September 6 was supposed to be the day the U.S. Senate voted on permanently repealing the estate tax — that percentage the federal government takes when folks pass away and pass along more than $1.5 million in assets to their young’ens. The permanent repeal seemed on track until the devastation of Hurricane Katrina, which many now realize would make a massive tax cut to the wealthy look ”unseemly.” Now, the vote has been delayed pending happier economic days.
It’s a welcome delay for arts advocates — and others in the nonprofit world — who saw the estate tax as an important incentive for charitable giving, especially bequests. Says the American Arts Alliance:
It is estimated that repealing the estate tax would reduce federal revenue by $1 trillion over the next 20 years and remove a strong incentive for charitable bequests. A 2004 Congressional Budget Office study reported that eliminating the estate tax would result in an estimated 22% decline in charitable bequests. A report issued by the Brookings Institution indicates that a repeal of the estate tax would result in a total loss of about $10 billion in charitable giving each year.
While the issue is deferred, it’s coming back for sure. Those interested in being ready for it might want to wander to Barry Hessenius’ weblog, where a group discussion on the topic is now underway.
