In 1935 the estate tax was changed. The exemption was lowered to $40,000 and top tax rate was raised to 70% and in 1941 to 77% with the top bracket raised from $10,000,000 to $50,000,000.
Henry Ford and his son owned 97% of Ford Motor Co stock and the new law meant that to satisfy the tax the Ford family would lose control of the Company when $321 million in inheritance tax was due. Instead Ford had his lawyers set up a foundation to receive 95% of the stock in non-voting shares, while Ford and his son, Edsel kept the 5% voting shares and control of the Company. Source: Henry Ford by Vincent Curcio
The result, of course, was the Ford Foundation which has benefited millions of people for decades. Today the Foundation still gives grants $500,000,000 a year.
One can only wonder if the $321 million going into government coffers in the 1940s would have done as much good as the Foundation.
Categories: Observations on life