 |
| Candy mogul Forrest E. Mars, pictured with his wife Deborah, could have left $1.6 billion of his fortune to the state under the old estate tax.
(The Washignton Post) |
By Christina Nuckols
The Virginian-Pilot
RICHMOND
Under Virginia's estate tax law, candy moguls Forrest and John Mars could have left the state as much as $1.6 billion each when the Northern Virginia brothers go to that big chocolate factory in the sky.
But as of today, the so-called death tax is gone. The Mars brothers' personal wealth - accumulated from the sale of M&Ms, Milky Ways, Starburst and other popular food products - and the fortunes of many other well-off Virginians will not be shared with the state.
The General Assembly and Gov. Timothy M. Kaine had concluded the tax is bad for business, not to mention sort of creepy. Still, they acknowledge, it wasn't easy to lose the revenue.
While not every death is as bountiful for the state as the passing of a billionaire, Virginia's estate taxes have generated between $120 million and $160 million annually for the past decade.
The end of the tax comes at a time when Virginia faces a budget shortfall this summer between $200 million and $300 million.
Weak tax collections are expected to continue over the next year, putting a pinch on Kaine's plans to expand pre-kindergarten education and land conservation programs.
"I think we'll be all right," said Del. Robert Tata, R-Virginia Beach, who championed the abolition of the tax. "We'll make up the money in other ways. The people who want to expand and grow their business can do that now without the government reaching into the grave after them."
However, Virginia's death tax may not stay dead. Congress is gradually phasing out the federal estate tax, but it will return full-force in 2011 unless Congress votes to extend the cut. The federal and state taxes are coupled. If the federal tax is revived in four years, the Virginia tax also could be resurrected.
There is strong pressure on national and state officials to make sure that doesn't happen.
The Policy and Taxation Group, a California organization with ties to the Mars family, spent $180,500 over the past four years lobbying the Virginia General Assembly to end its estate tax, according to reports filed with the Secretary of the Commonwealth.
Mars Inc., the world's largest confectioner, has devoted far more lobbying resources on Capitol Hill.
The company has spent nearly $12.6 million lobbying Congress since 1998. The money also was used to lobby on agricultural and trade laws.
Congress began weaning itself off the federal estate tax in 2001.
The following year, Tata introduced a bill to repeal the state version after he received a letter from a constituent requesting the change.
Tata said recently that Virginia Beach resident William Simmons, who wrote to Tata in July 2001, had not been contact with him since then. Simmons could not be reached for comment.
Tata nearly succeeded in 2003 but his bill was vetoed by then-Gov. Mark Warner, who argued that the state couldn't afford to cut taxes in the aftermath of $6 billion in state budget cuts.
In 2005, all three gubernatorial candidates told a gathering of farmers that they favored ending estate taxes. The following year, the legislation abolishing the tax was approved.
The measure was supported by the Virginia Farm Bureau Federation and the National Federation of Independent Business-Virginia.
However, much of the financial muscle for the repeal effort came from the Policy and Taxation Group, based in Orange County, Calif. At various times between 2003 and 2006, the organization employed four to nine Richmond lobbyists, including former officials from the administrations of Govs. George Allen and Jim Gilmore.
Patricia Soldano, a financial planner who runs the advocacy group, said she does not usually lobby outside of Congress, but she made an exception in the case of Virginia.
"It was an issue of proximity if nothing else," she said.
Soldano, who does not identify her clients, said she represents wealthy families in 25 states. In lobbying reports filed with Congress, she has listed Mars Inc. and Gallo Winery among her contributors.
Forrest and John Mars, both in their 70s, live in McLean and Arlington respectively. Forbes magazine has estimated their net worth at $10.5 billion apiece.
The reclusive brothers did not respond to telephone calls and e-mails to company offices in Virginia, New Jersey and Illinois. Other billionaires, however, have made personal appeals to politicians and the public in an effort to end the tax.
Robert Johnson, the founder of Black Entertainment Television and the first black billionaire, wrote a letter to Virginia legislators in 2003 asking for a repeal of the tax.
"African-Americans have not accumulated wealth in past generations and were denied the opportunity to do so because of slavery, Jim Crow laws and other government institutions," Johnson, of Washington, said in a telephone interview. "They've made it, they worked hard and they feel, and I feel, we should be able to keep it."
State tax analysts said super wealthy individuals like the Mars brothers or Johnson rarely pay their full taxes. They set up tax shelters and make charitable contributions to reduce the estate bill that will fall to their heirs.
Farmers and small-business owners jump through similar financial and legal hoops to protect their assets.
