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What The Media Tell Americans About Free Enterprise

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Friday, June 16, 2000

Volume 8, Number 12

Liberal Experts Featured, Conservative Experts Excluded From TV’s Death Tax Coverage

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.

On 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 politically-motivated fable.

"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 rich."

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 support."

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 to lie."

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 billion."

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 the House.

Rich Noyes


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