- The Washington Times - Tuesday, April 10, 2001

As quiet as it has been kept among anti-tax cutting Democrats here in Washington, broadcast executive Robert L. Johnson, publisher Earl Graves and auto supplier Dave Bing, a native Washingtonian and former NBA star, and several other wealthy blacks, have taken on the estate tax. Their stand places them side by side with President Bush, who yesterday sent his $2 trillion budget to Capitol Hill.

"The estate tax is particularly unfair to the first-generation of high net worth African-Americans who have accumulated wealth only recently," Mr. Johnson and others say in a full-page advertisement that recently ran in the New York Times. "These individuals may have family members and relatives who have not been as fortunate in accumulating assets who could directly benefit from their share of an estate as an heir."

More than three-dozen black business leaders argue, and rightfully so, that an estate tax is a double tax and a particular threat to family run businesses. Many such businesses are owned by blacks, Asians and Hispanics, and in order to keep those businesses in the family, they must accumulate vast resources, hire estate planners and dole out large sums of cash to ensure Uncle Sam gets paid as soon as the grim reaper rides off.

For the Rockefellers, that is second nature; for the black family who own a chain of successful neighborhood beauty salons or a small trash-removal firm, it can be a disheartening experience. For example, if the owner dies and his investment portfolio is worth, say, barely $1 million, his heirs will not have to pay taxes on the first $675,000. However, Uncle Sam can tax the remainder at a whopping 39 percent. To a $1-million-a-year-family-run business, that probably means liquidating assets and may likely mean a going-out-of-business sign to boot.

Businesses view it as nothing short of extortion, and, as far as Mr. Johnson and other supporters of the repeal are concerned, an unjustifiable drain on black capital. Consider Mr. Johnson himself, who was born in Hickory, Miss., and who founded Black Entertainment Television (BET) in 1980. He is now worth $1.5 billion. Consequently, he has to pay between $200,000 and $300,000 per year in insurance premiums.

Of course, the major rub is that "the estate tax is unfair double taxation since taxpayers are taxed twice, once when the money is earned and again when you die," the ad says. And, those same dollars are taxed at interim levels (after earnings to, say, shareholders and again as investment earnings) as well.

Mr. Bush has urged Congress to repeal the dreaded estate tax, and some of America´s most successful businessmen (albeit unlikely Bush allies) are urging the same. What´s even more interesting is these black businessman have taken on Bill Gates Sr. and the wealthy white establishment, darlings of the New York Times´ editorial page, whose own ad urged the U.S. government to continue taking its grim share. Obviously, Mr. Johnson and his supporters are on target.

LOAD COMMENTS ()

 

Click to Read More

Click to Hide