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Butch</title></head><body>
<div>From today's Idaho Statesman.</div>
<div><br></div>
<div><font face="Arial" size="+3" color="#993300"><b>Tim Hohs: Death
tax won't kill small businesses</b></font><br>
<font face="Arial" size="+3" color="#000000"><b></b></font></div>
<div><font face="Arial" size="-2" color="#000000">Edition Date:
05-17-2005</font></div>
<div><font face="Arial" size="-2" color="#000000"><br></font></div>
<div><font face="Arial" size="-2" color="#000000"><br>
</font><font face="Arial" size="+1" color="#000000">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.<br>
<br>
It was headlined: "Mike Simpson and C.L. "Butch" Otter
bury the Death Tax for once and for all."<br>
<br>
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.<br>
<br>
This doesn't appear to bother Simpson and Otter because they say they
are saving small businesses.<br>
<br>
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."<br>
<br>
Otter and Simpson obviously mean big when they say small.<br>
<br>
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.<br>
<br>
I guess if you are borrowing more than a billion dollars a day, $3
million seems like small potatoes.<br>
<br>
If it's true that 70 percent of family businesses are going under from
this tax, they would be right to permanently trash it.<br>
<br>
But it isn't true.<br>
<br>
I called the author of the press release to find out where that 70
percent figure came from.<br>
<br>
I was told the failure factoid came from a House Republican
Conference.<br>
<br>
Where did the conference get it? From the Congressional Joint Economic
Committee. The committee denied it. Whoops.<br>
<br>
Then I was told the Republican Conference got the figure from the
Center for the Study of Taxation.<br>
<br>
Where did they get it? From a study called "Why successful
businesses fail," done by the Small Business Council and National
Life of Vermont.<br>
<br>
Beth Chennette of National Life said the study was obsolete and no
longer used.<br>
<br>
Even if they had it, they wouldn't give it out, she said.<br>
<br>
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.<br>
<br>
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.<br>
<br>
She believed the figure had been widely misquoted and wondered why no
one had ever questioned it until now.<br>
<br>
Has anyone ever read this important study?<br>
<br>
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.<br>
<br>
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.<br>
<br>
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.<br>
<br>
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.<br>
<br>
And Simpson and Otter are throwing out statistics with no basis in the
real world to justify this unbelievable giveaway.<br>
<br>
That's dumber.<br>
<br>
Tim Hohs, of Council, is the editor of The Adams County
Record.</font></div>
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