Jewish World Review Feb. 27, 2001 / 4 Adar, 5761
Because you are so mega-wealthy you can both leave billions to the government and, if you so choose, billions to your kids when you die. But, between now and then you can work to make sure that when a typical hard-working smart-saving "Joe" bites the dust, the government is by far his biggest, if not sole, beneficiary.
Billionaires George Soros, Warren Buffett, David Rockefeller and scores of their mega-wealthy friends call themselves the Responsible Wealth Coalition. And their highly publicized efforts of recent weeks to preserve the estate-tax, better called a "death-tax," might be paying off.
A centerpiece of their campaign was a petition in the New York Times signed by some 200 jumbo-jet setters. (Buffett himself didn't sign because he didn't think the petition was draconian enough.) Apparently this gilded gang felt called to step forward now because of the overwhelmingly popular move to repeal the confiscatory tax, a rate as high as 55 percent on "estates" of more than $675,000 when passed to anyone except a spouse. That dollar amount, which will eventually rise to $1 million, includes everything of value - land, homes, other buildings, business assets, everything. (It's worth noting the government only takes payment in cash.)
Polls consistently show repeal is hugely favored even among folks who aren't likely to be stung by the death-tax. That's why in the last Congress some 65 House Democrats voted to repeal the onerous assessment, though they could rest easy knowing President Clinton would veto the measure And repeal of the death-tax is a centerpiece, though lately a weakened one, of President Bush's agenda.
Of course the rich have always had estate planners, insurance agents, and attorneys who, for tidy sums, can help them avoid or minimize Uncle Sam's bite.
So the death-tax hits hardest those folks who can't afford the fancy financial footwork. That includes struggling farmers and small businessmen whose families are often financially wiped out by the tax, as well as just about anyone else who didn't come into the world wealthy or strike it rich but has worked hard, saved and invested to leave something to their families.
Soros and cronies argue that inherited wealth is corrupting.
They may well be right, but decisions about the appropriate distribution of wealth should be made by the family that created it - not government.
The pro-tax gang also maintains that getting rid of the death tax would take needed funds from other government programs. Baloney. The "cost" of ending the tax is about $220 billion over the next ten years, not even 5 percent of the conservative estimate of our budget surplus over that same time. And this doesn't consider the tax revenue generated when heirs, not government, spend, invest, or build on those inherited assets.
The death tax elite argue that repeal would seriously crimp charitable giving. Well maybe the mega-rich give for purely cynical reasons of tax avoidance, but most people don't. In fact according to a Heritage Foundation study, charitable giving relative to personal income and economic output has held quite constant since the earliest days of the Great Depression, regardless of huge variations in tax rates.
Worst of all, this pathetic group of the super-monied say that the tax is "just" since it affects only about 2 percent of taxpayers. Easy for them to say, but this misses the point entirely. It's simply wrong for government to tax for a third time the very same money it's already taxed twice as income and capital gains. Besides, is it "just" for the government to encourage the "die-broke" policy it does now?
How dare these mega-rich say, in essence, it's greedy for Mr. Jones to want to bequeath his hard-earned "wealth" to his heirs for their benefit; but it's generous of the government to confiscate Mr. Jones' wealth by force to spend for its benefit?
Actually, this gives me an idea. If the super-rich pro death- tax gang
is so concerned about the corrupting influence of wealth, if they are
so worried that the loss of the tax will impact the federal treasury
and charities, then let's just act on their advice and have
government confiscate ALL of their assets at death. On second
thought, how about just taking it all right now? I think I'll start a
02/22/01: Brave when the battle's done