The debate is over…God is a Yankee fan…or he really hates the death tax.
I spent three hours on the air on my new show that airs on WWBA 820 in the Tampa Bay market covering the death of “The Boss,” the principal owner of the New York Yankees, George Steinbrenner. Steinbrenner has been a favorite target of the media, and people in general throughout his tenure with the team. In my opinion he is one of the most misunderstood people in sports and I am a great admirer.
I will not make excuses for the dumb things that Steinbrenner did throughout his life. The Dave Winfield/Spira incident, illegal Nixon contributions, or how he handled some of his firings. Steinbrenner was human, and like the rest of us, will make regrettable errors in judgment. Steinbrenner used to be a football coach in his younger days and I think he carried that win them all attitude to baseball that has a 162 game season rather than 12.
Steinbrenner was a tremendous capitalist that first saved his father’s floundering ship building business and followed it up by turning around a weak franchise called the New York Yankees, changing the way players were paid and revenues were generated, and most importantly turning it into a winner. Like myself, Steinbrenner did not like to lose, which is something we can all admire and appreciate in a day and age where we teach kids not to keep score during youth sports games because we don’t want to hurt our kids precious self-esteem. In fact, Steinbrenner was so irate at our nation’s 1998 Olympic performance in Nagano, Japan with only 13 medals; he took it upon himself to improve the conditions and methods our athletes train under. The result: 37 medals at Vancouver in 2010.
Steinbrenner originally wanted to purchase the Cleveland Indians but was rejected. Instead he bought the Yankees from CBS for a net cost of $8.8 million. The rest is history. He turned the team into one of the most valuable sports franchises, and like all good capitalists made everyone around him wealthy. One of the other things that I really appreciated about Steinbrenner was his sense of humor. He knew who he was, made no excuses for who he was, and was able to make fun of himself. Who could forget the Miller Lite “less filling/tastes great” commercial with Billy Martin, his guest hosting Saturday Night Live, and of course his reoccurring roll on the Seinfeld show.
What most people outside of Tampa, FL and New York City do not know about “The Boss” was how generous and compassionate he was. His contributions to the community knew no bounds. Interestingly enough and uncommon by today’s standards most of his generosity was anonymous. I interviewed former Tampa Mayor Dick Greco and current Mayor Pam Iorio in regards to the day to day things that Steinbrenner did that nobody had any idea about. From funding people’s funerals who could not afford them, his contributions to schools, holiday concerts; the list according to Greco was endless. The difference between Steinbrenner and many others who I will leave nameless is that he never looked to capitalize on his charity. He never had a public relations firm alerting the press to his good deeds. He did them because he wanted to do them, and they were the right things to do, not because they would help to improve his image. Steinbrenner was right, charity should be private.
In the movie Bruce Almighty, Morgan Freeman plays the part of God, and in several scenes in the film, God is sporting a Yankee cap. I think taking Steinbrenner from this world in 2010…God is removing all doubt of his Yankee allegiance. Steinbrenner left an estate estimated to be worth $1.15 billion. Due to the fact that he died in 2010 rather than 2011 Uncle Sam will get nothing on this grave robbing attempt.
If he died in 2011 his family would have had to pony up 55%! I would assume that the Steinbrenner family would have planned for a significant confiscatory tax event, however if they didn’t, much to the happiness of the Red Sox Nation, the Yankees might have been broken up. This has happened before, Joe Robbie’s family lost the Miami Dolphins due to the estate tax.
In most cases, you have twelve months to pay the IRS which often results in asset fire sales. This is the real reason Warren Buffet loves the death tax. The famous value investor and his company, Berkshire Hathaway, loves to funeral crash and buy private companies on the cheap. As it turns out in this case, due to the one year break from the death tax, Steinbrenner went out of life in the same manner he conducted his life, a winner.
This past June, Senators Bernie Sanders D-VT, Sherrod Brown D-OH, Tom Harkin D-IA, and Sheldon Whitehouse D-RI, put forth legislation to revive the federal estate tax and apply it retroactively for people who have died this year to 65%. To quote Bernie Sanders, “It’s time for multimillionaires and billionaires to pay their fair share.”
My questions for Sanders and others that believe like him, “What exactly does fair share mean? How much should people be on the hook for? How many months out of the year should we have to work to pay the King of the Manor? Why, after paying the King our entire lives, does the King feel the need to confiscate everything that we have already paid taxes on, at a 50% rate, the moment we assume room temperature?”
According to the U.S. Small Business Administration, there were an estimated 29.6 million businesses in the U.S. in 2008, prior to the recession. Small companies with fewer than 500 employees, most of which are family owned, accounted for 99.9% of the total. Small businesses employ over half of all private sector employees, generated some 64% of net new jobs over the past 15 years, and account for 44% of total private payroll. Some 52% are home-based; 2% are franchises.
Dick Patton, president of the American Family Business Institute states in Investor’s Business Daily, “If owners of just one-half of 1% of the nation’s 29.6 million small businesses, (which is less than our mortality rate) pass away in any given year, we’d be talking about 147,000 business owners meeting the grim reaper. That’s a real number; not a statistic.”
These are businesses that you interact with everyday, restaurants, cleaners, farms, construction companies, etc. Not just billionaires and sports team owners. When the business owners die, the government includes all business property, equipment, vehicles and inventory in calculating that individual’s net worth for purposes of assessing the estate tax. This forces many families to sell off portions of the business, break up the business, and even liquidate, in order to pay taxes.
The death tax is a small business/family business killer. Proper estate planning is the only way you can protect what you have built. If you need help in preparing for the inevitable please feel free to contact us.
Patten Dick Who’s On The Side Of Family Business? Investor’s Business Daily July 13, 2010
Staff Steinbrenner’s Death Raises Estate Tax Issue Investment News July 13, 2010