Death Tax: Small Manufacturers As ‘Hereditary Elites’???

By June 5, 2006General

Another broadside on the death tax from the WaPo, this one courtesy of Sebastian Mallaby. There are some whoppers in here. Much as we hate to repeat the errors of the opposition, we will, if only to set the record straight. For starters, Mallaby refers to the death tax as, “the tax that limits what the super-rich pass on to their children.” Later, quoting Teddy Roosevelt, he says, “People understood that government has to be paid for, and that it makes sense to raise part of the money from a tax on ‘fortunes swollen beyond all healthy limits.'”

Decrying the alleged loss to the federal treasury, he says, “If the abolitionists [that would be us] succeed, some other tax will eventually be raised to make up for the lost revenue.” Has he not read the non-partisan Joint Economic Committee report that found that this tax actually cost the federal treasury more than it brought in?

Finally, he closes with this: “Repealing the estate tax is like erecting protectionist barriers around the hereditary elite.”

And so we ask again: Do we look like hereditary elite to you? Check out the Death Tax Chronicles and count the “hereditary elites” among them. We’ll save you the trouble: there are none. These are men and women — manufacturers all — who own family companies and will pass the companies on to the next generation. They create jobs, they create prosperity and wealth for their employees and communities. Remember, a $10 million or $20 million manufacturing company is very small. As you’ll see from the comments to our last post on this topic, these are folks who are running small manufacturing companies, trying their level best to compete.

In fairness to the Post, they actually ran an opposing view — supporting permanent death tax repeal — from Sen Jeff Sessions (R-AL). He gets it dead-on right.

So here’s the link if you want to reply to the Post about the Mallaby piece and here’s a link where you can — no, must –drop a note to your Senators, urging them to keep the death tax permanently buried. The vote will likely be this week.

Join the discussion 10 Comments

  • What an embarrassment to live in a country where such legalized robbery from private individuals is allowed and actually promoted! Could we really live in an environment of such extreme hatred, jealousy, and bitterness that we scheme to rob our neighbor who may have been more successful in their lifetime or who may have worked long, hard hours and sacrificed a personal life to build an entity which produced economic advantages for the local, state, and federal population? It is so difficult to believe that such an extreme lack of education and basic moral principals exist in the richest country in the history of the world. Talk about the definition of DE-MOTIVATION for the small business owner!! WOW

  • Robert Longo says:

    I started with nothing. I have paid taxes for 45 years. Why should my children be taxed again on the same money. That’s double taxation. Not a nice thing to do to a dead guy.

  • Joan Renaldo says:

    This tax affects all businesses. How about the farmer that went to Flordia 40 years ago and is farming on 500 acres of land in Boca Raton. This land is probably worth fifth million dollars. When the storm hit three years ago, the roof came off the packing house and the green houses were all distroyed, say nothing of equipment and crops. What portion of this do you sell to settle an estate if you want your third generation to continue farming.

    The point is that it doesn’t make any difference what your estate is worth if you can’t pay the estate tax. I don’t think there are too many businesses that you can sell half of and still keep the doors open. Let us get back to doing what we do best. THE DEATH TAX DESERVES TO DIE.

  • m. c. gill says:

    Repeal this useless, costly tax that punishes the people who make and are entitled to the money while costing the government more than it makes on the tax.

  • George Duane says:

    Death taxes for small businesses means liquidated small businesses, lost jobs, lost means of support for elderly owners and in any event, even the rich have to invest their gains, which makes jobs, creates profits, generates taxes then, etc.

    Scrap the whole thing permanently. It never was a good tax. Only the “feinting hearts” and those that think the rich are burying their excess money seem to favor this stupid tax.

    Pete Duane

  • Harold says:

    Only after we loose the family farm’s and small business’es because of this tax do people say that’s to bad. It can only be considered as greed to have the government take this tax and penilize hard working american’s that went the extra mile to start and run their own companies and employ their neihbors. I think it’s a discrace.

  • John Lenz says:

    My dad has a small business of about 50 employees.
    They say small businesses don’t pay taxes. Maybe if you have a team of lawyers that may be true but for us simple folks 50+ % is plenty. If something is not done with the death tax our company will have to shut down because it doesn’t
    make enough money to pay the interest on the lone I would need to take out to pay the taxes. They say business owners have alot of money, some do,but most live like I do thats just alittle better then the 50 people that will be out of jobs if the death tax is not done away with.

  • We are a small manufacturing plant in the heartland of the USA> We are not hereditary elites and face the probability of selling our small manufacturing plant in order to pay the amount of “death taxes” that may be required. This company and our parents have paid taxes on this property, its profits, the salaries for over 30 years and yet there is more due? Our legislative representatives should know how quick it one can accumulate an estate of 2million. But with this small amount, we cannot afford to pay large amounts for legal and financial “outs” that would keep us from paying once again for an asset that has already generated taxes revenue for over 30 years. Talk about double taxation without representation>>>>Tea anyone???

  • bob williams says:

    I have read and heard people in influential positions speak with authority on the “Estate Tax” and have constantly been amazed at how ill-informed they were or how lacking in character they were. If one is to take a strong position on a subject it would seem they would educate themselves. My son and I operate a 20-year-old industrial chemical business that we started from scratch in our kitchen when he graduated from college. My wife, son, daughter and I are the owners. I am now way past retirement age, but still enjoy helping grow the business. The “Estate Tax”, if not modified to allow for my family to continue to operate and own the business after my death will no doubt result in closing the business for lack of monies to pay the inheritance tax. We have 22 employees and sale of the business to get monies to pay the well over a million dollars tax would see the business taken over by a larger company that would move the business to their current location. My son, who is now 42 years old would be out of a job along with the other employees. Two of the employees were with us from the start. The Estate Tax needs to allow for exempting at least $5 million to allow the several hundred thousand small businesses to pass from one generation to the next.

  • George H. Schirtzinger says:

    The cost to taxpayers of the inheritance tax is not only what the government collects.

    The complliance costs, even to find out no tax is owed, can be significant to a taxpayer of limited means-and every taxpayer has to file (I may be mistaken about this) regardless of the size of estate. Every estate must be valued, which requires appraisals of personal effects and businesses. Then a return must be prepared, filed and government resources used to review said returns.

    Repeal of the tax would relieve taxpayers of the reporting burden and the government of the review burden. The value of this effort and money can be spent on more worthy goals than finding out no tax is due.

    Another fundamental question is should US tax policy follow Marxist tenets? “From each according to his abilities, to each according to his needs” is a basic concept of Marxism and class warfare. Is this how the United States should function? The cruel folly and utter failure of Marxist doctrine as a basis of economnic vitality and political/economic freedom is well established by the Soviet Union, Zimbabwe, and a host of other countries mired in poverty and dictatorship, historically and currently. Is this really how we want to live? Is this what our Constitution and Bill of Rights stand for? Jealousy and envy as a basis of national tax policy? I don’t see that anywhere in the Founder’s beliefs or writings, though I am not expert. What I do see is equality before the law, and an inheritance tax such as ours is not that.

    Scrap the whole damn thing. Many countries have. It is meaningless in the context of how much money government spends per day, and the compliance costs are wasteful, when so few-supposedly-have to pay the tax.