Death Tax Stories
|James L. Martin
|Rep. Roger Zion (R-IN, 1967-75)
Death Tax Horror Story
Pro-Death Tax supporters have waged an effective public relations war by portraying the Death Tax as only a levy on the super-rich “Wall Street” crowd, a so-called “war on the wealthy.” In order to fight back against this propaganda, we plan to tell the Death Tax horror stories of families hit hard by this destructive tax.
Our goal is to finance and produce dozens of short videos that will launch our campaign to restore the American Dream by repealing the Death Tax. The 60 Plus Association will host informational briefings on Capitol Hill and in key states to educate the public and decision makers on Capitol Hill about the economic destruction the Death Tax causes.
Congresswoman Kristi Noem (R-SD) often speaks about the problems the Death Tax created for her family’s farm when her father unexpectedly passed away (It took her 10 years to pay off the balance of the Death Tax following his death). In a recent focus group conducted by pollster Frank Luntz, her story was extremely effective in terms of influencing members of the group that the Death Tax is morally wrong. We have found that personal stories, more than charts and statistics, are the best way to show the American people and Members of Congress the destruction and devastation the Death Tax causes.
In order to put a face to the tragedy of the Death Tax, we will first identify family business owners who have been hit by the Death Tax within the membership of our organization and allied organizations. Our hired film crew and director will travel across the country capturing these stories.
Our videos will show the American people and Congress that folks worried about the Death Tax are not like Warren Buffett and Bill Gates, who protect their assets behind trusts and who have built businesses with the goal of passing them on to the next generation.
Roger Williams (R-TX 25th District) Death Tax Story
Apr 16, 2015 Column
In 1939 a man started a car dealership to realize the American dream. When he died the ownership of the business was passed along to his son and so was a death tax liability equal to a significant value of the business’ worth.
The son nearly declared bankruptcy.
Fortunately, he was able to pull the resources together to keep his father’s dealership afloat. He still runs the dealership to this day and has more than 100 employees.
That son is me.
When I hear people like Jason Furman, the Chairman of President Obama’s Council of Economic Advisers, tell reporters that a repeal of the estate tax is, “not even a tax cut for employers,” it irritates me beyond belief.
It is worrisome that the president relies on advisers like Furman, who have little to no business experience, to guide him on economic decisions that impact the nation.
To me it appears the president’s staff of government bureaucrats and academics view their policies through the isolated lens of Northeast ivory towers rather than through the shop windows of family businesses on Main Street.
President Obama would have you believe the death tax is justified because “the rich should pay their fair share of taxes.”
What he won’t tell you is that many second generation business owners do not have the means to hire teams of accountants and lawyers to navigate the costly and burdensome obstacles to save the family farm.
Just because I was able to free myself from the stranglehold of the federal government does not mean others have shared similar stories of success.
As a business owner of many years I have seen friends and colleagues lose gains made from a lifetime of hard-work because of Washington’s failed policies, like the death tax.
I spent two decades cutting checks to the federal government so I, and my business, could be in good legal standing. I have paid Uncle Sam money that could have gone to hiring more workers, money that could have gone to charitable causes.
Instead, my money was transferred from my business to a bloated government that is 18 trillion dollars in debt.
The death tax has traded job creation for bigger, less responsible government.
Let’s look at the facts.
The death tax is a tax on savings that have already been taxed before, but the tax provides less than one percent of federal revenue.
According to the Tax Foundation, a repeal of the death tax would “boost GDP, create 139,000 jobs, and eventually increase federal revenue.”
That’s right, ironically, by killing the death tax, the U.S. government would profit more.
We must put an end to the unfair policy of double taxation on job creators so that the federal government can gain an insignificant amount of income.
As they say, there is nothing certain in life but death and taxes. Let’s make sure the latter doesn’t happen twice.
Original Article can be found here.
More Horror Stories relating to the Death Tax can be found below from the Policy and Taxation group, whose website can be found here
Open Letter from a Tax Payer
To Whom It May Concern:
My name is Clayton and I have a story to tell. In the 1860’s my great-great grandfather was a cattleman. He had moved from England to Virginia and from Virginia to Texas. He began leasing land from landowners to graze cattle, all the while saving his money. Gradually, as he saved more and more, he began purchasing small tracts from the people he was leasing from and over his lifetime he had purchased several thousand acres through hard work and frugal living, the typical American dream.
When he passed away the land then went to his children. His children continued the ranching tradition and passed it on to his five children (one of which was my grandmother). My grandmother passed away in 1997 and unbeknownst to my father (or my grandmother at the time of writing her will), he suddenly had to pay a tax, 38.5% of the estate minus a $1mil deduction, on the appraised value of the land that her grandfather had worked so hard to purchase, protect, and work. At the time, no one even knew the value of her estate because its value was in what it could produce, not what it could sell for. Her estate didn’t have many liquid assets or a large amount of cash that could pay this new debt to the IRS. So, my father set up a payment plan and began working to pay it off.
