The Statesman Gets It
Except it's not, of course. As an April 8 New York Times article (duly excerpted in the same day's Statesman) points out, almost no working farmers end up owing any estate taxes, and neither academic researchers nor even the American Farm Bureau Federation (which opposes the tax) could discover "a single example of a farm lost because of estate taxes." As for family businesses -- only the richest 2% of taxpayers (about 50,000 people) pay any estate taxes at all, and "nearly half the estate tax is paid by the 3,000 or so people each year who leave taxable estates of more than $5 million." Hardly a tragic landslide of mom-and-pop entrepreneurs. Should the tax be repealed or radically reduced (the top rate is 55%, but readily available shelters make the average rate actually paid about 25%), the chief beneficiaries would be "the heirs of people who made their fortunes through their businesses and investments in securities and real estate."
Or the heirs of heirs -- e.g., those of Anne Cox Chambers and Barbara Cox Anthony, owners of Cox Enterprises (18 dailies including the Statesman, 30 weeklies and various related businesses), and currently listed together (with several others) at 18th place in the Forbes 400, with assets estimated at $10 billion. Anne is 80 and Barbara a comparatively spry 77, so whoever's on their short list would obviously prefer that the estate tax disappear soonest -- although the awesome scythe of the Death Tax clearly didn't put much of a crimp in the sisters' original inheritance.
Glib word on the street was that the sisters themselves directed the Cox papers to run the Death Tax ad (offered to all surfers at www.deathtax.com), but Jay Smith, president of Cox Newspapers in Atlanta, told the Chronicle that he made the ad available to the chain when it was offered by the Newspaper Association of America. "I know it's run in the Statesman and some other Cox papers, and I hope it runs in all of them," said Smith. Asked if he could document the ad's assertions (e.g., the supposed impact on family farms), Smith said, "I'm not going to vouch for all the individual statistics, but I accept the general premise that the tax is onerous, especially unfair to family-owned businesses, and I hope that Congress will see fit to grant relief." (Too bad -- we were hoping he could help establish the scholarly bona fides of something called the "Family Enterprise Center of Kennesaw State College," cited as an authoritative source in the ad.)
Statesman publisher Michael Laosa says that he and his advertising director made the decision for the Austin paper, and he echoed Smith's judgment of the content, adding that the paper's Sunday story on the subject hadn't changed his mind. Perhaps Laosa was armed against apostasy by a Feb. 4 commentary on the Bush tax plan by editor Rich Oppel, who mused, "The wealthy do benefit most [from eliminating the estate tax]. Yet inflation has driven the impact down into middle-class families. If you're older than 45 and both you and your spouse work, consider your home equity plus 401(k) balance. Estates approaching $1 million are increasingly common today."
Then in Wednesday's lead editorial -- at grandiloquent length -- the Statesman made much the same argument, while coming clean a bit: "Admittedly, family-owned businesses, including Cox Enterprises Inc. have a self-interest in this matter." Really. Otherwise, it's much more of the same, although we liked the wishful thinking that if the tax is abolished, billionaires like the Cox sisters might give more money to charity before they die, and the Solidarity Forever argument: Eliminating the tax is a populist stand against those greedy Wall Street tycoons. Sheesh.
Even Milton Friedman would be hard-pressed to call millionaires "middle-class." But at the Statesman, we're all Two-Percenters. Get it? Got it.