[Vision2020] "Statistics", estate taxes and Butch

[Mark Solomon]

 From today's Idaho Statesman.

Tim Hohs: Death tax won't kill small businesses

Edition Date: 05-17-2005


I was wondering recently how the United States was ever going to pay 
off the billion dollars a day we are borrowing overseas to pay our 
bills, when a press release arrived in my e-mail.

It was headlined: "Mike Simpson and C.L. "Butch" Otter bury the Death 
Tax for once and for all."

Permanently repealing the estate tax (its less creepy real name) over 
the next 10 years will cost us $745 billion in revenue, according to 
the Center on Budget and Policy Priorities - a trillion if you 
consider the interest it will add to our national debt.

This doesn't appear to bother Simpson and Otter because they say they 
are saving small businesses.

In their press release they write: "Small, family-owned businesses 
are especially vulnerable to the Death Tax . ... Because of this 
unruly tax, more than 70 percent of family businesses do not survive 
the second generation."

Otter and Simpson obviously mean big when they say small.

Anybody with a telephone can call an accountant and find out that a 
couple with a family-owned business could always exempt $2.6 million 
($3 million now) with no estate tax.

I guess if you are borrowing more than a billion dollars a day, $3 
million seems like small potatoes.

If it's true that 70 percent of family businesses are going under 
from this tax, they would be right to permanently trash it.

But it isn't true.

I called the author of the press release to find out where that 70 
percent figure came from.

I was told the failure factoid came from a House Republican Conference.

Where did the conference get it? From the Congressional Joint 
Economic Committee. The committee denied it. Whoops.

Then I was told the Republican Conference got the figure from the 
Center for the Study of Taxation.

Where did they get it? From a study called "Why successful businesses 
fail," done by the Small Business Council and National Life of 
Vermont.

Beth Chennette of National Life said the study was obsolete and no longer used.

Even if they had it, they wouldn't give it out, she said.

Paula Calimafde of the Small Business Council said the study was "10 
or 15 years old," and no one at her office could find it.

Pat Saldano of the Center for the Study of Taxation said the center 
put this figure "in quotes" because no one at the center had read the 
Vermont study either.

She believed the figure had been widely misquoted and wondered why no 
one had ever questioned it until now.

Has anyone ever read this important study?

A story in the Family Financial Times in 1993 by Harold I. Aplinsky, 
Esq. (he is in favor of estate-tax repeal) said the Vermont study was 
based on the family histories of 749 businesses that failed after the 
deaths of their founders.

He said the study suggested that tax drains (not just the estate tax) 
on the new and younger management, combined with their errors in 
judgment, contributed to the failing of some of the companies.

So here we are giving billionaires a very sweet tax present at the 
same time the banks in Europe and Asia are threatening to stop 
lending us money because the dollar is sinking so low that we are 
paying our debts with dollars that don't cover the interest.

And even with all that borrowing, we still can't adequately supply 
our armed forces, or take care of the health needs of most of our 
citizens. That's dumb.

And Simpson and Otter are throwing out statistics with no basis in 
the real world to justify this unbelievable giveaway.

That's dumber.

Tim Hohs, of Council, is the editor of The Adams County Record.
-------------- next part --------------
An HTML attachment was scrubbed...
URL: http://mailman.fsr.com/pipermail/vision2020/attachments/20050517/da871622/attachment-0001.htm