Posted on 09/23/2002 5:46:35 AM PDT by wallcrawlr
Is it about farmers and the owners of small businesses? Or is it about multimillionaires?
The national debate over whether to abolish the tax that the federal government levies on large estates revolves around enduring images of "American Gothic"-style family farms and mom-and-pop shopkeepers struggling to stay in business.
Those images aren't terribly accurate.
But that hasn't prevented Democrats and Republicans from seizing the estate tax as a defining issue in close U.S. Senate races this year, including the duel between Paul Wellstone and Norm Coleman in Minnesota.
Republicans want to abolish the tax on farmers, small-business owners and anyone else whose estate — house, property and other assets — is worth more than $1 million. Democrats want to overhaul the tax, not eliminate it.
Each says its plan better protects family farmers and owners of small businesses.
But the reality is that few farmers and small-business owners pay the tax even now.
The Minnesota Department of Revenue estimates that barely three dozen farms are subject to the state's version of the estate tax, even though the state threshold is $700,000 — $300,000 less than the current federal exemption. Moreover, only 325 of the state's nearly 1.9 million households would pay any federal estate taxes.
"There's a huge amount of misrepresentation on this issue," said economist Neil Harl of Iowa State University. "Farmers losing their farms because of the estate tax is a myth."
To the wealthiest Minnesotans, though, the estate tax is very real. And they're supporting the party and candidate whose position best protects their interests.
A Pioneer Press analysis shows that about three dozen of Minnesota's wealthiest families have contributed nearly three-quarters of a million dollars into the effort to elect former St. Paul Mayor Coleman, a Republican.
And while those wealthy families — most of whom live in Edina or around Lake Minnetonka — tend to back the GOP anyway, all stand to benefit from total abolition of what Coleman calls the "death tax."
REPEAL VS. 'REFORM'
Congress has, in a way, already abolished the estate tax. It is being slowly phased out and is scheduled to disappear entirely in 2010. But in a strange twist, the law is then slated to expire — restoring the tax in 2011.
Coleman and many other Republicans want to make repeal permanent. President Bush has stumped across the country demanding total abolition of the levy, and the issue has become part of the debate throughout the Farm Belt.
Democrats, including incumbent U.S. Sen. Paul Wellstone, want to raise the $1 million threshold to at least $4 million, and add a total exemption for family farmers and small-business owners. They say the tens of millions the tax generates each year is better spent on essential government services, especially since the federal budget surplus has evaporated.
A U.S. Department of Agriculture study notes that total abolition of the estate tax would primarily benefit farms worth more than $5 million. Under the proposal Wellstone supports, the USDA estimates that just 1 percent of farms nationally would be subject to the estate tax — even disregarding a built-in exemption for family farms.
The National Republican Senatorial Committee and the White House, which have both taken extraordinary interest in the Coleman-Wellstone contest, hammer away at the issue daily. The estate tax also has become part of the debate in Iowa, South Dakota and Missouri — all places where the GOP hopes to score points with farmers.
Republicans are suggesting in ads and polls that farmers will lose land unless the "death tax" is totally repealed. They say Wellstone claims to be against the tax yet has voted against abolishing it seven times.
Wellstone spokesman Jim Farrell says the Republicans are misstating the senator's position. While Wellstone has voted against total repeal, he has never said he wants to abolish the tax entirely. "We're never going to support repeal," Wellstone spokes-man Jim Farrell said. "We support reform."
Several Republicans prominent in Minnesota and nationally say they're puzzled by the current emphasis on the issue. Before Congress upped the threshold from $675,000 to $1 million last year, the GOP had a political issue that potentially affected anyone with a nice house and a healthy stock portfolio. Now, they say, the Democrat-engineered vote in June to raise the threshold to $4 million — $8 million under certain circumstances — undercuts the usefulness of the estate tax on the campaign trail.
Even former U.S. Sen. Rudy Boschwitz, a Republican and Wellstone's former nemesis, supports the Democrat position.
"An $8 million exemption? I'd be for that," Boschwitz said. He said that would reduce the need for expensive estate planning for all but a few families. Boschwitz said government should not subsidize the rich. But he would not exempt all family farmers.
Coleman, the National Republican Senatorial Committee and allied groups say the June vote was a political ploy by Democrats.
"That vote was designed for exactly what Wellstone is using it for: It was a fig leaf," said Mike Dubke, president of the business-backed Americans for Job Security, a Virginia-based group attacking Wellstone on the issue.
Coleman called the proposal "a sham vote." He said the exemption for farmers and small-business owners in the Wellstone-backed proposal is too cumbersome and makes families spend money on estate planning that could otherwise be spent building their business. And Coleman dislikes a provision in the law that requires a family member to stay involved in the business or farm for at least five years after inheriting it.
