Alternet.org has republished Bill Gates’ (the dad) defense of the estate tax, Case Against Estate Tax is Bogus, whose repeal will be voted on in the U.S. Senate soon. What I find miraculous about Gates’ position is that he’s become a traitor to his class, to his pocketbook and to his offspring (who certainly don’t need to inherit his wealth); and all this in defense of a social good. How many wealthy and powerful people take a position that is anathema to their bedrock identity? One of the first times I read about Gates’ views on the estate tax was in this 2003 profile in the Seattle Times. I’ve admired Gates ever since even though I don’t often have admiring things to say about Republicans. I thought it was especially pathetic and provincial of the newspaper to insert its editor’s anti-estate tax views into this profile of Mr. Gates.
Gates, in the Alternet.org article (originally written for Knight Ridder), demolishes the “death tax” moniker and every rationale for repeal put forward by wealthy families like the Wal-Mart Waltons and Republicans. Interestingly, in the comments section a Nebraska farmer declares:
One of the more irritating myths trotted out by the anti-estate tax people is that it has caused the breakup of small farms.
This is total unmitigated hogwash!
I am a farmer myself, and a member of a leading farm organization. Our organization did research that showed that there has NEVER been a case in Nebraska where a farm had to be sold to pay estate taxes.
The right-wing no-estate-tax American Farm Bureau (of which I am NOT a member) has been publicly challenged on this issue, and has admitted that they could not come up with a single case of even the largest family farms having to pay federal estate tax.
Gates also notes that in the face of a possible $200-billion bill for post-Katrina cleanup and another $200-billion bill for Iraq it is the height of folly to propose eliminating $1-trillion from the federal coffers solely on the basis of an unproven theory that leaving that money in the hands of some of America’s most wealthy families will be better for America than using it for items like education, disaster relief, fighting poverty, etc.
It will be fascinating to watch how the senators from Louisiana, Mississippi and Alabama explain to their constituents why a $1 trillion tax break for multimillionaires and billionaires, few of whom live in their states, ranks as a timely national priority.
And tell me, will the offspring of America’s wealthiest invest any of this inherited wealth in non-profit projects like this?
Gates predicts that the proposal for an outright appeal of the estate tax will probably fail. But he notes there are various hare-brained Republican proposals to “reform” the tax including one by Sen. Jon Kyl which would raise the exemption to $10-million and lower the rate to 15% (from 47%). This would eliminate 85% of the current revenue generated by the tax. How would Kyl replace that $1-billion in revenue? He probably wouldn’t. He’d expect that Congress will just have to reduce the federal budget by a like amount. We all know where it would come from–and it wouldn’t be the Defense Department folks.
Additionally, Gates warns that such a “reform” would:
cripple the nation’s charitable sector, which according to a Congressional Budget Office study would experience a decline in estate giving of more than $10 billion a year.
Gates should know as he and the Bill and Melinda Gates Foundation which he leads are the most generous donors to America’s (and the world’s) non-profit organizations.
He proposes his own more modest reform alternative which would raise the exemption to $5-million and retain the current tax rate.
Such a reform would retain substantial revenue in the face of war, disaster and deficits, and maintain a powerful incentive for charitable giving.
Say Amen somebody!
Jason Truesdell says
I’m not sure if William Gates II (usually called Gates Sr. because nobody remembers there was another Gates before him) would be fairly characterized as a Republican.
I think that Gates II has often been closely aligned with the FDR school of the Democratic party… That the government has certain responsibilities to its people, and that the wealthy have certain obligations to the public. His son was often funding causes associated with liberalism prior to Microsoft’s antitrust troubles, including gun control initiatives. Neither of them could really be called ideologically Republican. The younger Gates has fairly progressive social values, and only started to contribute to Republican candidates when he thought it would be strategically beneficial for Microsoft. Self-preservation trumped any ideology.
