Black farmer fights to kill death tax

— John Wesley Boyd, Jr., lives off the land raising cows, growing soybeans and corn on 400 acres he owns in rural Baskerville, Virginia.

He works alongside his father, John Wesley Boyd, Sr., 75, who farms 117 acres nearby, which he inherited from his own father. Together they have faced drought, fluctuating crop prices and encroaching development. Farming isn’t an easy life, Boyd, Jr. said, but it’s one that he enjoys and hopes to pass down to his own children.

Unless, he said, his family is forced to sell the farm to pay the estate tax upon his death.

“People work hard to get something and make it grow,” said Boyd, 50. “Then, when they want to pass it on to their families, they owe the government so much in estate tax that the family has to sell the business to pay it. It’s not right.”

Boyd, founder and president of the National Black Farmers Association, is among a group of small and medium-sized business owners who are lobbying for the repeal of the estate tax, which federally is levied on transferable assets beyond $5.45 million— double that for married couples. The U.S. Senate soon will consider legislation to rescind the 40-percent federal estate tax. The House of Representatives voted to end it last year.

The estate tax, sometimes called the “death tax,” has been widely discussed since the loss of musician Prince Rogers Nelson, aka Prince, 57, who died without a will on April 21, at his Paisley Park Studio complex in Chanhassen, Minnesota. Prince, who died of an opioid overdose, was unmarried, had no children and was preceded in death by his parents.

Under Minnesota law, his sister and five half-siblings will inherit his assets, which are estimated to be worth up to $300 million. Estate planners believe that Prince’s fortune may shrink in half because he departed without directing his assets into charitable donations, trusts or other tax shelters.

Business owners who oppose the tax say it burdens heirs with generating cash when most of the decedent’s assets are tied up in their operations. The federal tax is due nine months after the death, but probate attorneys say the IRS will let heirs pay over several years.

Fifteen states, including: Minnesota and Washington, D.C., also assess estate taxes; and seven states levy inheritance taxes, according to The website says several states have increased their exemptions in recent years, including Maine, thus reducing the number of people subject to estate tax. Tennessee dropped its tax this year.

However Richard Phillips, a senior policy analyst for Citizens for Tax Justice, said the tax only affects two percent of the wealthiest Americans. He challenged claims that the estate tax threatens small businesses.

“The estate tax is a crucial tool for curbing the worrisome growth in wealth inequality over the past couple decades,” Phillips said via email. “Rather than hurting small business, the estate tax helps ensure that we have the public resources that allow such businesses to flourish.”

The House passed the Death Tax Repeal Act of 2015 that April 16, 240-179. Congressmen Sanford D. Bishop, Jr. (D-Georgia) and Kevin Brady (R-Texas) championed this bill.

“The Death Tax represents all that is unfair and unjust about the tax structure in America because it undermines the life work and life savings of Americans who want only to pass on to their children and their grandchildren the fruits of their labor and the realization of their American Dream,” Bishop told Urban News Service via email.

The first estate tax was levied in 1797, to bolster military services in response to a perceived French threat, according to It re-emerged in 1862, to help fund the Civil War and returned in 1898, to finance the Spanish-American War. It always was repealed. Today’s tax was passed in 1916 – 100 years ago — a year before America entered World War I. It has remained ever since.

John Boyd, Jr.’s assets, like those of many farmers, are tied up in his land and crops, he said. He and his wife Kara, 46, have traveled to Washington, D.C., to lobby for estate-tax repeal. He said the tax is always a hot topic at the National Black Farmers Association’s annual conventions.

The Boyds gained a foothold in the middle class because of land ownership, John, Jr. said. John, Sr. — known as “The Boss” — inherited his acreage from his father, Thomas Boyd, who purchased a large parcel when land ownership eluded many blacks.

Upon Thomas Boyd’s death, the property was divided among his 15 children. John Sr., the youngest child, and his brother, Benjamin (who lives in New York) are their generation’s last surviving siblings.

“Land is the most powerful thing that we can possess,” John Boyd, Jr. said. “Eliminating this tax would directly help a lot of farmers keep their land … That would help families now and for generations to come.”

Foreclosure crisis lingers in the black community

— Affluence is no antidote to foreclosure.

In Prince George’s County, Maryland — one of the United States’ wealthiest majority-Black jurisdictions — the foreclosure crisis has hammered several solidly middle-class communities. These include Perrywood, a neighborhood of two-story homes near the county seat in Upper Marlboro; Marleigh in Bowie, where the local homeowners association mows the lawns of foreclosed residences that the banks don’t maintain; and Fairwood, where the median income is $170,000, according to the U.S. Census.

“They didn’t understand what it meant to take out a second mortgage, to refinance or to receive a subprime loan, they just made purchases,” said Bob Ross, president of the NAACP chapter in Prince George’s County. “So when the bubble burst, they were stuck.”

NAACP New York State Conference economic development chair Garry Anthony Johnson calls foreclosures “an epidemic” for people of color.

