How a rich dad’s obsession with the estate tax nearly tore his family apart

Amid the rancor and rhetoric of the fight over the “big, beautiful bill,” we heard many a story about Americans likely to suffer as a result of it—families who might lose access to elder care and food stamps and homes and health insurance and other important things. Largely missing were insiders’ views of the kinds of families who stood to gain.

To be fair, Harvey Schein—the central figure in Death & Taxes, a new documentary from his son, filmmaker Justin Schein—passed away in 2008. When the younger Schein began collecting family footage, he wasn’t so much thinking about tax policy as the unraveling of his parents’ marriage—which as it happened was tangentially related to tax policy.

Harvey, raised in Depression-era Brooklyn, had managed to hustle and scrape his way up the corporate ladder, aided by the GI Bill, to make his fortune in the entertainment industry as a top executive at companies like Columbia Records, Sony America, and Polygram. Harvey saw himself as self-made, and multiplied his wealth with investments in the stock market.

He was frugal, however, and bristled at the notion of Uncle Sam taking a bite of his nest egg. He’d worked hard and paid his taxes and the estate tax was “double-taxation,” he would say—a common if misleading sentiment, as the film reveals by exploring myriad wealth-friendly aspects of the tax code his argument fails to account for.

Justin and his brother, Mark—Harvey’s heirs—were uncomfortable with their privilege. Growing up in New York City in the 1970s, Justin took notice of the stark inequality around them. As a teenager with growing political awareness, he pushed back against his father’s rigid worldview, and they bickered. He attended Stanford, but rather than going on to Wall Street or Harvard Business School, he began making documentaries—which Harvey felt impractical: “One minute he would be very proud that he helped facilitate my career. They next minute he asked when I was going to start making, you know, real movies. That was Dad.”

But Harvey was a difficult person to live with—loving but prone to depression and angry outbursts. His tax obsession made matters worse. His wife, Joy, is a consummate New Yorker who’d been a professional dancer before marrying Harvey. But after Harvey retired, he was so dead set on avoiding taxes that he resolved they would relocate to spend more than half of each year in Florida, which, unlike New York, doesn’t have an estate tax.

Joy was not joyful there, to say the least.

The marriage suffered, and in the end Harvey would be stricken with lymphoma. “I stopped shooting when it was clear that, you know, a film needs drama and my family needed peace,” Schein told me in the interview excerpted below.

After his father died, he shelved his footage until 2017, when Donald Trump came to power and Republican lawmakers began plotting their regressive tax cuts. “I was seeing the reality that the estate tax could be abolished, and I was wanting to explore that,” he recalls. “I asked around and nobody would talk to me about their estates, and it became clear that this footage of my family could be a good foundation.”

It was indeed. The film humanizes an aspect of our unequal society seldom explored in a nonfiction visual medium—the way wealth, and our desire to hoard it and pass it to our children, can result in unhappiness even for the haves—while the policies that enable the hoarding beget further misery for the have-nots. Schein sits down with experts ranging from liberal economists, academics, and policy wonks to conservative anti-tax crusaders to explore the issues, while his family saga provides a compelling thread.

Death & Taxes is well-timed, with this month’s passage of a wildly unpopular Republican bill that rewards America’s richest at the expense of its poorest. The film is showing this week in selected theaters in New York City and Los Angeles—other big cities are expected—along with an evolving list of one-off showings in smaller cities. (I will be moderating a post-showing conversation at Berkeley’s Elmwood Theater on Tuesday, August 5, at 7 pm.)

Schein also hopes to get the film in front of wealthy audiences, where it might jumpstart some useful conversations. He expects it will be available for streaming in the fall or early winter, though no deal has yet been inked.

“PBS was interested, but then the arm that PBS wanted to show it on was eliminated,” he told me. “I’ve had festivals invite us and then retract it because they’re afraid that their funders would be offended. So it’s a little bit of a minefield, but it also means that it’s, you know, more relevant.”

This interview has been edited for length and clarity.

This all began with you documenting what was happening with your family, and only later did you come to focus on your dad’s tax obsession. Was there a particular moment or event that prompted that pivot?

Well, I always I knew that I had this footage, and he and I were butting heads about politics and his insistence that taxes and his pocketbook took precedence over anything else. That started when I was a teenager. I was in like seventh grade when Reagan was elected, and at first I was like, Oh, Dad’s voting for Reagan. Maybe that’s cool. Maybe I should be behind that? And then slowly, as I got into the punk scene and became more aware, and as I was looking to push away from my dad, we would argue. We argued about apartheid and abortion—things like that. And taxes.

As you were becoming more aware of the inequality in our society?

Yeah. In the film, there’s that moment where I took the bus up to Horace Mann every day, right through Harlem, which was a burned-out shell, and that was 10 blocks from my house. It became clear, looking out the window, that there was a lot of inequality. And nobody was talking about it, certainly not when I got off the bus at school. So that bus ride was a really important part of my education.

The other side of it was the fact that my dad was very proud that he had a rags-to riches-story where he worked hard and was the only kid in his family to go to college and he became so successful. And this was what America was supposed to be about. And it was just becoming clear that it was becoming much harder for everybody to work hard and achieve success.

In the 1980s and 1990s, estate taxes were way higher than they are now, and the exemption—the amount of money you could give your kids tax-free, was a lot lower. I see why your dad might not like that. But the top tax on large estates is now 40 percent and Congress doubled the exemption in 2017. It’s now $28 million for a couple, soon to be $30 million thanks to the “big, beautiful bill.” It’s a little nuts that a child can now inherit tax-free superwealth.

