Taxation

Blacks Should Help In Doing Away with the
"DEATH TAX"
An editorial by Harry C. Alford, Jr. President & CEO, National Black Chamber of Commerce, Inc.

We, as a people, have been freed from physical slavery for over 134 years and we have yet to begin building wealth. We cannot begin utilizing all of the advantages of this free economy until we have gained enough wealth to actively participate. It's just not civil rights; civil rights can get you dignity and respect but we need more. It's just not political empowerment; look at Zimbabwe or South Africa where we now have enormous political empowerment but, yet, no power due to lack of Black wealth. Civil rights and political clout are nice but economic empowerment will get you freedom and authority. Freedom and authority are the keys to earthly happiness.

The total net worth of African Americans is only 1.2 percent of the total - versus 14 percent of the population. We have been stuck at that number since the end of the Civil War in 1865. Getting rid of the "death tax" will start to create a needed legacy and begin a cycle of wealth building for Blacks in this country. That would be a great start to breaking the economic chains that bind us.

What is the death tax? The "death tax" is levied against the government - assessed value of the deceased's estate. The rates can start at 37 percent and can climb to 55 percent. In essence, your last remaining parent dies and the estate they leave to you and your siblings will be reduced by the IRS by an amount equivalent to 37 - 55 percent of the total worth. Thus, the legacy left by your elders or left by you to your children can be significantly reduced or even wiped out.

An example: The Chicago Daily Defender - the oldest Black - owned daily newspaper in the United States - was forced into bankruptcy due to financial burdens imposed by the estate tax. We all remember what happened when the great Sammy Davis Jr. died - his wife was in bankruptcy within six months due to the vicious "death tax".

Store owner Leonard L. Harris, a first generation owner of Chatham Food Center on the South Side of Chicago, can envision all the work and value he has put into his business disappearing from his two sons. Says Mr. Harris; "My focus has been putting my earnings back in to grow the business. For this reason, cash resources to pay federal estate taxes, based on the way valuation is made, would force my family to sell the store in order to pay the IRS within 9 months of my death. Our yearly earnings would not cover the payment of such a high tax. I should know, I started my career as a CPA".

We cannot begin to build wealth until we start to recycle our precious dollars. We cannot recycle our precious dollars until we have businesses and ventures to invest in. The "death tax" is in our way!

Fortunately, we now have an opportunity to get the "legacy killer" out of our lives and future. There are two bills in the House and Senate as I write this editorial. HR 86 and S 56 will repeal the "death tax". HR 8 and S 38 will phase it out over a specified period of time. Please keep in mind that this estate tax only contributes about I percent of the total federal revenue, and of each dollar collected, 65 cents is spent on collecting the tax. The tax promotes virtually nothing but financial hardship and a serious insult to the hard work of our parents.

These bills are making progress on Capitol Hill. However, we need to provide a needed boost, especially to members of the Congressional Black Caucus who, many times, aren't where they should be on financial gain issues. Please call your applicable congressperson or senator and tell them you support these bills to end the "death tax". Tell them it is all right for Black folks to begin building wealth in this country. It is not against the law and it certainly is more enjoyable than poverty.

Building wealth will lead to better education, better health care, safer streets and sustainable communities. Poverty and the lack of economic empowerment will get you frustration and hopelessness. The only way to fight poverty is good government and laws that do not penalize hard work, success and savings. Let's put to death the "death tax"!