Independent Sector sent a letter to key House members urging them to vote against full repeal of the estate tax and vote for a reasonable compromise that reforms the estate tax, but does not repeal it. IS is opposed to permanent repeal of the estate tax because it could drastically reduce giving to charitable organizations.

To see how your Representative voted, check the vote tallies posted on the House website:
Vote on passage of HR 8
Vote on the Pomeroy amendment

On the other side of the Capitol, Senator Charles Schumer (D-NY) is leading Democratic efforts to negotiate a compromise bill. Those opposed to full repeal hope to be able to pass a bi-partisan compromise instead of full repeal. Should a compromise not be reached, Senators supporting full estate tax repeal are planning a major push to get the 60 votes needed to end debate and call for a vote. Opposing Senators are seeking the 41 votes needed to keep the legislation from coming to a vote, effectively defeating repeal.

Bequests represent more than 25% of the total lifetime giving of very wealthy individuals. Reductions in the rate of the estate tax from 2002 to 2003 has already had an impact on giving. According to the IRS, total bequests in 2002 were $17.8 billion; in 2003 bequests declined 18.2% to $14.6 billion. In addition, some philanthropists leave instructions to create or contribute to foundations from their estates' assets. These, too, would be jeopardized by full repeal of the estate tax.

INDEPENDENT SECTOR's Letter to Congress on Estate Tax Repeal

April 12, 2005

Dear Representative:

Independent Sector, a national, nonprofit organization with over 500 member charities, foundations, and corporate philanthropy programs, urges you to oppose H.R. 8, which would permanently repeal the estate tax . Only a very small number of estates would benefit from this bill, while tens of thousands of charitable organizations serving millions of individuals, families and communities would be greatly disadvantaged.

For decades, charitable organizations have worked with donors wishing to make bequests, establish endowments or set up foundations from their estates. Increasingly, charitable gifts are coming from donors’ estates. Full repeal of the estate tax would wreak havoc on planned giving decisions and would also guarantee the loss of billions of dollars to charity annually. A recent study by the Congressional Budget Office (CBO) estimated that charitable organizations would have received $13 to $25 billion less in 2000 alone if the estate tax had not existed. Annual losses in this range will be disruptive to charities - from universities to neighborhood health clinics, homeless shelters to symphony orchestras.

Independent Sector's member organizations often partner with governments at all levels to provide services throughout this country and around the world. The loss of revenues to federal and state treasuries caused by repeal of the estate tax would require further cuts to critical programs and services already strapped for funds. This vital source of public revenues benefits all taxpayers and should not be traded for a tax cut benefiting less than one-half of one percent (0.005) of taxpayers (the estimated number that will be subject to estate taxes in 2009).

We understand the need to reform the estate tax laws and support efforts to give relief to family farmers and small businesses. These are important assets to families and communities, and heirs should be able to maintain them without the burden of estate taxes. But the very wealthiest estates should contribute to meeting the needs of the nation. A reformed tax will not negatively impact their heirs who will still be extremely rich.

IS urges you to support reasonable reform options instead of full repeal of the estate tax – and to oppose H.R. 8. Too much is at stake to do otherwise.

Sincerely,

Diana Aviv
President and CEO

Last updated: April 14, 2005