Wednesday, February 08, 2006
Editorial: Death and taxes: Only one's still certain
Virginia plans to repeal the estate tax so that a few, very rich families can avoid paying transfer taxes. Gov. Kaine should abandon such folly.
From the RoundTable blog
Read the latest entries
Even the gullible have stopped believing the well-worn myth about the poor family farm being forced onto the auction block to satisfy the government's unbridled zeal to tax people long after they were cold in the ground. So lawmakers, in their fervor to repeal Virginia's estate tax, have come up with a new death tax legend -- green flight.
Even Gov. Tim Kaine is spreading the myth: If Virginia continues to levy a tax on the transfer of wealth, then the wealthy will flee their mansions for more tax-friendly neighborhoods. Kaine explained, "It's as Wayne Gretzky says, 'You don't skate to where the puck is, you skate to where it's going.'"
Kaine fails to score with his misbegotten analogy. Instead, he deserves a good, long timeout in the penalty box where he can await the regaining of his cooler head that voters expected him to keep.
Fretting that the super wealthy are going to forsake Virginia simply because it has an estate tax is grounded in as much reality as the legend of the greedy government taking food from the table of a farmer's widow and orphans. It's simply the latest best-selling fiction sweeping through Richmond.
That the super wealthy pay the highest percentage rate and dollar amount in estate taxes is true. But very, very few Virginians have amassed enough wealth during their lifetimes for the government, upon their deaths, to collect levies when that wealth is transferred to their heirs.
According to the state Department of Taxation, of the 1,866 estate tax returns filed in 2005, only 871 reported any tax liability. Some 298 of those returns were on estates valued at $1 million or less, with the tax owed on average about $12,400 -- not exactly an amount that would send the wealthy to the poor house.
And when it comes to the super wealthy -- the ones who paid millions in estate taxes -- just 14 estates last year were worth more than $10 million.
The state's own records show that fewer Virginians are liable for the estate tax than attend a Roanoke Vipers game. And for them, the handful of super wealthy, Virginia should forgo $140 million a year in much-needed revenue?
Surely, Gov. Kaine will see through this shameful ruse and demonstrate the wisdom to veto this travesty, just as Gov. Mark Warner did before him.