Southampton County farmer Jamie Lee and his father have spent years setting up trusts and insurance policies. But, Lee said, they could still face financial problems if they are forced to pay estate taxes.
"My sister and I could have to come up with a lot of money because it only covers part of it," said Lee, 37, who grows corn, wheat and soybeans on 1,400 acres. "This is not just a tax on the rich. Farmers might have a nice net worth because of their land, but they don't have a lot of money in the bank."
Bob Hedrick, chairman and CEO of Sprinkle Masonry in Chesapeake, said protecting a personal fortune that is tied up in his business has been expensive.
"I've spent tens of thousands of dollars on attorneys and consultants and accountants," said the 66-year-old executive, whose son Robert is a partner in the firm. "It infuriates me. How can you say to people, 'When your daddy dies we're going to tax your butt off'? It doesn't make sense."
Lots of states agree. Virginia is one of 33 states that have eliminated their estate taxes in response to the congressional action, according the National Conference of State Legislatures.
But because many states could re impose their state taxes if Congress revives the federal estate tax, businessmen like Hedrick won't celebrate too hard when the Virginia tax expires today.
"In 2011 on Jan. 2, we could be right back in the toilet," he said.
Christina Nuckols, (804) 697-1562, christina.nuckols@pilotonline.com
Delicious
Digg
Reddit
Facebook
Google
Yahoo
Upload Your Video
iTunes Podcast
Video Feeds
Watch The Dot
We are not looking to punish the rich for being rich
and God knows I don't believe in the state stealing from its citizens, however, the estate tax is not the only way they do this, and we all know that Virginia will find a way to make up for it. Do I think they spend our money responsibly? No! Do I think they have a right to take it? No! The fact of the matter is Virginia will do something to take from the rest of us whatever they were getting from estate taxes. Like it or not, a billionaire can afford a million dollars much more easily than I can afford $50.00!
I wonder about folks who worry about being able to pass
on their considerable wealth to their children. Aren't they teaching their children to earn their own money? I think Warren Buffett has the right idea. Enjoy making your fortune and practice extreme philanthropy!
Notice how often the left calls taxes 'sharing with the state'
Sharing sounds so much nicer than taken by threat of force,which is the real meaning of taxation.If you don't think it's true,you haven't been reading this bird-cage liner of a paper lately.The point is,once income has been taxed as someone does something the left doesn't understand,earn it,it shouldn't be subject to confiscation just because the earner isn't around to fight back.Notice how many poster children of the left wonder how the state will 'afford' to 'lose' this money.No one asks if we can afford a tax increase.The state can do as we do and live with it.Notice too how often the posters call anyone who disagrees with asset confiscation after death trailer trash or something else not applicable to people who work for their assets.
One Blue Collar USMC Idiot I Guess
Who happens to have an estate (gross) in exess of 2 mil. And from the tax code:**The amount was $1,500,000 in 2004 and 2005. For 2006 through 2008, the amount is raised to $2,000,000.** that's in Gross Estate Value. If you're lucky you get to deduct from this and pray that you're total estate value is less then the amount that they will tax you at. And no, it is not because my head is hung low to the priveldge few, it is because my father was a union coal miner until he died when I was seven. But he taught me that I should work my butt off for everything that I have. I do not see why my heirs should give up anything in my estate when I pass. But my boys know the same lesson and for that I'm proud. ooh-rah... dad
spend responsibly
When the Commonwealth suffers from budget shortfalls, it ought to, like the rest of us, learn to spend responsibly. At a state level that means cutting programs that aren't necessary -- even after the Pilot predictably publishes heart-wrenching stories about the poor, protected classes of minority citizens who will lose jobs and health care and food to eat. Because you know the Pilot and other agenda-driven media organizations will do this. Balancing our budget will be difficult, of course... this is called responsibility. Live by it, as your constituents must.
Its a matter of principle
Estate tax is wrong because it taxes money that has already been taxed at least once. The state (nor the feds) are not "entitled" to the estate of anyone whether they have a little or a lot. Just because someone has acquired a large estate (even after paying taxes on the money) does not mean that it needs to be redistributed by taxing it again. That is the heart of socialism. The replies that whine about the rich not paying their fair share are socialists whether they realize it or not.
Taxes -
Lets see, Pay taxes on money you earn, pay taxes on interest on your savings/checking, pay taxes on your property, for the pleasure of buying or owning, taxes on the utilities, taxes for stormwater runoff, I am sure somewhere, there is a tax on the tax. When someone dies, no matter who it is, or how much they own, none of it should to to the state. All of it should go to the heirs. I don't care how much it is!, and BTW, I will probably have $10.00 going to my heirs, cause I have no wealth, so dont exclaim I am only saying this to get out of paying extra taxes.