“It’s a troubling reality that African-Americans and other minorities continue to experience disproportionately high levels of unemployment, poverty and foreclosures,” Johnson said.

Housing counselors and other experts told Urban News Service they blame unscrupulous lenders for the crisis. At a time when many prospective buyers were eager to purchase and as home prices skyrocketed, some lenders took advantage by offering Black buyers discriminatory loans, these observers said.

“They were products that were predatory in nature where the interest rates were inflated, there were prepayment penalties if you tried to pay the loan off or refinance and balloon payments,” said Charles R. Lowery Jr., the NAACP’s director of Fair Lending and Inclusion. “You wouldn’t get a loan that was suited to you, but the broker and the lender would make money because they sold it to you. That was their only concern.”

George Mason University law professor Todd Zywicki attributes the largest proportion of the fraud that occurred during the foreclosure crisis to homeowners and lenders conspiring to “defraud” investors.

“Driven by very low interest rates and a deterioration of underwriting standards catalyzed by government policy, America turned into a nation of real estate speculators,” Zywicki, a senior fellow with the F. A. Hayek Program for Advanced Study in Philosophy, Politics and Economics at the university’s Mercatus Center, told Urban News Service. “Consumers were essentially living in their investments and rode up the housing appreciation, and everyone wanted to get into the party.”

Zywicki said many of the practices characterized as fraud — including what he called “teaser” rate mortgages or “complex” mortgages, such as negative amortization — contributed little to the crisis.

“In the end, what made the foreclosure crisis so bad was not fraud…but that housing prices ballooned and then crashed,” Zywicki said. “When housing prices crashed, many people recognized that paying for a home that was $50,000 or $100,000 underwater was no longer a good investment. And the largest driver of foreclosures was the deterioration of down-payment requirements and cash-out refinancing, which meant that when housing prices fell, many people fell into negative equity positions, at which point it became rational for them to default and walk away from their homes. This dynamic was no different for minority and non-minority borrowers.”

In 2007, the NAACP filed suit against Bank of America, Citibank, HSBC, JPMorgan Chase and Wells Fargo, alleging that these financial institutions had committed unfair lending practices. The NAACP dropped the suit against Wells Fargo after the bank agreed to invest in a “financial freedom center” to assist homebuyers of color. The lawsuit was settled in 2010 after the banks funded programs to help homebuyers, Lowery said.

In August 2014, then-U.S. Attorney General Eric Holder announced the Department of Justice had reached a $16.65 billion settlement with Bank of America “to resolve federal and state claims against Bank of America and its former and current subsidiaries,” including Countrywide Financial Corporation and Merrill Lynch.

“Under the terms of this settlement, the bank has agreed to pay $7 billion in relief to struggling homeowners, borrowers and communities affected by the bank’s conduct,” a Department of Justice statement said.

Last year, Cook County, Illinois, officials sued Bank of America and Wells Fargo in federal court. They claimed the banks had targeted people of color with discriminatory loans that led them to foreclose. The suits alleged the banks’ actions had cost the county property tax revenue and left it responsible for maintaining abandoned buildings. The Wells Fargo suit was dismissed earlier this year.

Officials in Baltimore, Cleveland, Los Angeles and Memphis have also sued lending institutions in similar cases.

NAACP chapters across the United States are working to support people of color who are ensnared in foreclosure, Lowery said. On Nov. 14, more than 300 people attended a Prince George’s County NAACP “Help and Hope for Homeowners” workshop at Largo High School. The event was the NAACP’s fourth this year, following similar gatherings in Chicago, Fort Lauderdale and Long Island.

One woman who attended the NAACP meeting in Maryland said she was there because she and her husband’s 3,800-square-foot home in the Woodmore South community was foreclosed after they failed to pay their mortgage for more than six months. She was laid off from her paralegal job more than a year ago. Her husband owns an entertainment company. She said she and her husband bought their home for about $700,000 in 2008. It now is worth less than $500,000.

“My husband is in the luxury entertainment business, and when people started cutting back on luxuries, we had less money coming in,” she said. “Then I lost my job.”

This woman spoke to Urban News Service on the condition of anonymity to avoid the embarrassment that often affects those who face foreclosure.

“I have nightmares about driving my daughter to school and returning to find our things on the front lawn,” she said.

Phyllis Ellis, vice president of home ownership preservation for HomeFree-USA, based in Prince George’s County, said it is a misconception that most people of color who lost their homes in the foreclosure crisis intentionally signed mortgages that they knew were unaffordable.

“There were lenders who targeted minority communities,” she said. “People were manipulated, so they took the product they were offered when they may have qualified for a more traditional home loan. A lot of the problems originated from the types of mortgages that were marketed to our communities.”

The news going forward for Blacks is bleak, according to Algernon Austin, senior research fellow at the Center for Global Policy Solutions in Washington, D.C.

Wages are still down and joblessness is still up.

“Data from the Urban Institute out to 2030 do not show a recovery,” Austin said. “[They show] a continued slide in terms of home ownership for Blacks. That’s pretty distressing. It doesn’t show any strong upward movement for Whites, either.”