Hancock scare tactics

Kevin Hancock’s July 4 opinion piece on the estate tax raised some questions. Hancock is the chairman, president and CEO of Hancock Lumber Co., and yet he owns no stock or share in the company? This would have to be true if, as he states, 55 percent of Hancock Lumber would have to be liquidated were his mother to die in 2011. And as to his mother, if that 55 percent figure is correct, it would have to be true that the company is her only asset.

I don’t know the details of Hancock’s business, nor of his mother’s personal finances, so I’ll make some reasonable assumptions based on family businesses which I am familiar with. As senior family member, Mrs. Hancock may very well own a controlling interest, 51 percent. Mrs. Hancock in all likelihood owns a comfortable home, perhaps a camp, a retirement portfolio, and after a lifetime of leading a successful business, some nice personal effects.

Let’s assume her interest in Hancock Lumber constitutes about 50 percent of her accumulated estate. This would mean the fraction of Hancock Lumber’s assets which would be subject to the estate tax would be just over 25 percent. Fifty-five percent of 25 percent is about 14 percent. So, by these estimates, it is not 55 percent of the business which would go to support the infrastructure of the United States, but a modest 14 percent. And, of course, the detail, which Hancock has cleverly omitted, is that after 2009, only the portion of the estate that exceeds $3.5 million is subject to tax. That’s some small business he’s got there.

Hancock is using scare tactics. His threat seems to be, if the Democrats deprive me of a fraction of my inheritance, I’ll have to fire some working-class Americans. I’ve grown tired of the smoke screens thrown up by those determined to continue the concentration of wealth. If Hancock does not pay that small fraction of his inheritance, working- class America will have to pick up the difference.

Martin O’Connell

Bangor