The politics of the rich
What amazes me the most is how blue collar conservatives in the south have adopted the politics and philosophies of the privileged class. They will actually defend their betters, with hat in hand and head bowed, presumably because they believe they are just one lottery ticket away from joining those exaulted ranks. Any day now, their ship will come in and they will be sipping mint julips on the plantation steps, defending their hard earned wealth against socialists and communists. Whites with a slave mentality. Go figure.
Death Tax immoral
Here we have the great society. The state is going to care for all of you who are too lazy to get out and succeed in life. Not only do they tax everyone to death so a few can sit on a front porch and collect welfare; they also want to reach into your casket and take the gold out of your teeth. For those who whine sock it to the rich.... If you win the lottery you'll be rich, right? Do you want the govt to take your money to waste or give to your children? Think about it. Opps. Sorry. If it's not American Idol, or Survivor you have a hard time connecting the dots. Guess thats socialism for you.
This is the politicians way of saying
It's about like the "car tax". It was supposed to have been phased out by now. Yet we see it increasing and the politicians are hiding behind the "no control to stop it" clause. This "death tax" will see light of day again as soon as the politicians find a way to make it look like they can't stop it. About like "Light Rail" and "Tolls", the people have voted no, so the politicians create an additional layer of government that has tax and fee authority that we don't vote for. Mean time the legislators are spending money on pet projects to pad their own pockets and that of their relatives and partners. It's time to invoke term limits to stop the corruption and compacency we see today. It's time to vote out Chris Jones and his more tax club.
Tax laws are outdated for todays world
Read the Fair Tax Book and check out the website fairtax.org. Last get educated on the laws in the state of the communist wealth of VA and don't be afraid to vote out the political clowns you hold so dear in the state and federal seats that won't change the tax laws.
I work hard and earned my money. I am tired of being taxed to the hilt to pay for the poor.
Amazing,
It is amazing how we fear the communists taking over our society. Reading most of the responses here, most want the state to take from the rich through a third or forth hand (rather steal) and give to the poor. Stop your whining. Regardless how rich, the state does not warrant any of the deceased's money - no way no how. If they can do that, they will start other taxes and get everyone sooner or later.
Here's why, why, why
Former jarheads that make it all the way to project manager at a major firm do not pay estate taxes. In 2006, estate taxes were paid only by the wealthiest Americans - those richer than more than 99 percent of their fellow citizens. As inspiring as your rags to riches story is, I doubt your daddy ever got close to worrying about this tax. 80 percent of all estate taxes in 2006 were paid by Americans with estates that were $5 million or higher. This tax cut isn't designed to protect dimwitted blue collar conservatives who are worried about who will get the trailer and the dog. It's designed to make sure that the Hiltons can pass their wealth along to Paris. God, you rednecks are gullible tools.
Isn't it ironic....
I can't exactly argue with the elimination of any tax in Virginia, considering the current situation. However, with the influx of heavy taxes and fees being dumped on average citizens recently, I find it less than appealing to see that a tax that generally only has an impact on the wealthy has been eliminated. The rest of us work for our money too, and it's been taxed beyond what's rational and we're about to be hit with a lot more taxes and fees thanks to the unconstitutional HRTA. I guess now some other taxing authority will have to be created to suck out of the rest of us whatever the state will not be getting from estate taxes anymore... Give the general public a break for once!
"Could have left"
The way the story was written, you would think that people have a choice in how much the government helps themselves to when you die.
What the story didn't point out was, Mr. Mars company just donated over 40,000 pounds of pet food to Hampton Roads Animal Shelters-liberals usually ignore the good that the rich do for the community unless the money is taken by the government-then it's called "fairness"
Why why why....
Please tell me why, without the rhetoric of "the little guy will have to make up the shortfall" should anyone who works their life to earn their money, why should they have to give up even a small percentage to the state at death? They already paid taxes. Why should their heirs have to pay a cent? My father worked his life from a PFC to CWO-4 in the USMC and now a Project Manager for a major company. He worked his butt off and paid his taxes. He has a small estate compaired to Mars however; why should he have to redistribute a damn thing when he dies? I've worked my butt off so I can leave something to my daughter when I'm dead. Why, after I've paid taxes on the things I have, should I have to redistribute my estate to the state????
Why give money to someone who wastes it on
stupid programs - like trying to stop illegitimate births (has it helped?) Good grief -- it's like people see being wealthy as a bad thing. You evil rich person!
The income has been taxed, the house has been taxed, the vehicles have been taxed -- why double tax it? Non-wealthy people -- wake up! The rich are the ones who primarily fund the socialist programs. And, no -- I'm not referring to roads and police. I'm referring to all of the programs that are supposed to make everything better. You know -- the ones that aren't working. Medicaid patients have better health insurance than that which our family has to pay for!
