Opinion

<< Previous   of   Next >>   ADVERTISEMENT   HAVE YOUR SAY Feel strongly about something? Share it with the community by writing a letter to the editor. You’ll need to include your name, address and daytime phone number. (We’ll only publish your name and hometown.) We reserve the right to edit letters, but if you keep yours to 300 words or less, we won’t ask you to shorten it. If your letter is published, please wait 30 days before submitting another. Send it to: E-mail: letters@heraldnet.com Mail: Letters section The Herald P.O. Box 930 Everett, WA 98206 Fax: 425-339-3458 Have a question about letters? Contact Carol MacPherson (cmacpherson@heraldnet.com or 425-339-3472).   Published: Wednesday, June 28, 2006 Huge tax giveaways only worsen the flow of red ink John Burbank / Syndicated Columnist Two weeks ago I wrote about how the repeal of the state estate tax would defund public education. Now Congress has taken up the attempt to permanently kill the federal estate tax. At first, the Senate balked at a complete repeal. So the House put together a "compromise." This will deepen the hole our federal finances are already in, to the tune of $283 billion between 2007 and 2016, according to the Joint Committee on Taxation. That committee also estimates this "compromise" can drain as much as $820 billion out of our nation's finances between 2012 and 2021. The congressional leadership decided to couple this "compromise" giveaway to the adult children of the already wealthy with another giveaway to the timber companies. Their thinking was that this might persuade our two Washington senators, Patty Murray and Maria Cantwell, to vote for the repeal of the federal estate tax. So this was the bill that the House rushed through last week. The architects were Republicans, but the legislation had its Democratic supporters. In our state, Brian Baird, D-Vancouver, and Rick Larsen, D-Everett, both voted for this bill. In doing so, they are as much enablers of this tax giveaway as any of the Republicans. According to the tax watchdog group, Citizens for Tax Justice, the timber tax provision would give $940 million to timber companies over two years. Not only that, it opens up a tax loophole that President Reagan closed in the 1986 Tax Reform Act. Under this scheme, from 1981 to 1983, Weyerhaeuser reported $641 million in U.S. profits to its shareholders. But the company didn't pay any federal taxes. Instead, it received $139 million in tax rebates. What does Baird have to say about the current corporate giveaway? "The timber provision in today's bill will reduce the cost disadvantage of practicing sustainable forestry here in the U.S., keep our forest products industry competitive and protect local jobs." It all sounds good, but not if you pay attention to the facts. In mid-June, Weyerhaeuser announced a dividend of 60 cents a share, a 20 percent increase over their previous quarter. Weyerhaeuser CEO Steven Rogel said, "Due to the company's ability to generate strong free cash flow, Weyerhaeuser has the financial capability to increase its regular quarterly dividend, as well as repurchase shares ... " No mention of sustainable forestry there. Weyerhaeuser recently shut down two plants in Grays Harbor County, idling more than 340 workers. One plant was a large log mill, and the other was a specialty pulp mill. Look for more closures in the future, as Weyerhaeuser's CEO stated, "Independent of the dividend increase, we (are) actively evaluating alternatives to our fine paper business." No mention of local jobs there. Weyerhaeuser already made out well in the tax-avoidance business this year in Olympia. Timber lobbyists got the Legislature to pass a reduction in the corporate tax that creates a $25 million giveaway in the next two years. There are no strings attached to this tax exemption or the one approved by Baird and Larsen. The company doesn't have to show that this tax money is being spent for jobs. More than likely, it will end up in higher dividends and stock buybacks. How about the federal estate tax? Baird says, "Family businesses should not be lost to exorbitant taxes." They aren't. The Congressional Budget Office reports that across the entire nation, only 135 family-owned businesses would owe any estate taxes in any year. The American Farm Bureau Federation admitted it could not cite a single example of a farm having to be sold to pay estate taxes. It is easy to figure out why. The estate tax has special provisions already built into it for family farms and businesses. And it only applies to the value of an estate of more than $4 million for a couple. In our state in 2004 that was 897 estates, or one out of every 100. The votes of Baird and Larsen only turn up the heat on Murray and Cantwell to bow down to corporate lobbyists. Let's hope they won't. After all, Larsen claims that his top priorities include strengthening our national security and providing for our veterans. You can't do that long with an empty cupboard. John Burbank, executive director of the Economic Opportunity Institute (www.eoionline.org), writes every other Wednesday. Write to him in care of the institute at 1900 Northlake Way, Suite 237, Seattle, WA 98103. His e-mail address is john@eoionline.org.

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