Yeah. Until 1976, the exemption was $60,000, and I think like 10 percent of Americans were subject to it. That was problematic and needed to be changed. People should be able to pass on a reasonable amount of their security and wealth for their kids. But the loopholes are causing a problem: Huge fortunes are going untaxed. There’s the stepped-up basis rule.

Right, and also these grantor trusts and other tricks that help rich families sidestep the estate tax entirely. Your dad is pretty focused on this idea of double taxation. He says he worked his ass off and paid his taxes, so why should his estate pay more? That sounds reasonable on the surface, right? Why should we have an estate tax?

For one thing, it’s this myth that these successful people do it on their own, and so they deserve to keep more of it. My dad went to college and law school on the GI Bill. When he rose to prominence in the ’50s and ’60s, taxes were super high and that was creating this fertile ground for the American economy to prosper, with infrastructure and stability and a stable working and middle class and education—all these things contributed, I believe, to his success, and is a reason we need a reasonable estate tax.

Would it be fair to say most Americans don’t understand the nuances, and may well think they’re going to be taxed on minor transfers of wealth to their children?

Yeah. There’s definitely this myth. And I think it was John Steinbeck who said, “Socialism never took root in America because the poor see themselves not as an exploited proletariat, but as temporarily embarrassed millionaires.”

When you go out on the street and ask people about the American dream—which I did—it’s universally accepted that America is a meritocracy and anybody could strike it rich. People still come to America hoping for that. But we need to understand that that is becoming harder and harder to achieve. And I don’t think that’s a partisan issue.

The film talks about how unrealized investment profits escape taxation. A guy like your dad, most of his wealth is from his investment gains over the years. And the failure to tax those returns unless the assets are sold is a major reason we’re seeing this massive concentration of wealth at the very top.

I mean, looking back at my dad over the years, there was this whole period where there were tax shelters—there was the Schein cattle company and the Schein oil company. And those were, I think, just on paper—I don’t think we ever had a cow or an oil well. Eventually those loopholes were closed.

So these companies were totally bogus?

I have no idea. I was a little kid then. It was legal. It was clearly a strategy that worked for a number of years and then was closed. It’s a game people who have this money love to play. And why wouldn’t you? It’s better than any casino, because you’re the one writing the rules with your other wealthy friends.

But you could just as easily ask, why would you? Because there’s the competing idea that, hey, I have plenty of money, so maybe I don’t need to do this?

Yeah. And the fact that my dad went from being this very Brooklyn kid—who wanted to raise his family amid this diversity—to living on an island in Florida surrounded by millionaires. You lose the sense of community and why your contribution to society is important. I think we need to change the conversation so that when Trump says it makes him smart to avoid taxes, people realize that “smart” is subjective, and it’s clearly in some ways un-American to be hoarding wealth.

Or quintessentially American!

[Laughs.] Yeah. But there have been times when there was more of a sense of community and responsibility to each other. I think that’s possible again in our country. The estate tax was created in a time very similar to this one, and was partially intended to keep America from being too aristocratic.

Things have clearly gone haywire, which is why [former Trump adviser Gary] Cohn said “only morons pay the estate tax.” That’s why the estate tax wasn’t abolished in this last budget: It doesn’t need to be because it’s been completely emasculated. It’s almost like a front.

Will you talk a bit more about the the discomfort you and your brother had knowing that you stood—or stand—to inherit a lot of money?

It is complicated, because I still hear my dad telling me that it’s not my money, and I have a responsibility for my grandchildren to pass it to them. But the reality was that, in the film, I received a letter from my dad when I was in college telling me how unhappy he was, and I saw what [his tax obsession] did to my parents’ marriage.

Nobody is talking about making rich people poor. We’re talking about stopping this bizarre game we’re playing to avoid as much taxes as possible at the expense of our democracy. Now that I have kids of my own, two boys like my dad did, I see the harm being done to the country. And I feel like inheritance goes beyond stocks and bonds.

That’s a good point. I also want to bring up the part in the film where you ask your wife what she thinks about you doing this. And she basically says you should be careful, because people will pull out the world’s smallest violin in response to a rich boy’s discomfort with his privilege. People will say stuff like, You have issues with inheritance? Hey, send the money my way.

I’m already getting that.

But the discomfort is real.

I mean, if you don’t have the feelings, that’s more of a problem than having them.

One thing you didn’t touch on is this argument Republican politicians dust off every time the estate tax comes up. They claim it hurts family-owned companies and family farmers and small businesses. But that’s very misleading, isn’t it?

Yeah, it’s completely false—certainly the farm issue is complete disinformation. First, family farms are being destroyed by giant agribusiness. But also, show me one family farm that has been lost because of the estate tax. There are so many rules that protect them.

And the number of estates that exceeded the exemption was very, very small even before Trump and Congress doubled it.

Yeah, maybe that was an issue in the 1970s that needed to be corrected.

And it was.

It was overcorrected. And now we have a big problem.

We never do learn what happened after your father’s death, insofar as you and your brother presumably inheriting his wealth and how you’re dealing with that.

Part of the reason that is that my mom is still alive. Technically the estate goes to her. But there are trusts and LLCs and things that have been created. I mean, we haven’t actually had to deal with it. I have had to deal more with thinking about my own kids.

My dad started on day one with me, you know, passing money. And I have been extremely derelict in doing that because, partly because of my conflicted feelings. We have 529 [college savings accounts] for our kids and things like that. But I haven’t created any network of trusts, and I’m certainly not moving to Florida.

I don’t have to do much, because as privileged and wealthy as I am, this [$30 million] exemption pretty much does the job. I mean, I’m happy to speak out against it, and if and when that changes, I would create a situation where my kids didn’t have to worry about their health care and would have a down payment for a house. But I’m not doing what Harvey did.