Friday, October 24th, 2014

Fact-checking the estate tax

The compromise tax plan calls for a 35 percent tax on the value of estates over $5 million.
The compromise tax plan calls for a 35 percent tax on the value of estates over $5 million.

The compromise agreement on taxes proposed by President Barack Obama -- after negotiating with Republican leaders -- has critics on both ends of the political spectrum. The plan would extend all Bush-era income tax cuts for two years and extend unemployment benefits for another 13 months.

But another contentious aspect of the plan has emerged: estate taxes. The plan would impose a 35 percent estate tax rate, with an effective exemption of $5 million.

On Dec. 7, 2010, Sen. Jim DeMint, R-S.C., said he wouldn't support the plan because the compromise "raises taxes, it raises the death tax." There was no estate tax this year, but 2010 was an anomaly. And barring an agreement, the estate tax is set to revert to 55 percent on the value of estates over $1 million. And so we rated DeMint's claim Barely True.

Sen. Bernie Sanders, an independent from Vermont and a self-described democratic socialist, sent out a message via Twitter on Dec. 13, 2010, claiming that  under the estate tax plan, "99.7% of American families will not pay 1 nickel in an estate tax. This is not a tax on the rich, this is a tax on the very, very, very rich." We found his statistic had solid grounding in a report from the nonpartisan Tax Policy Center, and we rated his claim True.