I was really taken aback and terribly upset by Roger Russell's article, "Calls increase for estate tax repeal," (Accounting Today, Jan. 7-27, 2008, page 10), which repeats many of the well-worn shibboleths concerning the estate tax. By blatantly repeating the propaganda of the National Association of Manufacturers, Mr. Russell does not do Accounting Today or its readers a service.
The fact that the NAM claims that one third of small business owners say they would have to "sell or liquidate part of their business to pay estate taxes" represents grossly uninformed opinion. For example, my barber, a small business owner, claims that he is going to have to sell his business because of the unfair estate tax. When I told him that he would have a $2 million exemption should he die in 2008, he could not fathom that. As with most small business owners, he was totally unaware of the $2 million (he is married -- and therefore the exemption could possibly be $4 million) that might be exempt from estate taxes or the other small business benefits provided by the current estate tax regime.
For many years, the American Farm Bureau Federation and the NAM keep repeating false information of the consequences to farms and small businesses of the estate tax. However, in a recent front page article in The New York Times, David Cay Johnston quoted an Iowa State University economist whose tax advice has made him a household name among the Midwest farmers who said, "He had searched far and wide but had never found a case in which a farm was lost because of estate taxes -- it's a myth."
I am also surprised that Senator Grassley is quoted as saying that the nine-month due date forces survivors to liquidate assets in economically poor circumstances. Doesn't Sen. Grassley (and the author) realize that there are provisions in the estate tax law that provide for long-term payouts of estate taxes where an asset such as a farm or small business makes up more than 35 percent of an estate?
I could go on and on with statistics and examples, but I know most of your readers are more savvy than to accept the NAM's assessment of the need to repeal the federal estate tax.
Why not quote Warren Buffett, who said in a recent interview that, "It is dead wrong to call the estate tax a 'death tax.' It would be more appropriate to call it a 'death present.' A meaningful estate tax is needed to prevent our democracy from becoming a dynastic plutocracy."
Stuart Kessler, CPA
RSM McGladrey Inc.
New York City
