Estate Tax Repeal Proponents Launch New Round of Misleading Attack Ads
by Guest Blogger, 6/24/2002
Repeal proponents may have failed to secure enough Senate support to make estate tax repeal permanent (see this OMB Watch article) in their June 12 vote, but that vote seems to have only strengthened their resolve. They have launched attack ads against a number of Senators who voted to for reform over repeal of the estate tax instead of repeal it. One such ad, a 60-second radio spot targeting Sen. Paul Wellstone (D-MN) can be heard online. Apparently, the ad, sponsored by Americans for Job Security, is being run in several states targeting, in addition to Wellstone, Sens. Tom Harkin (D-IA), Tim Johnson (D-SD), and Jean Carnahan (D-MO). AJS is a conservative business-led nonprofit, an offshoot of the Chamber of Commerce. The Annenberg Public Policy Center provides information about AJS, noting that they are an anti-tax, less regulation, shrink-the-size-of government group. If the Wellstone ad weren’t real, it would be laughable. Unfortunately, it is real and filled with falsehoods, innuendo, and omissions of key facts:
- Falsehoods: In the ad, a farm owner asks his wife, in disbelief, “Paul Wellstone actually voted to tax people because they died?” Despite what repeal advocates may say in their ads and fact sheets, the estate tax is not a tax on death, but rather a tax on the transfer of wealth -- great amounts of wealth, it should be said, from one person to another. More than 98% of estates never even have to file estate tax returns -- it is only those estates valued at more than $1.0 million ($2.0 million for couples) that must file an estate tax return, and this exemption amount will rise to $3.5 million ($7.0 million for couples) in 2009.
- Innuendo: Later in the ad, the man’s wife says that they are going to write to Wellstone and tell him to, “Keep his [Wellstone’s] money-grubbing hands off our farm.” Currently, fewer than 2% of estates -- and an even smaller percentage of farms -- pay the estate tax. Under current law, by the end of this decade, only 75 Minnesota estates will have any estate tax liability. Wellstone, however, actually went a step farther and voted for two different reform options -- one would have exempted all small businesses and family farms; the other would have accelerated the rise in the exemption so that beginning next year estates valued at $3.0 million ($6 million for couples) would have paid no estate tax. Neither of these reform alternatives passed the Senate, but they would have meant that only the top 0.5% of estates across the country would have paid the estate tax by the end of the decade -- and very, very few in Minnesota would have had to pay any tax.
- Omission: The ad’s couple makes the usual claim of pro-repeal advocates and bemoans the fact that, “We're going to have to sell the farm.” But according to recent USDA data, the average value of farms in Minnesota and surrounding states ranges from approximately $686,000 for small farms to $1,847,000 for very large farms. Given that the exemption for couples is currently $2 million, it means that most of Minnesota's family farms are already exempt from the tax -- and by 2009 hardly any would be covered. So if they couple in the ad had to sell the farm, you can bet they must be pretty darn wealthy.