Sunday, August 10, 2008

Sorry, Wall Street Journal

It turns out the estate tax isn't quite the villian it's made out to be in the Steelers' ownership dispute:

On the surface, the estate tax seems daunting -- 45 percent on all estates above $2 million in value. With the Rooneys' 80 percent share of the franchise being valued at $800 million or more on the open market, that would seem to make the family liable for hundreds of millions of dollars in tax liabilities.

In reality, though, few estates pay the full estate tax rate, and there is almost no evidence that any family-owned enterprises have had to dissolve or sell out because of the federal tax, said Ben Harris, a senior research associate at the Tax Policy Center in Washington, D.C., a joint operation of the Brookings Institution and Urban Institute.

The tax center estimates that 17,500 estates will pay about $23 billion in federal estate taxes this year, for an average payment of just $1.3 million. Even the wealthiest estates -- those worth more than $20 million -- will pay an average tax rate of about 22 percent, less than half the official rate, the center estimates.

"The destruction of family businesses is often used as a motivation for repealing the estate tax, but there is very little proof that many family businesses are devastated by the tax," said Samuel Donaldson, a law professor at the University of Washington and a nationally known expert on estate tax matters.

"There are very few ways to get around the tax entirely," he added, "but there are any number of ways to reduce the tax." (link)

Labels: ,


Blogger Schultz said...

The bigger picture is that the estate tax is not the villain that the Republican party makes it out to be, so, another sorry should go out to the Republican party who have made eliminating the estate tax a cornerstone of the agenda throughout the Bush years.

When the wealthiest man in the US, Warren Buffet, has argued for years in favor of estate taxes, and then now this research comes out, I think it's time that the estate tax debate is finally retired.

10:33 AM


Post a Comment

Subscribe to Post Comments [Atom]

<< Home