Coleman said he wants to go to Washington and abolish the "death tax." But when pressed, Coleman did say he'd accept less than total repeal.
"Look, I prefer to get rid of this tax entirely," he said. "However, I am open to discussing limiting this to only the super-rich, if there was a way we could structure it that way. But that hasn't been on the table."
WHO'S AFFECTED?
Even if Congress does nothing, only a few hundred Minnesota families are affected by the tax. And if it lifts the threshold to $4 million, that number shrinks to just a few dozen.
Who might still be affected? The Pohlad family, the Bingers of 3M, the Carlson sisters of the Radisson hotel chain, Stanley Hubbard of Hubbard Broadcasting, Glen Taylor of the Timberwolves and Richard Schulze of Best Buy — all are members of the Fortune 400. All are financial supporters of Coleman.
Add longtime GOP stalwarts such as the Pillsburys and the Whitneys, and Coleman's support from Minnesota's elite is near total. Of that group, only Vance Opperman, formerly of West Publishing, and the Dayton family are backing Wellstone. Mark Dayton is Minnesota's junior U.S. senator and is a substantial Democratic moneyman.
All told, federal records show 40 of the state's wealthiest families have contributed at least $713,000 to Coleman, his affiliated political action committees, or the National Republican Senatorial Committee. Most notable are father-and-son commercial developers Sidney and John Goodman of Chaska: Combined, they've contributed at least $81,500 to the Coleman effort.
Coleman says the state's wealthy support him because they dislike the union-friendly Wellstone, not because of Coleman's stance on the estate tax.
"Look at who's supporting Paul Wellstone: the trial lawyers. Is that bad? I don't know," Coleman said. He added that Wellstone's position as a champion for Big Labor has made him a natural target for Minnesota's business community.
Reach Hank Shaw at hshaw@ pioneerpress.com or (651) 228-5257.
I wouldn't exactly call the Teamsters "right," which is the basic mentality of envy going on with Willie Boy.
I know just enough about estate taxes to know that I'm better off focusing on the strength of my practice: income taxes!
Why is this germaine to the converation? It's no one else's business what you do with your property. It is immoral to steal property, no matter who it belongs to or for how long. Either property is privately held or it belongs to the government and you are only allowed to keep it under certain conditions, those decided at their pleasure.
To engage a thief in the details of his plunder is to miss the fundamental point and concede that it is ok to set rules on things like private property.
The poster in question poses as being from the right. His presence on this forum is partial proof of that.
He is an authoritarian. Left or right is kinda irrelevant in any case I suppose.
My wife is really, really good at what she does as a tax accountant, and I love her all the more for it.
In reading F.A. Hayek's The Constitution of Liberty, I did see that, while in France (which fits, I think with 1784), Jefferson became something of a believer in the "top down" planned egalitarianism of the French revolution.
However, the egalitarianism of the French Revolution formed the basis of what soon became socialism. It's in direct contradiction with the English tradition of individual liberty that most of us believe to be the basis of American freedom.
The GOP is 'reaching out' even to the dead. The only group on their no-no sh't list, is payroll Reagan Democrats, but then again they have nowhere to go, right?
I did nothing of the kind, Sir High-Horse. I pointed out to Willie Boy that he was wringing his hands in jealousy completely gratuitously, as an exercise in mental masturbation.
This statement assumes some help is needed at all. That it is immoral somehow to accumulate wealth and pass it on to one's heirs. It is not.
Anybody with Internet access and an email address can post here. There presence is partial proof of nothing.
This is outrageous that this was passed by a majority of the Senate and the House, and includes this caveat.They have no shame at all,and it makes me ill the amount of money the Gov't takes from our company.Tax This Tax That, Tax the grieving family after the parents are dead.Go ahead,Tax them when their dead,one more time.Don't give that family a chance to keep a small business growing,just tax us to death.That is disgusting.You can see why I loathe most politicians.Can't we just brand (Like they do a Steer)the people who voted for this?
No. You intentionally ignored my description of individuals being able to travel both up and down the "escalators" of economic success based on their individual merit. That certainly isn't communism.
It's apparent that you're not interested in intelligently discussing the distinction -- only spouting ideological hyperbole whether it makes any intelligent contribution to the discussion or not.
Go back to playing in your sandbox.
I'll give some thought to changing my screen name to that, It has a nice ring to it. :-)
In the mean time, you made the statement that it (wealth) dissapates after a while. Which sounds to me like you addressed his point, namely that it is a problem if it doesn't. His point should be discarded or disputed at it's fundamental level along with his class envy, not engaged as if it had intrinsic value.
My point wasn't personal, although it may have sounded that way. I apologise.
Well put.
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