Despite the barriers of identity politics and Democrats’ insistence that the Republican Party offers nothing to African-Americans, it’s actually quite easy for minorities and the GOP to find common ground — especially among entrepreneurs.
Take the estate tax, for example.
If President Barack Obama’s recent budget proposal takes effect, the United States will have a higher death tax (as it’s also known) than any other country in the world. Not only will this hurt America’s ability to compete on a global scale, but it will also disproportionately affect minority-owned businesses across the country.
Harry Alford of the National Black Chamber of Commerce and Robert Johnson, founder of Black Entertainment Television, are among those who are speaking out about the issue. They argue — as do we — that the tax should be repealed, as it is especially damaging to minority business owners, many of whom only became successful in the past few decades.
“Full repeal of the estate tax would allow African-Americans to pass the full fruits of their business success to the next generation … thereby laying the foundation for a permanent minority ownership class that can contribute to the economic growth and development of the United States economy,” Mr. Johnson wrote in a letter to the House Ways and Means Committee last week.
In an op-ed for The Hill, Mr. Alford cited a study by two Boston College professors that showed the death tax will cut African-American wealth by 10 percent to 13 percent by 2055. Alford says minority business owners are far more wary of the tax than entrepreneurs in general, and he makes the case that it pressures minority-owned companies to sell at a discount price. He calls the tax a “legacy killer.”
“Many minority-owned family businesses are first-generation businesses, where children work alongside their parents,” Mr. Alford wrote. “These business owners do not want to sell out at fire-sale prices to pay the estate tax and eliminate the livelihoods for the next generation, in addition to the jobs for those whom they employ.”
Mr. Alford, who also cited a study showing that 90 percent of black business owners believe that the death tax hindered their prospects for long-term growth, says “it makes no sense” to use the tax code to create even more hurdles for minority-owned businesses. And the GOP agrees.
Last week, after a heated debate spurred in part by the comments of Mr. Alford and Mr. Johnson, the Ways and Means committee passed a measure to fully and permanently repeal the estate tax on a party-line vote. That vote isn’t likely to amount to much, unfortunately, as the president and most Democrats in Congress are (not surprisingly) looking to expand the revenue collected via the current estate tax, as there is significant support among minority policy-makers to do so.
For the reasons outlined by Mr. Alford and Mr. Johnson — as well as other reasons, most notably common sense and the economic future of our nation — it’s time to repeal the estate tax. Sadly, it looks like we will have to wait until at least 2017.