We fast forward to the Summer of 2006. My father began to get ill and since the estate tax of my grandmother had become such a burden and such a large part of our family life we got together with a team of attorneys, CPA’s, and tax planners to try and avoid the dreaded estate tax should something happen to my father. In November 2006, my father passed away. We had a written plan on how to structure the family ranch, but the majority of it we didn’t get to put into practice in enough time to steer clear of the estate tax.
So, once again, my father’s will stipulated that the family ranch would go to my brother and me. We would be the 5th generation to own and work this land. But, we had to pay for inheriting what he fought to hold on to…again! And once again, my father didn’t have much saved cash or liquidable assets. What few liquid assets he had were quickly spent on CPA’s, tax attorneys, surveyors, and appraisers to determine what we owed the IRS. So, we were forced to set up another payment plan with the IRS.
We are now burdened with two estate tax payments every year. One for my grandmother’s estate (from 1997!), and one for my father’s estate. We will be making these payments for the next 15 years. So, not only are we trying to make a small family business in ranching profitable for ourselves, we are now trying to make it profitable for the IRS so that it doesn’t end up as federal land.
For five generations my family has worked this land. Five generations have poured their blood, sweat, and tears into this land, this family business. We have diligently paid our local, state, and federal income taxes. We have sowed into our local, state, and national economy. But because we’re now defined as wealthy according to someone else’s definition of the word, it will be next to impossible to preserve our family heritage for another generation.
Thomas Jefferson once said: “A wise and frugal government, which shall restrain men from injuring one another, which shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor and bread it has earned. This is the sum of good government.” Ask yourself if our story is one that represents the sum of good government.
Thank you for your time.
Clayton T. Leverett
“Businesswomen are Discovering Estate Tax’s Dire Consequences”
Wednesday May 17, 2006
By: Barbara Kasoff
Many people like to think of the estate tax as a victimless crime.
Sure it is double taxation, they’ll say, but the government needs the money and, besides, few people actually pay. Unfortunately, the estate tax actually contributes very little to the federal budget, and its victims are real and tragic: family farms and small businesses.
It works like this: When small farmers and businesspeople die, their estates must pay a sum equal to 47 percent of the value of their total assets above $2 million, including their farms and businesses. If the heirs cannot pay the tax, they must liquidate.
In all likelihood, this is what will happen to Melanie Meyer’s business. The majority owner of the Versailles Arms apartment complexes, which together constitute one of the largest Section 8 public-assistance housing properties in New Orleans, Ms. Meyer has been an exceptional proprietor and community leader. Her buildings have always been clean and superbly maintained, and she has worked vigorously to promote economic development and empowerment in her predominantly low-income neighborhood.
In 1994, she helped establish in New Orleans the Safe Neighborhood Action Plan (SNAP), a joint effort between the Department of Housing and Urban Development and various community organizations to prevent crime, provide continuing education and promote economic development and homeownership. She has been a leading force in the initiative ever since, and SNAP has its local headquarters at the Versailles Arms Neighborhood Networks Learning Center.
Ms. Meyer is trying to rebuild the Versailles Arms in the wake of Hurricane Katrina. She wants it to be the same positive force for change in the coming decades that it has been in the previous few. This is why she would like to keep the property in the family: to ensure that those who run it are mindful of both the community and the bottom line, and not simply one or the other. But there’s a catch. If Ms. Meyer died today, none of her heirs would be able to afford the estate tax on the property.
The estate tax is patently unfair to Ms. Meyer. She has worked all of her life to build her enterprise, and she has paid taxes on everything she has earned in the process. The government has already taken a generous chunk of the wealth she has generated. When she dies, it will demand half of what is left.
Yet the estate tax is even more unfair to the members of the community who have benefited from the existence of the Versailles Arms. If the tax persists, Ms. Meyer’s properties will expire when she does. Its tenants, who relied on it for safe, sanitary and affordable housing, will have no place to live. Its employees, who relied on it for their jobs, will have no place to work. The local residents, who relied on the learning center for education and financial advice, will be on their own once again.
The estate tax is fundamentally against the interests of the American people because, in effect, it destroys the things individuals create in their lifetimes, things that we would just as soon have around. Think of the family farms that are sold and then parceled up to make way for subdivisions. Think of the small businesses sold and digested into larger corporations, leaving their former premises empty and their former workers unemployed. Think of Ms. Meyer’s housing complex.
The great irony in all of this is that the estate tax does not even generate much income for the federal government. It constitutes only 1-2 percent of federal revenue on paper, and many experts believe that collection and compliance costs approach the amount actually collected. So, in all likelihood, we are jeopardizing our farms and businesses without actually increasing the federal bottom line.
Female business owners are becoming particularly aware of the negative impacts of the estate tax. There are 9.1 million woman-owned businesses in the United States, employing 27 million people, and women are starting businesses at twice the rate of men. But the more they accomplish, the more women recognize that the estate tax hangs like a guillotine over all they have built.
For the sake of the family farms and small businesses across the country, Congress must act to repeal the estate tax permanently. It is not just unfair to business owners and damaging to the American economy, it is an affront to the American dream that so many women are striving to achieve.
Kasoff is president of Women Impacting Public Policy, a national organization of women in business.