St. Petersburg Times Online: Business
 Devil Rays Forums

printer version

Just this once, can't the rich pay their part?

Click here

© St. Petersburg Times, published July 26, 2000

From the guy selling hot dogs on the corner to the folks at the country club, most Americans agree with the Republicans who run Congress -- they want to get rid of the federal estate tax.

Why should Americans (according to this argument) work hard all their lives, build up a little something, and then have the government gobble it up?

Why should family businesses be destroyed? Why should children have to sell off their family farm or business to meet this cruel tax burden?

A solid majority of Americans, more than 60 percent, support repeal, according to a Gallup poll taken in June.

Eager to please, Congress has already voted to kill the "death tax." The Republicans expect that President Clinton will veto their bill, so they can use the issue in this fall's campaign.

There is just one tiny little problem:

The argument against the estate tax is almost entirely bogus.

Here is the truth:


The tax does not apply unless an estate is worth more than $675,000. That will increase to $1-million by 2006.

Admittedly, $675,000 is conceivably within reach of the upper middle class, especially with a house or business of a decent size.

But even so, the tax does not touch 98 out of 100 estates. With only the slightest of estate planning, married couples can double their tax exemption.

Spouses do not pay at all when the other spouse dies. As for family-owned businesses and farms, they get even higher exemptions -- no taxes on estates of up to $1.3-million, or again, much higher with estate planning.

Neither is anybody ever forced to sell anything to pay taxes. They have up to 14 years to pay their tax bill when a family business or farm is more than 35 percent of an estate. And the interest is a lot less than the rate YOU pay when you don't fork over your income taxes on time.

(These figures come from the Center on Budget and Policy Priorities in Washington, D.C., a non-partisan think tank. You can look it up at Perhaps you still are saying:

"Well, I am not rich now, but maybe one day I will be. Besides, it's the principle of the thing. Why should people be taxed twice -- once when they earn their money, and again when they die?"

The answer is, the majority of the money in question was NEVER taxed. It was built up in investments and trust funds, dividends and interest earnings and capital gains and appreciation.

Michael Kinsley of Slate magazine points out that even a kid frying hamburgers at McDonald's has to pay the Social Security tax. But if the estate tax is abolished, the average billionaire will pay a lifetime tax rate of ... zero.

"Is it really so unreasonable," Kinsley writes, "for the luckiest 2 percent to pay some taxes on their good fortunes at least once in a lifetime?"

On top of all that, there are social questions. Does America want to switch now to a system encouraging permanent, hereditary aristocracy? What will happen to the great tradition of American charity -- Ford, Mellon, Gates, and all those guys -- if they no longer need the tax dodge?

Face it. The real agenda here is to help the rich while making the rest of us believe a lie. At least Bill McCollum, the Republican candidate for Senate, was honest about his motive when I asked him Tuesday: He opposes taxes based purely on "redistribution of the wealth."

Do not forget that the Baby Boom generation is coming due for Social Security and Medicare, and the slightest bump in the economy will erase all these predicted budget surpluses -- which make tax cuts possible.

Here was the national debt as of Tuesday:


Let's pay it down. That benefits all of us, instead of 2 percent of us.

Back to Tampa Bay area news

Back to Top
© St. Petersburg Times. All rights reserved.

  • Just this once, can't the rich pay their part?
  • Coe got raises for his employee lenders
  • Water plan passes first challenge