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FORD AND TAXES

December 27, 2006

Former President Gerald Ford died yesterday. While taxes didn't play a large role in his brief term in office, the tax law had a large part in getting him to the White House.

Mr. Ford wasn't Richard Nixon's elected Vice-President. Spiro Agnew was Mr. Nixon's running mate in both his elections, including the 1972 drubbing of George McGovern. Things went downhill rapidly in the second Nixon term. Less than nine months after taking his second oath of office, Mr. Agnew resigned and pleaded "no contest" to tax evasion charges. The charges arose from bribes received by Mr. Agnew as Governor of Maryland.

For the first time, the 25th Amendment to the constitution kicked in, and Mr. Ford was nominated for the Vice-Presidency and confirmed by the Senate. Less than a year after that, Mr. Ford capped his resume when President Nixon resigned in disgrace.

There was one significant piece of tax legislation in the Ford administration, the Tax Reform Act of 1976. The current structure of the estate and gift tax dates from the 1976 act, as do the $3,000 capital loss cap, the limits on vacation home losses, and the "at-risk" rules of Section 465. President Ford left behind a top tax rate of 70% (starting at $100,000 on joint returns), a top capital gains rate of 35%, and a top corporate rate of 26%. No wonder there were a lot of C corporations then.

As his term saw the pardon of a disgraced former president, the fall of Saigon, and the risible "Whip Inflation Now" campaign, tax policy probably won't be what historians talk about when Mr. Ford's name comes up. He failed to win re-election in his own right, but a few years of President Carter made Mr. Ford look pretty good by comparison. Given the awful political hand he was dealt, he held things together well. Rest in peace, President Ford.

Link: Pajamas Media Ford Roundup

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