I’m not much of a sports fan, but the recent news coverage on George Steinbrenner’s death sent me to the internet looking for the backstory on how he came to be the principal owner of the New York Yankees baseball franchise. (I was curious as to whether or not the team was inherited. It wasn’t. Steinbrenner did, however, make his fortune in a business started by his grandfather.) Anyway, in the process of looking around the internet, I happened across this article on Salon about how, thanks to Bush’s rollback of the estate tax, Steinbrenner’s children would pay no taxes on his $1.15 billion fortune. Here’s a clip:
…This year, for the first time in nearly 100 years, there is no federal estate tax at all. That is great news for the heirs of George Steinbrenner. His estimated net worth at the time of his death earlier this week was $1.15 billion. Last year, Steinbrenner’s heirs would have distributed the healthy sum of $630,000,000 among themselves (not counting possible state taxes). This is the amount their inheritance would have been after federal estate taxes had been levied. As nice as $630,000,000 sounds, it’s nothing compared to what Steinbrenner’s heirs will receive now, since the billionaire Yankees owner chose this year to die. His heirs will now receive $1,150,000,000 (less possible state taxes). This is money that they personally did little or nothing to earn.
At the beginning of 2010, there were about 400 billionaires who were citizens of the United States. Four of those billionaires have died this year. One of them, Dan Duncan, had a net worth of $9.8 billion. The tax on his estate last year would have been $4.4 billion, leaving his heirs the healthy sum of $5.4 billion to share. Since Duncan died this year, however, they will share the entire $9.8 billion. Of course, as oilman Bunker Hunt famously said following his and his brother’s failed attempt to corner the silver market in the early 1980’s, “a billion dollars isn’t what it used to be.” (Bunker Hunt would have known all about the evils of estate taxes, since he inherited his wealth from his father, H.L. Hunt, and he still came out a billionaire.)
Due to the elimination of the estate tax on billionaires this year, the national treasury has received about $6,133,000,000 less from just four estates than it would have received last year. Add to this amount the value of estate taxes on the nation’s millionaires who have passed away this year, and the total would come to between $25,000,000,000 and $30,000,000,000.
This is about 30 times the total 2010 budget for the Small Business Administration. Think about that when you try to get a loan for your next entrepreneurial venture.
It is more than twice the total 2010 budget for the Department of the Interior. Think about that when you see the sad state of repair and lack of ranger services in some of our national parks, forests, and sea shores…
As you know if you read this site, I am very much in favor not just of reinstating the estate tax – the temporary repeal of which Bush and the Republicans sold to the American people by calling it a “death tax” and alluding to non-existent family farms that were being lost – but raising the rate significantly. Not only would doing so help us to balance the federal budget, and provide much needed services to the American people, but, more importantly, it would set up a significant barrier to the creation of an American aristocracy.