The Seattle Times ‘Death Tax’ Flap

Ever since the Seattle Times ran an editorial last Thursday (Aug. 14) asserting that “an Issaquah case ought to remind us that the estate tax imposes a burden on families and a subtle cost on societal stability,” journalist/blogger David Goldstein has relentlessly been taking it apart on his blog, calling it “quite possibly the most dishonest Seattle Times editorial ever.” Many Seattle Times readers chimed in, too, pointing out in the comment threads under the editorial that farms are exempt from estate taxes.

To summarize, the Seattle Times used the sale of what it called “the last working farm” in Issaquah on land — all 12 acres of it — “farmed by a single family since 1883” and now surrounded by $500,000 – $1,000,000 homes as a vehicle to reiterate its long-standing opposition to estate taxes.

As Goldstein (famously known as “Goldy” to his legions of fans and supporters), whose blog has national reach (he brought down George W. Bush’s incompetent FEMA director in the aftermath of the Katrina fiasco), has meticulously documented on his blog, the Seattle Times editorial is dishonest on many levels.

I don’t need to (and won’t) walk you through Goldy’s arguments. You can read them for yourself:,, and

To summarize (again), 12 acres isn’t a farm, the land in question hasn’t been a “working farm” (beyond hobby farming) for decades, it was divided up among family members long ago, they’re selling it because of property taxes not estate taxes, and the family patriarch isn’t even dead (he’s 96 and lives in a nursing home). The Seattle Times tries to steer around this latter point by arguing that anticipation of estate taxes — what most people think of as “estate planning” — motivates people to make property dispositions in advance of death. Ergo, the land rush out of farms in the way of urban development.

(For what it’s worth, I’m not dead yet either, and I’ve already made many property dispositions — because I have an offspring who frequently needs money. Heck, that’s what parents are for and do if they can. I usually don’t think of it as “estate planning,” but I guess it is, because letting your kids spend you into the poorhouse before you’re dead undeniably is an effective way to avoid estate taxes. Then again, I could pay into a life insurance policy like those from Final Expense Direct as payouts are often protected from tax if they are under a certain threshold.

Though my method has the added benefit that it prevents money fights among heirs after you’re dead by ensuring there’s no money to fight over. In addition, it can qualify to have Medicaid pick up your nursing home bills.)

While the Seattle Times is focusing on what it calls “death taxes,” Goldy is focusing on newspapers. He quaintly believes newspapers should be objective and accurate, even on their editorial pages, even though yellow journalism has been around since long before any person now living was born and editorial pages have been used as personal soapboxes for the usually rightwing views of the papers’ usually rich white male Republican owners. I mean, there isn’t anything going on here that we’re not used to.

We’re especially used to the hysterical and highly exaggerated histrionics of the paid shills for the tiny handful of filthy-rich ultra-millionaires whose estates, after they’re dead, actually pay estate taxes. Keeping in mind that the dead don’t pay taxes, only executors and living heirs are inconvenienced by estate taxes, it’s a fact that hardly anyone is rich enough to qualify for paying estate taxes. Even garden-variety millionaires can’t get into that club. To owe Washington state estate taxes, the estate must be worth at least $2 million, and to owe federal estate taxes, it must be worth at least $5,340,000. That’s taxable estate, after deductions and credits. Some of those subtractions are big enough to drive an oil tanker through; for example, money left to a surviving spouse or charity is totally non-taxable, regardless of amount or type of property. Also, any state estate taxes paid are deductible from the federal taxable estate. If this sounds arcane, don’t worry about it, because you’ll likely never have to deal with it unless your name is Gates, Walton, Rockefeller, or your dad is CEO of a major corporation.

Which brings us back to Seattle Times’ “dishonest” editorial. Seizing on the “family farm” meme, they argued “the death tax isn’t really a whack on the wealthy.” Their reasoning goes that truly wealthy people get out of it because they can afford to hire Tax Lawyers and accountants, and the “death tax” only falls on families worth $4.5 million or so. You know, the small business owner of the topless barista stand around the corner, and the guy who fixes your cars at the neighborhood gas station, and your daughter’s orthodontist, and other tradespeople who get $15o an hour for their labor and write letters to the editor complaining about raising minimum wages to $15 an hour over 10 years.

