Grassley Signs On To Estate Tax Bill That Could Exempt His Entire Fortune While Affecting Few Others

President Bush’s massive tax cuts for the rich included a provision that repealed the estate tax in 2010. The tax has yet to be reinstated, though the House passed a bill late last year to set the tax at the 2009 level. Under the 2009 rate, estates worth less than $3.5 million pay no taxes at all, while larger estates pay 45 percent of anything above that threshold. As a bill to reinstate the estate tax is negotiated in the Senate, some senators have been pushing to cut this tax on millionaires to 35 percent, while raising the exemption to $5 million.

Today, the National Journal reported that Sen. Chuck Grassley (R-IA) signed on to the plan, which could represent an enormous tax break for his family. Grassley is worth between $2.1 and $5.2 million, according to the Center for Responsive Politics, so his entire estate could be exempted under a $5 million exemption.

Moreover, Grassley’s proposed tax cut would affect few families other than his own. Under the 2009 rate, 99.8 percent of estates owe no estate tax at all. If these levels were made permanent, the Center for Budget and Policy Priorities points out that “[o]nly three percent of taxes owed” would be from estates that are, like Grassley’s, worth less than $5 million. The vast majority of current estate tax revenue comes from the “extremely wealthy,” with 62.5 percent of revenue coming from estates worth more than $20 million.

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