
Neither the House bill nor the Kyl-Lincoln alternative has found the 60 votes needed to overcome procedural hurdles and pass in the Senate.
Rubin, a former chairman of New York-based Citigroup Inc.’s Executive Committee, and the other advocates, including philanthropist Abigail Disney, grandniece of Walt Disney, said restoring the federal estate tax would generate revenues that could be used for public-works projects and reduce budget deficits. They also said the levy would spur charitable giving, as gifts to non-profits are exempt from tax.
The call was organized by United for a Fair Economy project called “Responsible Wealth,” a network of wealthy and high- income earners who advocate for higher taxes.
Editor: Max Berley, Mark Silva