Okay, let me see now… an estate tax has been on Washington’s books since 1901, but just two months ago, the State Supreme Court tossed it due to the phasing out of the federal estate tax to which ours was linked by a 1981 initiative. The Legislature is now prepared to reinstate the estate tax, that has been off the books for only two months, while more than doubling the exemption to $2 million. And according to opponents… this is going to drive businesses out of state?
“I would support a higher sales tax, even an income tax in this state, rather than having a death tax installed,” said Don Root, who wants his sons to carry on his Seattle-based manufacturing and design company after he dies.
Reinstating an estate tax at the same time the federal government is poised to abolish it would cause successful Washington businesses to leave the state, taking a lot of good jobs with them, said Root, whose company employs roughly 450 people in Washington.
I appreciate Don Root’s endorsement of a state income tax, and I urge him to evangelize the rest of the business community. But somebody please explain to me how his logic on the negative impact of an estate tax is not a total load of crap?
Washington heirs have been paying an estate tax for 104 years — and on much smaller estates than proposed in the new budget — but now suddenly, because the tax lapsed for two months, a new-found class consciousness is going to drive the wealthy out of state? Was Root planning to move his business out of state before the February ruling? If not, why, and if so, has anything really changed? Is anybody actually suggesting that our estate tax has been driving jobs out of state since 1901?
This is not a new tax. It is a tax that we have been levying for over a century, and as William Gates Sr. points out, it is an extremely fair tax.
“The question is, why are people wealthy?” Gates said at a news conference last week. “They worked hard, they’re smart, and they are American … (with) a police force that works, a court system that works, a market system that makes it possible to dispose of what you own. Economists tell us that having a stable market adds 30 percent to the value of everything you own.”
I’m not going to argue that an estate tax will never force heirs to sell off a family business… perhaps it occasionally does. But when our highly regressive tax structure is so cruelly unfair to middle- and lower-income households, I find it incredible to think that we should shift even more tax burden onto working families because a handful of multi-millionaires think an estate tax is unfair.
I’m not sure what’s more offensive: the selfish efforts to secure yet another tax break for the wealthy, or the bogus and insulting economic threats with which they are trying to sell it.
The Seattle P-I editorializes in support of retaining our state estate tax:
Gov. Christine Gregoire’s proposed revised estate tax would only apply to about 250 people per year yet would generate $129 million for essential government programs. This is a tax that makes sense.