Kicking off in a moment or two is the Senate Finance Committee’s hearing, “Federal Estate Tax: Uncertainty in Planning Under the Current Law.” Eugene Sukup, chairman of the board of Sukup Manufacturing in Sheffield, Iowa, will be testifying. His testimony is available here. It’s very, very good:
I’m not bragging when I tell you that businesses like Sukup Manufacturing are the backbone of our economy. By the same token, when a business like ours is sold off or shuttered, the loss to the economy is great. If Sukup closed today, 350 people would lose their jobs. But, that’s just the beginning. Without jobs, there’s no reason for a child care center. As people move on to other places, the restaurants and stores close down, the dentist moves to a bigger city with more customers. The loss would be felt in Iowa, in Arkansas, in South Dakota.
Now, to be clear, we’re a growing company. So, why would we close down or sell off? I’m here today to tell you that one of the greatest threats to our family-owned business is the estate tax. If my wife Mary and I died today, we estimate that our estate tax liability would be somewhere between $15 and $20 million dollars. The only way for my sons to pay that tax would be to sell off the business.
Unfortunately, eliminating the death tax as a policy matter has slid down the Congressional priority list this year (political, electoral realities), but the economic damage it wreaks remains shocking.
We’re curious about how the media will cover today’s hearing. Warren Buffett is testifying, and he’s a legitimate big deal. Besides he offers the supposedly sexy, counterintuitive storyline: Billionaire wants to be taxed more.
But you know, there’s one Warren Buffett, and there are many, many business owners who find themselves in the circumstances faced by Mary and Eugene Sukup. What’s the real story? One inconvenienced billionaire or shattered businesses, lost jobs and damaged communities?
UPDATE (10:35 a.m.): This column, “The Oracle of the Death Tax,” by Grover Norquist is pretty rough rhetorically (yeah, some surprise), but it does provide a lot of useful background on Buffett’s “naked self-interest” in support of the death tax.
UPDATE (12:35 p.m.) Link to Sukup’s testimony fixed.
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