I don’t know about you, but I consider $4.5 million rich, and I’d be happy to have it. So happy that even if the government (in this case, the state, as that’s under the federal exemption) took $500,000 of it,* leaving me only $4,000,000, I’d still be damned happy to get it, especially because I didn’t have to work for it or do anything to earn it except choose my parents wisely. (* $4.5MM – $2MM exemption = $2.5MM taxable estate X 20%.)

The debate surrounding estate taxes has always been dishonest, so the Seattle Times is merely perpetuating a long-established tradition. For example, in 1981 Initiative 402 sought to abolish state inheritance and gift taxes, and I remember seeing a billboard depicting a little old lady sitting out on the curb with her furniture and possession in front of a fetching little cottage with Victorian gables and a white picket fence that had a sign tacked on it, “Sold For Estate Taxes.” There’s nothing new about shameless liars trying to peddle the “estate tax is a middle class tax” lie. It’s standard practice and we’re used to it. This b.s. didn’t go over with voters in 1981, and it won’t go over in 2014, either. So Goldy is getting excited over something that probably isn’t going anywhere now, either. (After all, when did the Seattle Times ever sway an election outcome? For 100 years, people have been buying the Seattle Times to wrap fish and garbage in.)

(Which reminds me of a story I heard in journalism class. A venerable newspaper had an exceptionally high paper expense because its ancient press used a non-standard paper roll size — it was the only newspaper in the country that used it, so it had to be specially made. Well, as these things go, the old owner died and the newspaper was bought by a new owner. It somehow stayed in business despite the estate tax. The new owner had more of a head for business, or so he believed, and expeditiously ordered a new printing press using standard paper rolls that would save even more money through increased efficiency. Circulation immediately dropped to nothing. Mystified, the new publisher made inquiries, and soon learned all the homes in that county had kitchen cabinets sized to the newspaper pages, which were used as shelf liners, and the resized pages didn’t completely cover the shelves anymore. For a century, this newspaper had been selling cabinet shelf lining paper, and when it messed with its product its customer base disappeared. Kind of like Classic Coke. So, the new publisher retrieved the old printing press, sent the new press back to the manufacturer, and reordered supplies of the non-standard paper. In no time, subscription renewals rolled in. The lesson here is it’s essential for business owners to understand the business they’re in. The Seattle Times doesn’t compete with CNN, The Stranger, or HorsesAss; it competes with Glad. Nobody gives a damn what they write on their editorial page.)

Does anyone really give a damn about the estate tax, other than the .0001% of people who owe it? Well, Frank Blethen, publisher of the Seattle Times, clearly does because his newspaper rants against it on a regular basis. (He rants against unions, too, because he had a run-in with his own unions once upon a time.) From this you might infer he’s one of the .0001%. That might have been true when newspapers were still worth something (as Goldy pointed out, McClatchy Corp. has written down its 49.5% ownership stake in the Seattle Times to zero on its books, which implies the Seattle Times Company is worth nothing). But that doesn’t mean Frank’s a pauper. His Lake Washington waterfront home, alone, probably gets him awfully close to that $5,340,000 cutoff (and certainly over the $2,000,000 state threshold), if you believe Zillow valuations, unless he’s mortgaged it to pay for his kids’ cars and other expenses, like the rest of us do. So what this flap comes down to is a white male Republican multimillionaire at the age where people browse Purple Cross brochures exercising a vendetta against estate taxes from his privately owned bully pulpit because he’s still under the illusion his inherited family business is prosperous enough that his executor might have to pay it someday.

Meanwhile, for Goldy, this little scandal in a teapot is pure gold. It’s boosting his eyeballs like crazy. (I’m guessing the sturm und drang is helping the Seattle Times’ circulation, too, because nothing gets people’s attention like a pair of screeching cats on the backyard fence, and maybe that’s the Seattle Times’ real motivation behind painting such a fat target on its own back.)

This certainly looks like a win-win-win situation to me. Goldy wins. The Seattle Times wins. And Frank Blethen might get a personal win out of it, too. Oh, I don’t mean getting the federal or state estate taxes repealed. That’ll never happen (although Republicans came close in 2010, when they got the federal estate tax suspended for one year, and all their friends and supporters then rushed to die before the end of that year). What Frank will get out of it is friendly pats on the back at black-tie cocktail parties from all his rich white male Republican pals. And at his age, for a die-hard Republican multimillionaire, just knowing you still have some friends is plenty good enough.Roger Rabbit icon It takes your mind off your children circling around you like buzzards in a desert.

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