Four months after he unrolled details on how he would fund his health care proposal, presidential hopeful Sen. Barak Obama (D-IL) has backtracked on his pledge to roll back part of President Bush's tax cuts, Obama's campaign said.
Obama had said that he would return the federal estate tax threshold to its 2001 level of $1 million. But he soon discovered that with inflation that $1 million wasn't the large amount of wealth it once was.
His plan drew objections from most of his fellow Democrats in Congress, especially members of the powerful Black Caucus who complained that the threshold would bar black small business owners and farmers from passing wealth along to their heirs.
But for many critics his change of policy was irrelevant anyway because some had viewed his identification of specific funding sources as nothing more than playing games with math anyway.
He had originally estimated that his health care plan would need $50 billion in funding and identified such things as restoring the estate tax, eliminating the tax cut for people earning more than $250,000 a year, raising tax rates on earned dividend and phasing out most corporate tax exemptions as raising enough money to cover that.
The pre-2001 level inheritance tax on estates was 55 percent of estates valued at $650,000 or higher. The current level is an estate isn't taxed unless its value is $3 million per person inheriting or $6 million per family. Various proposals have been made to set the amount of an estate at various levels with tax rates ranging from 15-30 percent.
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