Hypocrisy and Distortion: Republican State Senator Scott Frantz & Hearst Newspapers

by: thomashooker

Fri Feb 27, 2009 at 18:32:16 PM EST

Perusing the DRS study's figures, it turns out that over the four year period covered by the study, the state lost 175,700 residents to other states, while 153,094 people moved into Connecticut, a net emigration of 22,606.  Now keep that out-migration figure in mind: 175,700 left.  Now take a look at the household incomes of each group.  Those leaving the state averaged $66,357 in income; those coming into the state averaged $68,124 in household income.  So far from the estate tax causing a mass out-migration of wealthy Nutmeggers, in fact (are you reading this, Senator Frantz?), the statistics show that those coming into the state earned higher incomes than those leaving.  Furthermore, Senator Frantz concentrates on the emigration of older retirees, while completely ignoring the fact that since 2000 Connecticut has ranked dead last among the fifty states in the percentage of its young people who emigrate to other states, according to a recent study by Central Connecticut State University.

Now another set of data.  Emigration to the state of Florida totaled 27,773 people, while 11,603 individuals moved from Florida into Connecticut.  That means a net loss of 16,170 people to Florida.  Those moving from Florida to Connecticut had household incomes of $45,870, while those leaving for Florida had household incomes of $70,067.  Now there is a net outflow of people who are wealthier, but take a look at more numbers.  Look which state accounts for the second largest net out-migration from Connecticut: North Carolina.  While 3,252 people moved from North Carolina to the Nutmeg State over that period, 6,790 moved to the Tarheel State.  And North Carolina- yep! you guessed it!- has an estate tax.

Fully 45% of all of the taxes collected for the estate tax came from exactly ten individuals.  That's right: just ten people accounted for $75 million of the tax, or 45% of the total.  And the average tax rate on all estates?  Less than 7%.  Less than 7%!  

So let's review.  The people moving into the state of Connecticut are, on average, wealthier than those who leave.  While the net household incomes of those moving to Florida is higher on  average, than those moving into Connecticut, still $70,067 is hardly the mega-wealthy.  And just ten people that last year ('04-'05) paid nearly half of all the estate taxes collected.  So Republican Senator L. Scott Frantz, in the midst of the deepest economic downturn since the Great Depression, with the state desperately trying to balance its budget by cutting back on all varieties of critical services to the people of this state, is actually trying to cut estate taxes that come largely from a tiny handful of wealthy individuals.  And let's keep in mind that Frantz himself manages a hedge fund whose assets are comprised of his own family's wealth.  Am I the only one here who finds that deeply troubling?

Now before letting Neil Vigdor off the hook for his errors in fact, let's keep in mind that Vigdor purposely intended to write a propaganda piece.  Elimination of the estate tax has been a favorite goal of Connecticut Republicans for some time.  Vigdor knew full well that his was a piece of advocacy, not journalism, because he tucked the one opposing voice at the very end of the article, and filled the rest with anti-estate tax rhetoric.  And of course the management of Greenwich Time, which is owned by Hearst Newspapers, knew full well what they were doing in placing his article squarely on the front page above the fold.  They even gave him some 700 words for the article, a very long length for that paper.  On the other hand, only one article about Jim Himes made it to the front page during this period, and that one critical of him; other mention of Congressman Himes and the critically important Stimulus Bill he helped to pass was relegated to the inside pages.

UConn basketball coach Jim Calhoun took a lot of grief for his "not a dime back" and "shut up" comments to Ken Krayeske.  Frankly, however, I find Senator Frantz' advocacy of the repeal of the estate tax to be far more objectionable, especially in these economic times, and coming from a guy who presumably would be a major beneficiary of the repeal of that law.

Last October Brooks Community Newspapers publisher Michelle McAbee, in a pre-election hit-job, frontpaged an article about Jim Himes' wealth in every one of her weeklies.  Now that she's the publisher of Greenwich Time/Stamford Advocate, i.e., Neil Vigdor's boss, let's see if she has the integrity and journalistic courage to publish an article about L. Scott Frantz' wealth and how much he might stand to benefit if the estate tax were repealed.  It seems an eminently newsworthy story.  Or let's see if Don Harrison, the editor of Greenwich Citizen, also owned by Hearst, the newspaper whose reporter wrote the story about Jim Himes' personal wealth, asks the same reporter to write about L. Scott Frantz' family wealth.  They should.  But I certainly won't hold my breath waiting for either article.  

But let's not let the Department of Revenue Services off the hook here.  After giving the statistics on migration and average income, they then sent out a survey not to the people who had emigrated to Florida or elsewhere.  No, they sent their surveys to estate planners and CPA's.  In other words, they sent their questionnaires to precisely the people who would be serving the wealthiest emigrants.  Keep in mind that thousands of people have migrated to Florida or elsewhere, but less than three hundred in the latest year paid the estate tax.  In other words, DRS conclusions were based on an outrageously biased technique that is so blatant, it is a joke.  

And that's not the end of their absurd "study".  They also compared average economic growth in states with estate taxes with growth rates in states without estate taxes and concluded that growth is higher in those states without.  But they made no attempt to give other factors that might have contributed to the lower growth rates, such as Connecticut's ranking of 48th of the fifty states in the percentage return on its federal taxes paid to Washington!  That represents an enormous hole in our economic body that is bleeding the state.  But the DRS study made no mention at all of that or other factors. The Department of Revenue Services and Senator Frantz might also consider that Connecticut's average costs for assisted living and nursing homes are second highest of any state in the entire country!  Indeed, assisted living in Connecticut is 50% higher than it is in Florida on average, according to a 2006 study by the AARP Public Policy Institute.  

In short, the DRS study seemed written in such a way that it could be used by anti-estate tax advocates to attack the tax.  It just wasn't an accurate or an honest study.  

It's not just Neil Vigdor who needs to make amends.  It's also Michelle McAbee, Don Harrison, and, last but certainly not least, new Republican Senator L. Scott Frantz.  What a shameful legislative debut.