Mickey Mouse, the Estate Tax and Me
But the character's name might surprise you: Oswald the Lucky Rabbit. The Disney brothers' first success wasn't all that lucky for the company. The cartoon's distributor wrested the rights to Oswald away from Walt and Roy almost as soon as he had become popular. This loss was a huge setback for both men, and my grandfather vowed never to let himself be taken advantage of again. He soon registered a copyright on a new character named Mickey Mouse. It was 1928, and it was neither the first nor the last time the Walt Disney Co. benefited from a federal system of protections, laws and taxes that created fertile ground for building a business empire.
In addition to the copyright protections for Mickey, the Federal Communications Commission regulated the airwaves that carried the Disneyland television series and, of course, the Mickey Mouse Club. The transportation and federal highway system built in the wake of World War II took millions of visitors to Disneyland. The Marshall Plan helped rebuild devastated European markets into which Disney poured its products, turning a quaint American company into a global brand.
Taxes are on everyone's mind lately for good reason. Not only will Congress have to make some tough decisions about the Bush tax cuts soon, but if lawmakers do nothing, the estate tax will automatically be reinstated after a year's hiatus — in its 2001 form. A great deal of misinformation is flying around out there about this, but most agree that the tax is flawed and needs to be modified.
One thing I do know is this: In a far stricter tax environment, my grandfather still managed to accumulate and pass on ample funds to make three subsequent generations very comfortable indeed. And as an inheritor I am here to tell you, the estate tax is not as much of a bogeyman as you've been led to believe.
The truth in numbers
Let's start with the facts:
• First, the estate tax is not a double tax. Have you met a multimillionaire who earned that much money pulling down a weekly paycheck? People who make enough to be affected by the estate tax — fewer than 1% of Americans who die in any given year — amass their fortunes by investing. Investment income is taxed differently from earned income, often not at all until it's sold. People like me, who inherit assets such as Disney stock, can spend our lives watching those assets grow, and when we pass them along to our children, they have not been touched or diminished at all by the tax system. The only thing I have paid taxes on is the interest from these assets, not their increased value.
• Second, opponents of the estate tax claim family farms will have to be broken up to pay the tax, but good luck finding an example of this. Further, if the exemption is kept at $3.5 million (where it stood last year) and indexed for inflation, the likelihood of this ever happening is reduced to nil.
• Third, the estate tax incentivizes people like me to do good with our wealth because there is no estate tax on donations to charity. My filmmaking and foundations rely on a tax code that supports a vigorous non-profit sector, a vital part of our society that is bigger and stronger because of the many millions of dollars that flow into it as a result of the estate tax and other tax provisions.
To those who believe the estate tax is unfair, I say that there is no tax more fair than this one. I recently signed the Call to Preserve the Estate Tax organized by United for a Fair Economy because the estate tax is an expression of our deepest American values: that we live in a meritocracy, not an aristocracy; that every generation is a fresh start; and that we choose to build a society in which wealth and opportunity do not accrue to people simply for being born wealthy.
Walt and Roy embody those values: They started without two cents to rub together and made a million wishes come true.
I have seen the business environment in Liberia, for example, a country with no tax revenues. I suspect even my brilliant grandfather would not have been able to build a successful business there. I have been to places like Sudan and Congo and know what it looks like when there is no 911 to call, no schools and where governments are disinterested in working toward the collective good.
Here at home, I have watched the gap between rich and poor driven to historic highs by a tax policy that has exacerbated our deficit and eviscerated our basic capacity to provide schooling, emergency services, and clean water and air for one and all. The estate tax is the cornerstone of a progressive system that leaves wealthy heirs with ample funds while providing the government with the resources it needs to build an environment for the common good. By preserving it, we not only restore billions in revenue to the national treasury — we also restore our most cherished collective ideals as a nation.
"Tax me" may be the least popular sentence in America, but it's what I am asking, and I hope that our leaders are listening.
Abigail Disney is a filmmaker and philanthropist. Her series Women, War & Peace will air on PBS Wide Angle in 2011.
How the Estate Tax Benefits Small Businesses
Don't let opponents of the estate tax frighten you.
Small business owners like me have for too long served as poster children for a misleading campaign led by the super wealthy to weaken or abolish the estate tax. I'm the proud owner of Maine's Borealis Breads, and I want to make something crystal clear: The estate tax impacts neither me nor the vast majority of small business owners. In fact, I support a stronger estate tax.
In 2009, a married couple could leave $7 million tax-free to their heirs. Most small business owners' annual incomes are too little to accumulate enough wealth to pay the estate tax. In 2009, individuals earning less than $82,000 declared 95 percent of all small business income, according to the Congressional Research Service. It should then be no surprise that the nonpartisan Tax Policy Center estimates that fewer than 100 American small business or farm estates were expected to pay the estate tax in 2009.
