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Billionaire’s estate tax ‘windfall’ a boon to Pennsylvania coffers

HARRISBURG Pa. (Reuters) – A whopping $100 million tax payment to Pennsylvania by the estate of a conservative billionaire is a welcome addition to the state’s strained finances, state officials said on Monday.

The inheritance tax payment made by the estate of Pittsburgh’s Richard Mellon Scaife, whose fortune was made in banking, publishing and oil, dwarfed any previous inheritance payments, they said.

The $100 million “absolutely” will have a positive affect on the state’s balance sheet, a spokeswoman for the state Department of Revenue said.

It was “something we didn’t plan for,” Elizabeth Brassell said, adding, “This was an anomaly, a windfall.”

Scaife, who died on July 4 at age 82, was a key donor to conservative political causes.

He owned the Pittsburgh Tribune-Review and bankrolled the American Spectator magazine, which accused President Bill Clinton and Hillary Clinton of fraud in the Whitewater real estate deal, investigated Clinton’s alleged affairs and claimed the death of former White House counsel Vincent Foster was a murder committed in a Whitewater cover-up.

In 1998, the then-first lady was referring, in part, to Scaife when she complained in an interview that a “vast right-wing conspiracy” was trying to destroy her and her husband.

Scaife was a member of the wealthy Mellon family, whose fortune came from banking, oil and metals.

His estate is expected to pay another $30 million to $40 million in a final settlement that is due by April 2015.

Suffering from a lagging fiscal recovery, Pennsylvania has about $50 billion of unfunded long-term pension liabilities.

Both Fitch Ratings and Standard & Poor’s Rating Services downgraded their ratings of Pennsylvania debt last month.

Brassell said the Scaife payment would help offset $125 million in expected gaming fees the state may not see.

The gambling revenue was anticipated from the openings of several new casinos that were delayed by appeals from losing bidders for casino licenses.

The biggest inheritance payment prior to this was $20 million, Brassell said.

Under Pennsylvania’s inheritance tax, on the books since 1826, spouses pay nothing, children pay 4.5 percent, siblings and parents pay 12 percent and unrelated heirs pay 15 percent.

Scaife was survived by a daughter and a son.

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Meet Paul Raymond

Meet Paul Raymond

Mr. Raymond is a sought after speaker in tax controversy law by many attorney, accountant, and business groups and at the request of the Internal Revenue Service, has presented programs at the IRS Nationwide Tax Forum, attended by tax professionals throughout the United States.

Additionally, he continues to be an active member in the Section of Taxation, American Bar Association, where he was the Past Chair of the Employment Taxes Committee.

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