WEEKEND EDITION: June 16, 2002
Benjamin Grove covers Washington, D.C., for the Sun. He can be reached at [email protected] or (202) 628-3100, Ext. 269.
SENATE DEMOCRATS last week shot down an effort in Congress to permanently repeal the estate tax, often called the death tax. It was a painful disappointment for small business owners, Paul De Patta said.
De Patta and his wife Kathy started At Your Service Catering in 1988 as a part-time venture on weekends, hauling food to small parties in their 1976 Volkswagen van. The operation soon grew into one of the largest catering services in Las Vegas, now serving 650 events a year. De Patta employs seven full-time workers and up to 70 people part-time.
De Patta's children, Dominic, 21, Joe, 19, and Rose, 16, have grown up with the business, invested their own sweat in it, and show an interest in taking over someday.
"Since they were old enough to carry a tray, they have been here," De Patta said.
But De Patta frets that his children won't be able to afford the federal estate tax on the business when he dies, forcing them to liquidate or sell the business.
"It's really unfortunate," De Patta said. "My children are entitled to every bit of it."
Debate in Congress was heated. As it stands now, estates worth $1 million or more are subject to the estate tax.
Congress, as part of President Bush's sweeping tax cut plan, had already voted to phase out the estate tax over the next decade. But the tax would reappear in full again in 2011.
The House earlier this month vote to scrap the whole tax forever. But the legislation fell short in the Senate. Republicans had argued that the government was taxing ranches, small farms and businesses twice -- once over the life of the venture, and then again when its owner died.
"We don't think death ought to be a taxable offense," Sen. Phil Gramm, R-Texas, said.
But Democrats won the day, arguing that only the richest 2 percent of Americans pay the estate tax, and that America needs the money. Their statistics said the estate tax would net $740 billion in the decade beginning in 2011.
"We are bleeding red ink," Sen. Hillary Clinton, D-N.Y., said. "We can't afford (a repeal)."
De Patta understands that, but still wonders how his relatively small Las Vegas operation could wind up being taxed alongside the nation's billionaires.
"I understand it takes money to keep the wheels of government turning," he said. "I pay my taxes. But at the same time, where does it all stop? Where do we draw the line on taxes?"
Reports last week that "dirty bomb" suspect Jose Padilla's target was Washington gave people here something else to be a little more nervous about. But it sparked no hysteria.
Workers were on the job the next day; they took public transportation. Out-of-shape tourists with their fanny packs and FBI T-shirts tromped around the city, visiting the monuments and museums.
After all, the nation's capital is not an original target of choice. Folks here are surprised when terrorist warnings do not include Washington.
Worrying doesn't help. About all we can do is remain vigilant -- whatever that means -- and plan ahead.
My fiancee and I are like many here who have mapped out two meeting places in case of emergency, one location inside the city, and one outside. Before I head for either, I may be making an important stop at a downtown pre-school to pick up a friend's 4-year-old.
A number of pre-schools in Washington require parents to do a lot of in-depth emergency planning. My friends, who work in the Virginia suburbs, have a son who attends pre-school in Washington, just a seven-minute run from my office. If some catastrophe befalls the nation's capital and his mom and dad can't get into the city, it would be my responsibility to get to the boy first.
These kinds of plans may seem like over-precautions, but people in this city have done a lot of planning -- in big and small ways -- since Sept. 11. Congress has spent millions to better prepare the nation's capital for the next attack, while city residents at kitchen tables have drafted their own plans of action.
In Washington, over-precaution helps us rest a little easier.
Sen. Harry Reid, D-Nev., has hatched a plan that could help ailing Nevada silver mines by providing them a new customer: the federal government.
Reid has introduced a bill that would allow the U.S. Mint to begin buying silver on the open market, specifically for minting American Eagle silver bullion coins. The bill has five co-sponsors, including Sen. John Ensign, R-Nev.
The government began minting the bullion coins in 1986, using a stockpile of Department of Defense silver that had been sitting around since World War II. The coins, also minted in gold and platinum, carry the market value of their weight, and are mostly purchased by investors who want precious metal holdings to round out their portfolios. But now the government is running out of the surplus silver. Congress would have to pass a law to allow the mint to begin buying new silver in order to keep the bullion coin alive. Enter Reid.
"If we let the mint buy silver, we can build on the coin's success, while also providing a great new market for our famous Nevada silver mines," Reid said.
The mint could buy up to 9 million ounces of silver a year for the coins if the bill is approved, Reid aides said. Nevada mines produced 17.5 million ounces of silver last year that made the state the nation's leading silver producer. Silver mines have struggled in the face of low prices. I pay my taxes. But at the same time, where does it all stop? Where do we draw the line on taxes?"
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