A provision in the tax cuts passed under President George W. Bush made 2010 the first year since 1916 that estate taxes were not levied, resulting in the loss of billions of dollars in federal revenue. For generations, even with the estate tax in effect, families have been able to pass their small businesses and farms onto their descendents. These same generations of small family businesses have enjoyed and benefited from the unprecedented opportunities found in America.
So if the estate tax has no real impact on an overwhelming majority of small businesses, why then do its opponents so adamantly assert that it does? I believe the answer to that question is that opponents are trying desperately to convince average Americans that they'll be affected by the estate tax. In reality, the estate tax is deliberately designed to affect only society's wealthiest households. [...]
Read the full op-ed by Jim Amaral on OtherWords.org
Dishonoring MLK's Legacy
What do Beck, Palin, and the NRA have to do with the 1963 March on Washington?
"This year's anniversary of the historic 1963 March on Washington promises to be memorable.Though big commemorations aren't typical for 47th anniversaries, thousands will be in the streets on August 28 commemorating the march, including many people advancing a social agenda that would make Martin Luther King Jr. roll over in his grave.
Flamboyant talk-show host Glenn Beck has called for a national rally on the anniversary at the exact same location as the historic protest, the Lincoln Memorial. Beck's rally theme is 'Restoring Honor.' According to his website, this "celebration of America" won't be political. Well then, why have Sarah Palin scheduled to deliver the keynote speech, and why is the National Rifle Association endorsing this right-wing spectacle?
From what I can gather, these folks think that America can restore its honor by strengthening individual virtue, especially if enough people come to Washington on Aug. 28 to listen to inflammatory speeches. Or pick up copies of Beck's new book 'The Plan,' which he'll launch at this absurd event.
What do Beck, Palin, and the NRA have to do with the 1963 March on Washington, where Dr. Martin Luther King delivered the landmark "I Have a Dream" speech? Nothing. Beck has admitted not realizing that the legendary March occurred on Aug. 28. He credits "divine providence" for having his rally/book launch converge with such a historic event. Beck now proclaims that he is working "to finish the job" that was at the heart of King's poetic vision. [...]"
Read the full op-ed by Dedrick Muhammad on OtherWords.org
N.Y. Governor Sings Into Law Limits on Charitable Deductions
"New York Gov. David A. Paterson has signed into law a revenue bill passed by the state’s legislature that limits charitable deductions for “high earners”—a move that has nonprofits and a prominent New York philanthropist worried about a related significant loss in contributions to charity.
The law puts new limits on tax deductions for people with state-adjusted gross income above $10-million annually—about 3,500 taxpayers in New York. Those residents are now able to write off only 25 percent of their charitable contributions on their state income taxes rather than the previous 50 percent.
The provision in the budget plan runs for three years, including the current 2010 tax year.
The charitable-deduction provision could provide up to $100-million in revenue during the current fiscal year for the state, which has had a budget crisis and has sought additional funds. But nonprofit organizations and donors think the change will lead many wealthy people to give less money to charity.
'Charities have been hit from every side in the last three years, including seeing decreases in public funds,' said Abigail E. Disney, a New York philanthropist and film maker. [...]
Read the full column by Grant Williams in The Chronicle of Philanthropy.
"Both capitalists and workers might agree on one thing: it's time to restore the estate tax.
This was the message sent last week by United for a Fair Economy's Responsible Wealth Project. The Bush 2003 tax cuts temporarily suspended the estate tax for 2010, a move that benefits only the wealthiest fraction of American families and adds tens of billions of dollars to the federal deficit.
In a media teleconference on behalf of United for a Fair Economy, labor leader Richard Trumka made the issue clear.
"The estate tax is a progressive tax, and it is the only wealth tax we have," he said.
Trumka, who is the president of the AFL-CIO, noted that if the estate tax bills currently pending in Congress were to pass only a fraction of one percent of estates would be required to pay any taxes.
Small farmers and businesses owners simply aren't valuable to be taxed under the provisions of the estate tax.
The revenue from the estate tax should be used to fund public investment in infrastructure, saving teachers' jobs and providing aid to states with budget shortfalls, Trumka explained.
He noted that the federal deficit remains a long-term issue and should be handled as a structural issue in the future.
"Our economy remains on the edge of a double-dip recession, and we urgently need to create millions of jobs and invest in our future, not give more tax breaks to the wealthy," Trumka said.
"Anyone who pretends to care about cutting deficits while opposing the restoration of the estate tax is clearly residing on a different planet." [...]"
