African Americans Failed at Our First Wealth Building Opportunity
People are starting to get excited about Congress planning on a new tax structure. Included in this project is the possibility of ending the Estate Tax.
This tax has been a legacy killer to many Black families. When a patriarch/matriarch passes away, the IRS will determine how much of an estate they are leaving to the rest of their family. If it reaches a certain amount, the Estate Tax will kick in and deprive the heirs of significant inheritance. This can be averted with very expensive legal maneuvers ahead of the death. Publicly held Corporation owners (shareholders) are exempt of this onerous tax also.
It is the middle class that is starting to build significant wealth that will be knocked to the “ground” by our government. Newspaper publishers, farmers/ranchers, car dealers and various other types of business owners will be the ones who get hit the hardest.
This year is a great opportunity for us to get ourselves organized and educate our elected officials to end this expensive predicament. Let us come together and deliver a final blow to this law that is intended to prevent up and coming business persons from building wealth for their children and grandchildren to last for centuries.
This reminds me of another opportunity we, as a people, had. It was the Homestead Grant Act of 1862. At the time America was expanding vastly via the Louisiana Purchase, Manifest Destiny (land grabbing from Spain, Mexico, and Native Americans).
Through a simple application process American citizens and freed slaves could receive a land grant of 160 acres. All they had to do was work the land for at least five years. Unbeknownst to many of us our forefathers participated in this process. Many of us looked at the land handed down to us by our grandparents, great grandparents etc. We think it is nice but wait it is more than that. For many of us, the land we have inherited could be miniscule compared to the land our families originally had.
I first learned about this from some Blacks I was helping in Southern Louisiana. They were upset that their land was taken away while they were growing up. One of them showed me a copy of the original land grant award. It was for 160 acres to their grandfather and signed by President Grover Cleveland. They never did a “family secession” which would have cut up the ownership of the inheritors by individual names and specific property assignments (equal parts). They had a first cousin in prison for a long sentence. He was approached by a White developer who told him that he had undivided ownership within these 160 acres. He offered to buy it from the inmate. The prisoner sold it for a modest amount and now the developer became an owner with the rest of the family.
He goes to court and files for a “forced secession” on that property. There would be an auction on the undivided property which would include all the owners. On auction day, the developer would step in and bid on the entire estate. His money over powered the rest of the family. They each received a modest portion of the sale price and he would walk off with the entire land grant. This scenario was repeated in all the applicable states.
I went online and searched some of my late relatives (the ones who had property). I entered my grandfather’s name, Thomas Alford, and my grandfather’s name, Cicero Alford. To my shock there they were! Thomas was awarded a grant of 160 acres in 1916 while Cicero was awarded his grant of 160 acres in 1901 right next door to each other. So, what happened to all this land – 320 contiguous acreage of prime farm land?
I went down to the courthouse to search land records and that told the story. There was this White realtor by the last name of Roos who obviously approached my people and suggested that he would help them apply for free land (They were illiterate and/or intimidated by applying to the federal government). When the grant arrived, Roos started buying shares from them (for his fee) and then they would quickly sell the rest to every White person around them until it was all sold out except for the 40 acres that they would keep for themselves. Looking at the books this was a cottage industry for local realtors. A great opportunity for rural Blacks just slipped through their “fingers”.
Blacks at this point in our history had little respect for land. Oh, if they only knew. When the great migration started taking place, people who still had land would sell it for a penny on a dollar just to migrate to western or northern cities. Blacks in Los Angeles would call a realtor in Louisiana to sell the land they just inherited. They would fly into the Shreveport airport, sign the papers, take the check, and fly right back to L.A. to buy a new Mercedes car. They would not even look at the land (that may have had oil, timber, natural gas, and other valuable commodities on it).
We had $millions upon $millions and just let it go. This time, let’s not let a great opportunity slip by again. Let’s get rid of the Estate Tax. Why let the IRS take it!
Mr. Alford is the Co-Founder, President/CEO of the National Black Chamber of Commerce®.