Because it's just TOO good not to!
Core Democratic tennant #2. Democrats shouldn't embrace the consolidation of ridiculous amounts of wealth which are passed on to descendants and create an economic aristocracy in America.
I wrote this about Ford a few months ago.
Harold Ford, Wal-mart and the Estate Tax
A couple weeks ago, I was reading an article in The Nation.
http://www.thenation.com/doc/20051121/featherstone
It was about Wal-mart and the descendants of Sam Walton new-found interest in politics and right-wing causes. Sam Walton used to give almost nothing to political campaigns or philanthropic groups. All that changed after Sam Walton died and especially since the 1998 election cycle. Here are Wal-mart Stores PAC total campaign contributions from http://www.opensecrets.org
1998: To Federal Candidates $135,750
7% to Democrats 93% to Republicans
2000: To Federal Candidates $457,050
14% to Democrats 85% to Republicans
2002: To Federal Candidates $1,081,000
22% to Democrats 78% to Republicans
2004: To Federal Candidates $2,633,783
22% to Democrats 78% to Republicans
2006: So Far To Federal Candidates $321,300
30% to Democrats 70% to Republicans
The Wal-mart Store PAC is now the third largest corporate PAC and the second-largest corporate donor to the Republican Party. What really caught my attention about this article was the Estate Tax. The combined family fortune of the Waltons is $90 billion. Now they have a vested interest in getting rid of the Estate Tax. Over the past few years, the Wal-mart Store PAC has given money to Democratic members of Congress who support the repeal of the Estate Tax.
Some of the most known locally are Blanche Lincoln and Harold Ford Jr. In fairness to Ford, he wanted to repeal the Estate Tax before he started getting money from the Wal-mart Store PAC, but he has been well compensated by it since 2002 for his continued advocacy. Here are the campaign contributions Ford has received from the Wal-mart Store PAC:
1998-$0
2000-$0
2002-$7,500 Only 8 other Democrats received as much or more as Ford.
Wal-mart Store PAC was Ford’s 10th highest PAC donor.
2004-$12,250 Only 7 other Democrats received as much or more as Ford.
Wal-Mart Store PAC was Ford’s 9th highest PAC donor.
2005-$5,000 Ford tied Hillary Clinton for most given a Democrat and only second to George Allen.
Here were Ford’s positions on the Estate Tax as of 2001.
Voted YES on eliminating the Estate Tax.
Vote to pass a bill that would gradually reduce revenue by $185.5 billion over 10 years with a repeal of the estate tax by 2011.
Reference: Bill sponsored by Dunn, R-WA; Bill HR 8 ; vote number 2001-84 on Apr 4, 2001
Voted YES on repealing the estate tax ("death tax").
Vote to pass a bill that would completely eliminate taxes on estates over a 10 year period at an estimated cost of $105 billion as well as $50 billion each year after the repeal of the tax is complete in 2010.
Reference: Bill sponsored by Dunn, R-WA; Bill HR 8 ; vote number 2000-254 on Jun 9, 2000
Ford sponsored the Death Tax Elimination Act:
Title: To amend the Internal Revenue Code of 1986 to phaseout the estate and gift taxes over a 10-year period.
Summary: Repeals, effective January 1, 2011, current provisions relating to the basis of property acquired from a decedent. Provides with respect to property acquired from a decedent dying on January 1, 2011, or later that:
1. property shall be treated as transferred by gift; and
2. the basis of the person acquiring the property shall be the lesser of the adjusted basis of the decedent or the fair market value of the property at the date of the decedent's death.
3. Requires specified information to be reported concerning non-cash assets over $1.3 million transferred at death and certain gifts exceeding $25,000.
4. Makes the exclusion of gain on the sale of a principal residence available to heirs.
5. Revises current provisions concerning the transfer of farm real to provide that gain on such exchange shall be recognized to the estate only to the extent that the fair market value of such property exceeds such value on the date of death.
6. Provides a similar rule for certain trusts.
7. Amends the special rules for allocation of the generation-skipping tax (GST) exemption to provide that if any individual makes an indirect skip during such individual's lifetime, any unused portion of such individual's GST exemption shall be allocated to the property transferred to the extent necessary to make the inclusion ratio for such property zero; and
8. if the amount of the indirect skip exceeds such unused portion, the entire unused portion shall be allocated to the property transferred.
9. Provides that, if an allocation of the GST exemption to any transfers of property is deemed to have been made at the close of an estate tax inclusion period, the value of the property shall be its value at such time.
Source: House Resolution Sponsorship 01-HR8 on Mar 14, 2001
http://www.issues2000.org/House/Harold_Ford_Tax_Reform.htm
Fortunately, Ford has slightly modified his position on the Estate Tax as of April 2005.
