Inheritance Tax

Floor Speech

Mr. SANDERS. Mr. President, let me begin by making a few points about which there is not a whole lot of disagreement.

First, the United States today is in the midst of the worst economic downturn since the 1930s. Over 16 percent of working age Americans are unemployed or underemployed, working 20 hours a week when they want to be working 40 hours. Long-term unemployment is the highest on record. In other words, when people are losing their jobs now, it is not a question of weeks to gain a new job but, in some cases, 6 or 8 months or perhaps not at all. In the midst of this economic crisis, millions of Americans have lost their homes, savings, and pensions.

Second point: The United States today has a $13 trillion national debt and a record-breaking $1.6 trillion deficit. Last year alone, the Federal Government spent over $186 billion paying interest on that debt. We are leaving our children and grandchildren a huge financial obligation which not only will impact them personally but will affect the well-being of the entire country in the midst of a strong and competitive global economy.

Third point: The United States today has the most unequal distribution of wealth and income of any major country. Today, as this chart indicates, the top 1 percent earns more income than the bottom 50 percent. Let me repeat that. The top 1 percent earns more income than the bottom 50 percent. And the top 1 percent owns more wealth than the bottom 90 percent. The top, 1 percent; bottom, 90 percent. What we have is a nation in which in many ways we are moving toward an oligarchic form of society, with a small number of people on the top seeing a huge increase in their wealth and income while the middle class lapses and poverty increases.

During the Bush years, when the middle class saw a $2,200 decline in median family income, the 400 wealthiest families saw their income more than double. Meanwhile, while the very rich became much richer, their effective income tax rates were slashed almost in half over the past 15 years. The rich get richer. Their effective income tax rate goes down. The wealthiest 400 Americans have now accumulated $1.27 trillion in wealth, while the highest paid 400 Americans had an average income of $345 million in 2007 alone. As a result of Bush's tax policy, these very high-income people pay an effective tax rate of 16.6 percent, the lowest on record. The rich get richer. Their effective tax rates go down--lowest on record.

Warren Buffett, one of the wealthiest people on the planet, has often made the point that he, a multibillionaire, pays a lower effective tax rate than his secretary.

Last point I wish to make: Last month a gentleman named Dan Duncan, who happened to be the wealthiest person in Houston, TX, passed away. He left his family some $9 billion. For the first time since 1916, almost 100 years, somebody in the top echelon bracket like a Mr. Duncan will have a situation where his heirs will pay zero inheritance tax, not a nickel. That is the first time that a multimillionaire or billionaire has died in 100 years and their family has not paid one penny in inheritance taxes. This occurred as a result of President Bush's $1.35 trillion tax break enacted into law in 2001. In other words, at a time when this country has a devastatingly high rate of unemployment, at a time when the Senate refused to extend unemployment benefits to desperate people who, through no fault of their own, have lost their jobs and have no income, at a time when we have a huge national debt, at a time when we have massive unmet needs, including a crumbling infrastructure and the need to transform our energy system, at a time when we have a growing gap between the very rich and everyone else, we have a situation now where the very wealthiest people are seeing, when one in their family dies, their estate tax is zero.

A century ago, President Teddy Roosevelt, a good Republican, called for a graduated inheritance tax on wealthy estates. In 1916, Congress passed that law. Interestingly enough, here is what Republican Teddy Roosevelt said in 1910:

The absence of effective state, and, especially, national, restraint upon unfair money-getting has tended to create a small class of enormously wealthy and economically powerful men, whose chief object is to hold and increase their power. The prime need is to change the conditions which enable these men to accumulate power which is not for the general welfare that they should hold or exercise ..... No man should receive a dollar unless that dollar has been fairly earned.

Let me repeat: No man should receive a dollar unless that dollar has been fairly earned.

Every dollar received should represent a dollar's worth of service rendered, not gambling in stocks but service rendered. The really big fortune, the swollen fortune, by the mere fact of its size, acquires qualities which differentiate it in kind as well as in degree from what is passed by men of relatively small means. Therefore, I believe in a graduated income tax on big fortunes and in another tax which is far more easily collected and far more effective--a graduated inheritance tax on big fortunes, properly safeguarded against evasion and increasing rapidly in amount with the size of the estate.

Teddy Roosevelt, 1910.

There are not many Republicans I agree with today, but I do agree with what Teddy Roosevelt said 100 years ago. That is exactly what the responsible estate tax act I have introduced, along with Senators HARKIN, WHITEHOUSE, FRANKEN, and SHERROD BROWN, will do. Specifically, this legislation exempts the first $3.5 million of an inheritance from paying any Federal estate tax whatsoever. Doing this means that 99.7 percent of Americans who receive an inheritance will not pay one penny in Federal estate taxes. This legislation would impact only the very wealthy, the top three-tenths of 1 percent.

Under my legislation, the value of estates above $3.5 million and below $10 million would be taxed at 45 percent; the value of estates above $10 million and below $50 million would be taxed at 50 percent; and the value of estates above $50 million would be taxed at 55 percent, the same as the 2001 level before the Bush tax cuts. Further, this legislation includes a 10-percent surtax on the value of estates above $500 million or $1 billion for couples.

According to the Joint Committee on Taxation, this legislation, over a 10-year period, would bring in $315 billion--a significant step forward in addressing our national debt. But this legislation would do something even more important. In the midst of these enormously difficult times, this legislation makes clear we are one country and all Americans must accept shared responsibility. In my view, it is immoral, it is unfair that while the middle class struggles to survive, millionaires and billionaires get tax breaks.

Mr. President, I yield the floor.

I suggest the absence of a quorum.

Source