|Washington state has rejected class warfare before|
In a widely disseminated guest editorial, Rick Bender, president of the Washington State Labor Council, attacked Initiative 920 with all the class-warfare and school-closings pixie dust he could scoop from his rhetorical jar.
None of what he said was new and Washingtonians have rejected it all before. But persistence often prevails when voters let down their critical attention spans.
I-920 only seeks to take some of the fear of dying away from parents who would like to leave their surviving loved ones the small businesses or family farms they spent a lifetime building. Congress thought this was such a good idea, that it abolished the federal death tax in 2001 for nine years. It will be interesting to see if U.S. Senators Maria Cantwell and Patty Murray, whom Bender praised for their recent vote against making the repeal permanent, will vote to bring it back in 2011.
Washington voters beat Congress to the punch 20 years earlier by passing a ballot initiative in 1981 that abolished the state's death tax. But the Washington Legislature, in an attempt to grab extra money, passed a new death tax in 2005 and then used it to finance education.
Bender's worry about the effect abolishing the state's death tax would have on our schools is disingenuous, to put it mildly. After the Washington Supreme Court ruled the state had no authority to continue collecting the death tax, lawmakers shifted some of the revenues from it to schools in order to circumvent the court's decision, arguing that it was needed to finance Initiatives 728 (class-size reduction) and 732 (cost-of-living raises), in spite of the fact that both initiatives' proponents claimed it would never cost an extra tax dollar and in spite of the fact that state revenues grew by 7 percent last year.
One thing is for certain in all of this, the "super rich," whom Bender claims are the sole beneficiaries of death tax relief, do not pay the tax. It is these people who have the money needed to protect themselves with trust funds, foundations and insurance. A good tax attorney knows what to do, if you're lucky enough to afford one.
Not so lucky are thousands of small-business owners and family farmers trapped in spending, on average, $20,000 in legal fees, $11,900 for accounting fees, and $11,200 for other advisors, according to the Family Enterprise Center. In another study by Travis Research Associates, they found family farms and businesses spending $125,000 per company on life insurance and fees for attorneys and consultants in order to avoid it.
In his testimony before Congress, small-business owner Brad Eiffert said the $52,000 a year he spends on insurance premiums to avoid the death tax could be used instead on hiring another employee or on purchasing another piece of equipment.
But many small and mid-sized businesses do not have the money to avoid this unfair tax, because money must be put back into the business to keep people employed and protect the business from an ever-increasing competitive market dominated by those who profit from buying up small businesses and turning our Main Streets into Wall Street carbon copies. Many times, the very "super-rich" who oppose abolishing the estate tax are the same people who are looking to buy small businesses whose heirs can't afford to keep the business going and pay the tax, too.
So let's take stock: Washington voters repealed the state's death tax in 1981 and their own state's Supreme Court ruled unanimously that it is wrong for the state to keep collecting it; Congress, with bipartisan support, set the federal death tax on a path to permanent repeal in 2011. The people - rich, poor, and middle class - have spoken.
Rick Bender writes, "I hope I have instilled in my children the values of hard work [and] playing by the rules."
The working families who have built businesses that employ more than 51 percent of the state's private sector workforce teach their children these same values and more, such as how to keep the business going, keep workers employed, keep the state's economy going, and how not to have to sell out to a global conglomerate.
Carolyn Logue is the Washington state director for the National Federation of Independent Business.
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