In an attempt to protect wealthy Americans from increased taxation, Fox erroneously reported the estate tax will affect a large number of small farms and businesses. In reality, President Obama's plan to increase the estate tax would only marginally increase the number of small farms and businesses subject to taxation, and those affected would experience low effective tax rates.
On Fox & Friends, reporter William La Jeunesse ran a segment highlighting California rancher Kevin Kester and his take on potential increases in the estate tax. Throughout the segment, La Jeunesse continually, and erroneously, referred to the estate tax as the “death tax,” accompanied by the following chyron:
From the November 16 edition of Fox & Friends:
Of course, the entire purpose of the segment is to create the appearance that the estate tax, which is intended to be a tax on the very wealthy, falls on a large number of small farms and businesses. However, this is simply not the case.
The report highlights that President Obama plans to alter current estate tax policy, lowering the maximum exemption from $5 million to $3.5 million and imposing a 45 percent rate on estate values exceeding that amount. This proposal is simply a reversion to 2009 estate tax exemptions and rates.
According to an analysis by the Center on Budget and Policy Priorities using Tax Policy Center data, “only 40 small business and farm estates nationwide will owe any estate tax in 2012.” CBPP previously estimated the change in the number of small farm and business estates affected by a reversion to 2009 policy:
Despite rhetoric from estate-tax opponents portraying small businesses and farms as being severely burdened by the estate tax, only 60 small farm and business estates in the entire country would owe any estate tax next year under the 2009 rules, TPC estimates. [Center on Budget and Policy Priorities, 7/24/2012, emphasis original]
In short, only 20 new small farm and business estates would be affected by President Obama's proposal. The same report notes the effective tax rate is far lower than the headline 45 percent rate due to “special provisions targeted to farm and business estates.” Taking such provisions into account yields an estimated effective tax rate of 11.6 percent, which is lower than the current capital gains rate.
Attempting to characterize taxes on the wealthy as affecting a large number of Americans is not new for Fox, which has taken particular care to push those misleading claims in light of current federal budget negotiations.