Estate Tax: Justice or Theft?

The estate tax debate from a Christian perspective.

Nov. 16, 2010— -- While Congress decides whether to repeal the return of the federal estate tax, leaving much needed income to close the growing budget deficit hanging in the balance, some Christian taxpayers are using ethical and theological arguments on opposite sides of the debate.

Gary Dawson, a coal miner in Gilette, Wyo., said the Bible clearly mandates people to help the poor, but paying additional taxes to the government is detrimental to such a call.

"I just think people need to understand that our creator blessed us in different ways," Dawson said. "I think the government as the great equalizer is equivalent to theft."

If the estate tax returns as scheduled Jan. 1, 2011, after a one-year hiatus, the estates of the richest Americans will be taxed at 55 percent, with an exemption of $1 million for individuals. The bill that the House passed in 2009, but which the Senate stalled, called for a maximum tax rate of 45 percent on an estate and a $3.5 million exemption.

Congress reconvened Monday for the first time since the Nov. 2 election, and it is unclear what changes will be made before the estate tax repeal expires.

There are "ongoing conversations taking place," said a representative for Rep. Sander Levin, D-Mich., the chairman of the House Ways and Means committee, which has jurisdiction over tax issues.

The American Family Business Institute, a secular trade association of family business owners working to repeal the estate tax completely, estimated that 245 members of the House and 49 members of the Senate will likely vote for a repeal of the estate tax.

Adam Nicholson, a spokesman for the institute, said these numbers create a majority in the House and near-majority in the Senate. "Those are the base, minimum numbers we have," Nicholson said of the lame-duck Congress.

President Obama has invited leaders to a bipartisan meeting Thursday, when he hopes to discuss, among other topics, the tax cuts passed in 2001 and 2003. Although the estate tax mostly affects the richest Americans, changes in other taxes, such as those on dividends, capital gains and the Alternative Minimum Tax, may affect a broader base of taxpayers.

A Bad Experience With Estate Tax

Coal miner Dawson, 44, said he is not a member of the highest tax bracket but is still passionate about the estate tax issue from a Biblical perspective.

"I want to use my wealth for God's glory, not to build a swimming pool in my backyard and buy a new pickup," Dawson said.

Coal miners in his region, he said, have an average annual salary of $70,000 to $80,000. "Once I get the needs of my family taken care of, I take care of extended family, neighbors and friends," he said.

He said excessive estate tax laws contributed to his family's financial problems. His parents ran into financial troubles when he was in high school and taxes on his deceased grandfather's estate contributed to his family's bankruptcy.

Dawson said he does not wish similar circumstances on his children and hopes to teach them financial discipline, including instilling the value of financial generosity.

"Yes, we're concerned about the poor, but we want to do it," he said. "When the government forcibly takes your things, then that's compulsory and no longer charity. It's not something I'm doing because I love my neighbor and I love God. It's because the government will throw me in jail if I don't comply."

Jim Wallis, founder and editor of the progressive evangelical magazine Sojourners, is against a complete repeal of the estate tax. He said reinstating the estate tax is a matter of justice.

"Inequality is a fundamental biblical concern. We have been increasing the gap between rich and poor for a long time," Wallis said. "The only people affected by the estate tax are the super rich, and the super rich can afford to pay it. They owe it back to society and they should pay it."

In his book, "Rediscovering Values: On Wall Street, Main Street and Your Street," Wallis pointed to the growing disparity in U.S. income levels and, conversely, the shrinking "prosperity sharing" sentiment across the country.

Although he said the Bible is not specific about tax rates and exemption values, Wallis is in favor of a "vigorous" estate tax.

Enough Is Enough

"With the war going on, everyone has a responsibility to pitch in," Wallis said. "This is a way for people to contribute; to overcome tough issues in our society."

Eugene Sukup, 81, advocated for a middle-ground on the estate tax issue as a Christian. He and his wife built Sukup Manufacturing Co. 47 years ago in Sheffield, Iowa, and he is intentional about giving away at least 10 percent of his income, as the Bible indicates.

Sukup said the company, which makes grain handling, drying and storage equipment, only recently reached its success in the past 10 years through the management of his sons. He said he believes it would be an injustice for his two sons or six grandchildren to have to pay excessive taxes when he dies, on top of the corporate and income taxes he pays annually.

"I'm not saying we shouldn't pay taxes. We all have a debt," said Sukup, who hopes Congress passes an estate tax of 25 to 35 percent.

"Don't you think that's enough? I paid taxes on the business all these years. I think they should be reasonable about this."