Read the full article by Joel Wendland on PoliticalAffairs.net
"As an 89-year-old successful businessperson who faces the "death tax" issue, I have to respond to the July 19 article by Curtis Dubay ("Harkin Heads Wrong Way on Death Tax").
One of America's problems is that the wealthy and powerful have distorted the tax debate. The tax issue is not whether taxes should be raised or lowered. The tax issue is who should pay the taxes. I am one of those who believe, "People should be taxed according to their ability to pay."
In1928, the richest 1 percent of our population received 23.9 percent of the nation's income. We had a depression. The New Deal, World War II, the G.I. Bill and the Great Society restored our economy. Under President Eisenhower the top income tax rate was 91 percent. The nation and the general population prospered. We were the envy of the world.
I went to Congress in 1975. In the late '70s the income of the top 1 percent was down to 8 or 9 percent of America's total income. The income was more broadly spread and the nation prospered.
Then we made a terrible mistake. The politicians caught tax-cut fever, with a big part of the tax cuts going to the super-rich. That tax-cut fever exists even today. [...]"
Read the full op-ed by Berkley Bedell on DesMoinesRegister.com.
"From running your dog at a city dog park and parking your car, to visitng the local community center, the use of government services can be like feeding a vending machine as residents find themselves nickel and dimed for services that once cost little or nothing. [...]
So where does the money go?
Turning a trip to a city park or public beach into a trip to a vending
machine leaves residents wondering where their tax money goes, said
Karen Kraut, director of the Tax Fairness Organizing Collaborative, a
network of state level advocacy groups at United for a Fair Economy.
It turns citizens into consumers, and creates resentment to use a
public service where everything is a commodity, Kraut said in a
telephone interview with WalletPop.
'In general nickel and diming is less courageous than raising taxes' such as the income tax, she said. The federal government should help states financially, and state legislators should be brave enough to pass progressive tax reform where the highest earners pay more, she said. Paying a $5 fee to go to a park hurts a lot less for a millionaire than it does the average person, Kraut said.
'It's a cheap out by politicians who can't support a broad-based tax increase,' she said. 'It's really a disincentive.' [...]"
Read about 10 public places where you may be nickeled or dimed in this blog post by Aaron Crow.
"I attended Yahoo's Annual Shareholder meeting on June 24, 2010 at the Doubletree Hotel in San Jose, California. About 35 non-employee shareholders and 50 Yahoo employees attended. What a change! No media circus, no hoopla about Icahn's or Microsoft's intentions, and no ill-advised grandstanding by Bostock--just a normal, professional annual meeting. In short, Carol Bartz is simply amazing. She has taken Yahoo from seemingly endless PR disasters to instant credibility. Even Bostock--whose dithering I despise--seems tolerable next to Bartz. In fact, "to dither"--which means, "to be nervously irresolute in acting or doing"--seemed to be Yahoo's motif before Bartz.
Bostock (pronounced, "Bah-stock") opened the meeting by introducing Yahoo's Board of Directors and Executive team. (I was happy to see Brad Smith, Intuit's CEO and Yahoo Board member, at the meeting. Intuit's consistent ability to deliver strong products makes it an excellent partner to have.) Bostock said that Bartz had acted "decisively" and the Yahoo team had "made enormous progress." He turned the podium over to Yahoo's general counsel, who handled the formal portion of the meeting.
Yahoo's general counsel did a fantastic job. After hearing Responsible Wealth's representative Lincoln Pain introduce a shareholder proposal ("Say on Pay"), Yahoo opened the floor for comments on the proposal, limiting statements to two minutes. Yahoo's approach to shareholder proposal comments creates a good balance between too much information and too little information. Too many companies won't allow shareholders to comment on proposals or go the other direction and allow shareholders unlimited time. [...]"
Read the full blog post on Gotshares.com
"The question of death and taxes has risen to the fore in Washington as the demise of prominent billionaires has underscored a fluke which allows big estates to escape taxes, but only for this year.
Highlighting the conundrum has been the death of wealthy Americans including oil tycoon Dan Duncan and New York Yankees baseball owner George Steinbrenner, who can pass on their fortunes to heirs with no taxes. Duncan's fortune was estimated at nine billion dollars and Steinbrenner's at 1.1 billion by Forbes magazine. [...]
Some activists say the estate tax is progressive because it distributes wealth from the richest; but critics deride it as a "death tax" and claim it hurts farms and family businesses when an owner dies. [...]
Some wealthy Americans have been supporting a new estate tax, even if it may cost them a hefty sum.
A group of millionaires and heirs to major fortunes joined a call in July by United for a Fair Economy, a group fighting economic inequality, for a new estate tax.
Among those joining the call were hedge fund manager Julian Robertson and Abigail Disney, grandniece of Walt Disney. [...]"
Read the full AFP column by Rob Lever on Google News