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Saturday, October 22, 2016

Few things sell ideas in American politics like a good farm story.

Just ask Representative Dave Reichert. He held a hearing recently on the impact of the estate tax on farms and small businesses.

An outspoken critic of the tax, Reichert was inspired by a recent story featuring the McBrides — an old farming family from the town of Issaquah in his suburban Seattle district.

The McBrides first got noticed over the summer, when The Seattle Times reported that they had sold the last farm in Issaquah, a sign of the changing economy and demographics of the community.

The McBride family had farmed the land for over a hundred years and over the course of six generations. The 12.5-acre lot sold for $4.5 million to a developer planning to build a luxury housing development called Avery Pointe, where houses start in “the low 700s.”

Jim McBride — son of the 97-year-old patriarch, Ralph McBride — claimed they’d sold the land because of the estate tax. “All my parents’ wealth was in that land,” he insisted, “and we couldn’t afford to pay the taxes that come with inheriting it at the current property value.”

Five days later, the paper cited the Issaquah farm in an editorial decrying the estate tax as an attack on family farms and calling for its immediate repeal.

Frank Blethen, the publisher of the paper, is an outspoken critic of the estate tax and a longtime funder of efforts to repeal it. So his embrace of the McBrides’ account is unsurprising.

There’s just one thing: The story is completely false. There’s no way the McBride family sold their farm because of the estate tax.

At the federal level, estates worth less than $5.4 million for individuals and $10.8 million for married couples are exempt. So if all or even most of the McBride family’s wealth was in the land that sold for $4.5 million, they’d still have fallen below the exemption and would have paid no federal estate tax.

And in Washington state, farms are 100 percent exempted from the estate tax. If the family had kept the farm and the kids had inherited it, they wouldn’t have paid a dime on the bequest.

In fact, critics of the estate tax have tried and failed to find a farm lost as a result of the estate tax for the past 15 years.

David Cay Johnston took on the task in 2001, when the estate tax was much more robust than it is today, and couldn’t find a single one. That reporting for The New York Times won him a Pulitzer.

There are 2.2 million farms and 28.2 million small businesses in the United States, according to official data. In 2013, only 120 farms and small businesses owed any federal estate tax at all, and their average value topped $50 million — more than 10 times the worth of the McBride estate.

Which brings me back to Reichert. Perhaps he’s just deeply concerned about this tiny fraction of very wealthy estates. Perhaps he was misled by the intentionally misleading editorial in The Seattle Times.

Or perhaps he’s doing what estate tax opponents have been doing for decades: not letting facts get in the way of a good story.

OtherWords columnist Josh Hoxie is the director of the Project on Opportunity and Taxation at the Institute for Policy Studies.

Originally posted at OtherWords.

Photo: khawkins04 via Flickr

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  • Daniel Jones

    Clearly this man is learning all the wrong lessons from listening to the music of Henry Rollins.

  • LotusJoan

    He did what the right always does, make up or distort facts to fit the narrative they prefer; remember the thousands of jobs Keystone was going to provide? Real count, 35 total. The left does it too, just not so much or egregiously.

    • bernieo

      When this was a big topic a few years back the mainstream “liberal” media was all over this – that is, they played along with the death tax lie. I remember one heartwrenching story on the evening news (NBC I think) about a family that lost its farm to the estate tax. But it was clear that the parents had not had a will which would have helped avoid the taxes and and that some of the kids did not want the farm kept so forced the sale and had to pay some taxes. Had they decided to keep the farm they would not have had a problem. When David Cay Johnson’s article came out it did. It get the same kind of attention as the sob stories did so once again most people were misled.

    • Joe Richardson

      Remembering republican lies is getting harder, I cant keep up due to the volume. We wont forget this one for generations, many many generations, “Gotta invade Iraq because they have WMD”!!.

  • Jonathan Kendrick

    In a related article, a little more context on the emergence and background of ISIS:

  • DAK27

    OR perhaps he lied. On purpose. Why? Because he cannot help himself or perhaps he is just too stupid not to lie… or perhaps because he is a Republican and it is in their DNA. Who knows and frankly, who cares. He is an elected leader and he lies on a regular basis… it is what politicians do.

  • Billie

    12.5 acres and they got 4.5 million. WOW!