The latest Fortune tries to whip up the class envy in its discussion of the future of the federal estate tax. Writer Michael V. Copeland examines the cases of five billionaires who died this year:
Take Dan Duncan, the Houston oil and natural-gas tycoon who co-founded Enterprise Products Partners. When the 77-year-old died of a brain hemorrhage in March, his fortune was an estimated $10 billion, according to the research firm Wealth-X. Were that subject to the 2009 top estate tax rate of 45%, the federal government would be looking at a tidy $4.5 billion. (Duncan?s spokesman says much of his estate was already transferred to his children or will be given to charity.) Either way, the feds get zero from his estate.
Tally up the lost estate taxes from the other superwealthy who passed this year ? including John Kluge, founder of Metromedia ($7.5 billion fortune); Mary Janet Cargill, heir to Cargill, the agricultural giant ($2.5 billion); real estate investor Walter Shorenstein ($1 billion); and New York Yankees owner George Steinbrenner ($1 billion) ? and the cash-strapped federal government missed out on another potential $5.4 billion in taxes, for a total for all five billionaires of about $9.9 billion. And that?s just the billionaires. Overall, Uncle Sam collected $21.6 billion in estate taxes for 2009. This year: $0.
Note Copeland?s implication that this is money that rightfully belongs to the government, not money that the government is stripping from its owner(s) just because government officials have decided arbitrarily that some people have accumulated too many resources.
Of course, the estate tax does more than force the wealthiest of the wealthy to skip buying another villa, as the John Locke Foundation has discussed and as Adam Nicholson of the American Family Business Institute describes below.