“Ford's bill would have reduced the estate tax by raising the exemption on estates from $1.5 million to $7.5 million for individuals and from $3 million to $15 million for couples. It would have reduced the tax on the portion above the exempt limit from 47 percent to 27.5 percent.”
http://www.fordfortennessee.com/index.php?option=com_content&task=view&id=23&Itemid=34
Now, supporters of Estate Tax repeal or reform always say that they want to help small businesses and family farms. The problem is family farms and small businesses aren’t hurt by the Estate Tax. Here is the Congressional Budget Report from July 2005 about the Estate Tax.
July 2005 Congressional Budget Office:
Report on Effects of Federal Estate Tax on Farms and Small Businesses
This taken from the summary:
“Under current law, if someone dies in 2005 and leaves an
estate worth more than $1.5 million, the estate must file a
return and pay taxes of 43 percent to 47 percent on assets
(minus various deductions) above that dollar threshold.1
Under the Economic Growth and Tax Relief Reconciliation
Act of 2001 (EGTRRA), estate tax rates will decline
—and the amount of net assets exempt from taxation will
increase—through 2009, at which point the tax will
equal 45 percent of an estate’s net assets over $3.5 million.
The estate tax is then eliminated in 2010. However,
if EGTRRA expires as scheduled in 2011, the tax will be
reinstated that year, at rates ranging from 41 percent to
60 percent on net assets of more than $1 million. The
federal estate tax is projected to raise around $20 billion
to $30 billion in revenues annually through 2011 and
roughly double that amount in the next few years thereafter.
In recent years, fewer than 2 percent of all estates have
had to pay estate taxes. But critics argue that the tax may
pose a particular hardship for a small business or family
farm. If building up such an enterprise results in a taxable
estate without enough liquid assets to pay estate taxes,
heirs may have to wholly or partially liquidate the business
or farm. Purchasing sufficient life insurance might
prevent that problem, but the ongoing cost of paying premiums
would reduce the cash flow available to invest in
the enterprise. In addition, critics charge, because the
estate tax lowers the rewards from investment, a business
owner or family farmer wishing to leave the enterprise to
his or her heirs may be less inclined to invest in it or to
hire workers—or may even be dissuaded from starting
the business.
The amount of estate tax owed on a farm or business can
be reduced in several ways. If a decedent has left heirs
minority interests in a business, the estate may claim a
reduced value for those interests for tax purposes, thus
lowering the taxable value of the estate. In addition, until
2004, family-owned businesses could take a special
deduction—the qualified family-owned business-interest
(QFOBI) deduction—to lower their estate taxes. Moreover,
certain types of businesses can spread their tax payments
over 15 years in some circumstances. For farmers, a
special method of calculating the value of a family farm
can lower the amount of estate tax owed. Finally, as the
amount of assets exempt from taxation increases under
EGTRRA, the estate tax will affect fewer small businesses
and farms (at least until the law expires).”
“Affordability of the Estate Tax Information about whether the estates of farmers and small-business owners can afford to pay estate taxes comes primarily from tax returns. CBO’s analysis examined data from estate tax returns filed in 1999 and 2000
(the most recent data available when the analysis was conducted).
Determining from tax returns what constitutes a
family farm or small business is difficult, however. Returns
identify the decedent’s occupation and industry, but
those categories are broad. For lack of better identifiers,
this analysis considered the estates of farmers to be those
reporting an occupation of either farmer or farm worker
(about 4,500 estates per year) and the estates of smallbusiness
owners to be those claiming the QFOBI deduction
(about 1,500 per year).
The vast majority of estates, including those of farmers
and small-business owners, had enough liquid assets to
pay the estate taxes they owed. However, estates involving
farms or small businesses were less likely than the average
estate to have sufficient liquid assets to cover their estate
taxes. In 2000, about 8 percent (or 138) of the estates of
farmers who left enough assets to owe estate taxes faced a
tax payment that exceeded their liquid assets, compared
with about 5 percent of all estates that owed taxes. For
estates claiming the QFOBI deduction, the corresponding
figure was about 34 percent (or 164 estates). Those
numbers are upper bounds, however, because the definition
of liquid assets used on estate tax returns excludes
some money held in trusts, which could also be used to
pay estate taxes.”
http://www.cbo.gov/ftpdocs/65xx/doc6512/07-06-EstateTax.pdf
This talk of the Estate Tax hurting family farms and small businesses is a load of crap. I would like to hear more on Ford’s position on the Estate Tax and why Wal-mart is such a big supporter of his campaigns.
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