Stop Taxing The Dead
Why tax the dead on money they have already paid taxes on? I feel some have envy for the rich and somehow feel entitled to a rich dead person's estate via the tax system. For those who wonder where the government will find the "lost" revenue by not stealing money from a dead person, I suggest they voluntarily give more than their required minimum state taxes to the government to ease the government's financial burden. We all know how efficiently the government spends our money.
Let them eat cake
People who've worked hard, developed the right connections & hired the right people should be allowed to pay whatever they want to to support their country/government. To the rest I say..."let them east cake!"
Disgusted!
Today, while shopping for the week, i forgot it was the first of the month and it was time for welfare recipients to shop too with my tax dollars. What I kept seeing is truly disturbing. These people collecting my hard earned money eat better than I do! Go figure. I saw many with thick steaks, crablegs, jumbo shrimp and so many other items I would purchase on special occasions a few times a year, but yet, here it is, my tax dollars feeding many, things I feel are a specialty for me ! Why are we feeding so many such luxury items with my tax dollars when I can't afford them for myself? Is there a guideline to just who receives these benefits? Maybe if we start monitoring the recipients we might just save a few million bucks right here!
death tax
how about all you politcians just take a BIG pay cut......oops i forgot you make the rules. Give me the pay of all the state employees and ill show you how to make up most of the millions the state looks to lose. It can be done I showed it on paper for the city of Charlotte n.c. alone but never put it in the paer for all to see
Irresponsible journalism
nothing like using an extreme example to get people all in a dither because a newspaper doesn't like what's going on. There are always extreme examples that do little to educate or illustrate a point. If the state can take Mr. Mars' money, they can take your as well.
Watch out!
Watch how this will fly into the face of Virginia!
Carpetbaggers will move into Virginia like crazy or at least claiming it as a residency and not give a nickle back. Oh and by the way, look at how the rightwinger's that post here,whine about a tax during a time of war. Forget the needed body armor. Want to stop the war in Iraq? Just open your mouth about tax and watch how these "Bumper Sticker Supporters" will run like cockroaches when the lights come on.
Where will it end?
The $3.2 billion the Mars brothers' estates won't have to cough up will still be needed to quench the state's thirst for more and more tax money. I didn't see the State drop their expense requirements in line with the money lost to the elimination of the inheritance tax. Instead of the Mars brothers, and thousands of other multi-millionaires, it will simply come out of the pockets of those among us making "normal" wages. There is no free lunch when it comes to government. The continuing drop from 91% to 38% in personal tax rates, plus liberal capital gains and inheritance tax laws, combined to shift more and more of the tax burden from the rich....to the "not-so-rich". Where will it end?
Save the rich!
I have no problem with getting rid of the estate tax as long as the Joe Dirt republicans who think such taxes are the tools of socialists and communists are willing to make up the $1.6 billion in tax revenue lost by giving the poor, beleaguered Mars family tax relief. Or maybe we could just declare Virginia a tax-free "Redneck Utopia". No doubt the money for roads, schools, public safety, sewer & water, etc. would just start growing on the region's famous Gum Drop Trees.
About time
The very idea of confiscating even one cent of a person's money, simply because they die... is no less than pure 100% Marxist-Lenninist Communism. Likewise with any and all property taxes. Politicians who support such taxes and the beurocrats who do the collecting are all guilty of theft, not to mention illegal search and seizure.
Framing at work
This is a good example of how "framing" works--get people thinking of estate taxes as the "death tax" and you see over 80% of people opposing its reinstatement according to the poll on this story. There was a move to reframe it as the Paris Hilton tax...wonder whatever happened to that...
Great
No estate taxes, but the common man in VA gets penalized with excessive fees for driving infractions. Got to love the priorities in VA...
The tax on the income that made the estate has already been pa
Why should the estate be taxed? The state has already taxed the income that built the estate. I'm tired of being taxed on top of tax. It's time for the state legislators to learn how to operate the state within the people means. Their recent increases in our taxes and fees have pushed our households closer to poverty while they continue to spend on un-needed and silly projects. We have one car that is over thirty years old, it's not in the best of shape but it runs. The city wants to tax us as though it is a show car. We've had to fight with the city twice to have the assessment reduced to a daily driver with lots of ware on it. When is enough enough with the tax machine? It's time to vote them all out.
Estate taxes are socialist
It's easy for some to eye those with assets and say "lets grab a big portion for the good of the state".
The estate tax is gone unless the socialists among us get enough power to bring it back.