Ten years ago, a Japanese businessman named Ryoei Saito bought a
famous, 100 year old Vincent van Gogh portrait of Dr. Paul-Ferdinand
Gachet, the physician who treated the artist at the end of his life.
Saito paid $82.5 million, which today remains the largest sum ever
paid for a painting.
Ryoei Saito was a very rich man and, like a lot of rich men, he
hated taxes. He told his friends that when he died he wanted the van
Gogh painting destroyed — burned — so his heirs wouldn’t have to pay
Japan’s exorbitant inheritance taxes.
Saito was probably joking, but it is unclear what exactly
happened to the painting after his death in 1996. Some reports say
it was purchased by an American who demanded anonymity; others say
it remains locked away on Saito’s estate.
In any event, Saito’s rage against estate taxes would probably
perplex many of the journalists who were sent to cover last week’s
vote in the House of Representatives to abolish the U.S. inheritance
tax by 2010. On television, both CBS and NBC supplied airtime so
that liberal pro-tax crusaders could decry the House vote, while
neither cited any of the conservative experts who argue that repeal
of the "death tax" is in the broader public interest.
CBS, reporter Diana Olick began her report for the June 9 Evening
News with the story of a woman, Jeanine Mizell, who was forced
to raise $250,000 in cash just to keep her family’s lumber mill in
business after the death of her parents. Mizell, who would have had
to sell the mill if she couldn’t otherwise pay the IRS, told CBS
that she thought the heavy tax was "very unfair." Olick, however,
belittled the beleaguered taxpayer’s complaint as a
"It’s exactly the story Republicans used over and over today
before they voted to kill the death tax," Olick reported. "So why
has such a tax that punishes the little guy lasted 84 years?
Because, some say, the Republican story is more like a fairy
tale....The fact is, because of large tax exemptions, the farms and
businesses Republicans are talking about make up just three percent
of all taxable estates. The rest are the really rich."
"And," Olick added, "Democrats argue cutting the whole death tax
will cut out $400 billion in revenue over the next decade."
Olick’s story untruthfully cast the estate tax debate in sharply
partisan terms — Republicans were for repeal, Democrats were against
it. In his introduction, CBS anchor Dan Rather reminded viewers that
"President Clinton calls [repeal] an expensive tax giveaway to the
Across the dial, reporter Anne Thompson gave NBC Nightly News
viewers a much more complete version of the House vote in the
newscast’s lead story. Thompson correctly reported what CBS failed
to mention — that the final vote to repeal the tax was an
overwhelming 279 to 136, and that about a third of House Democrats
had joined with Republicans to give the bill "broad bipartisan
Thompson also cited polls showing broad public support for the
House action and showed a small businessman who expects his family
will be hurt by the tax.
But the NBC correspondent, like Olick, allowed spokesmen for
liberal advocacy groups to sharply criticize the House action
without any rebuttal. Thompson interviewed Robert Greenstein from
the Center for Budget and Policy Priorities, who said that "what the
House did today will ultimately lose $50 billion a year," and her
story also quoted unnamed "critics" who speculated that the repeal
measure could hurt charitable giving.
Olick’s story featured Robert McIntyre of Citizens for Tax
Justice, who flatly stated that Republicans are liars. "Imagine if
they got up on the House floor and said we want to give $100 million
to Bill Gates or Warren Buffett or some other really wealthy
person?" McIntyre told Olick. "They’d be laughed out, so they have
Neither CBS nor NBC balanced the liberals’ contention that a huge
percentage of every rich person’s estate rightly belongs to the
federal government with the views of conservative experts who
disagree. But William Beach, the Director of the Center for Data
Analysis at the Heritage Foundation, wrote a short
memo prior to the vote that provided useful counter-arguments
that should have been included in a balanced report.
Beach provided evidence that estate taxes hurt both the owners
and working-class employees of small businesses and that they
undermine savings and investment by encouraging individuals to spend
more while they’re alive in order to leave smaller estates. He also
noted that estate taxes are less of a problem for the "really
wealthy" individuals that liberals like McIntyre especially want to
tax, since the wealthy can afford to spend more on tax planning to
escape severe penalties.
Beach also demonstrated that, contrary to the what liberals like
Greenstein say, the tax is a very poor source of revenue for the
government. "Death taxes raise just slightly more than 1 percent of
total federal revenues, but according to one 1994 analysis, total
compliance costs (including economic disincentives) amount to about
65 cents for every dollar collected," he wrote.
"Other studies, which subtract disincentives and examine only
direct outlays by taxpayers to comply with estate tax law, put the
compliance cost at about 31 cents per dollar," Beach continued.
"This additional cost means that the $27.8 billion collected in
federal death taxes last year actually cost taxpayers $36.4
In other words, killing the death tax may not cost anything, and
could end up saving taxpayers billions every year. But that’s a part
of the argument that you wouldn’t discover from watching either CBS
or NBC last week, where the only "experts" able to promote their
views were the liberals who were on the losing side of the vote in