Microsoft did have very generous support for families even before it became law to support things like paid leave, and has long supported same-sex domestic partnership benefits at Microsoft. The older Gates has long articulated a role of noblesse oblige, so, if nothing else, he is not the hyper-individualist kind of plutocrat associated with the Republican party.
http://archive.salon.com/21st/feature/1998/01/cov_29feature.html covers a bit of the younger Gates’ habits, which I think have been strongly influenced by the values of his parents.
I think that Gates the Younger has no particular political ideology, though I would say his father is less concerned about self-preservation at his age and might have a clearer political philosophy. The younger Gates has supported some decidedly socially progressive causes but in recent years his self-interested pragmatism has been more visible as he tries to protect the house he built.
Richard Silverstein says
Jason: I too was puzzled by the fact that most websites (including the Gates Foundation’s own) list father as Gates Sr. when I’d always thought HE was Gates Jr & son was Gates III.
I’d always heard & believed that Gates the father was a Rockefeller-style Republican (in the moderate tradition of Washington State Republican politics, which has rapidly deteriorated in today’s polarized world). But you probably know more about the Gates family than I & I stand corrected.
I have written several posts here about Bill Gates’ (the son) and Microsoft’s rightward-drifting approach to social issues (& their seeming embrace of evangelical positions regarding gay rights and their choice of lobbyists). I am hoping that as he matures that he will develop some of his dad’s progressive interests in social issues.
Thanks for enlightening me on the world of Gates.
H. Ross says
I’ll have to add him to my list of the filthy rich who realize that if it wasn’t for the opportunities they have been provided by living in this society, then they wouldn’t be the successes they are. Warren Buffet is another who obviously gets this. Paying taxes helps support the society that gave them those opportunities. Would the Bush’s or any of their cronies be as successful in Sudan, Afghanistan, Nicaragua, etc.?
Richard Silverstein says
Heather: That’s dead on correct. I think we should also add Paul Newman to the list as he’s signed on w. Buffet & Gates to support the estate tax. I discovered Responsible Wealth, a site started by a scion of the Mayer family (as in Oscar Mayer wiener) & devoted to joining together ‘traitors to their class’ who promote greater economic opportunity for the less privileged and an equitable tax and inhertance system in this country.
Jason Truesdell says
“Would the Bush’s or any of their cronies be as successful in Sudan, Afghanistan, Nicaragua, etc.? ” This is a big part of Gates II’s ideology. He has said something along the lines that it’s not just the common defense, but the integrity and relative stability of our social structure that enables opportunity for both the wealthy and the not-so.
The libertarian and big business wings of the Republican party don’t recognize, or don’t value, government’s contribution to a foundation of stability and wealth that makes it possible to be super-rich.
It seems to me the wealthy have two schools of thought:
1) If you want more of the pie for yourself, make a bigger pie.
2) If you want more of the pie for yourself, don’t give any of your pie away.
For me, it’s far easier to be sympathetic to the first way of thinking.
In my own tiny, struggling business, I’ve found the only way I have a prayer of survival is by partnering with other companies and organizations with compatible goals. Cooperation, even with potential competitors, makes both of us stronger. Similarly, I think that big business can ensure its survival is by cooperating with the social structure, rather than antagonizing it.
Tom Robbins wrote a novel set in the early 80s in downtown Seattle which was not one of his best works, but referenced the Reagan revolution that defunded public mental health facilities, and turned a bunch of schizophrenics and drug addicts loose on the streets. It made downtown dangerous, or at least frightening, especially for women walking alone at night, in a city which had a long mellow history. It might have made some defense contractors wealthier, by making the money available for the ever-growing 80s “defense” budgets, but it didn’t help the employees of downtown Seattle businesses, and quality of life suffered. When such “values” are driving public policy, wealth can certainly become concentrated in the hands of those who are already secure, but it is surely not conducive to broader growth, except in very short-term ways.
Richard Silverstein says
Jason: I’m most interested in the business model/philosophy you try to use in running your company. I used to be a non-profit fundraiser (worked at the UW) and this field can be fiercely turf-bound. I always believed that we could do the best for our donors AND the organization by sharing information & working together as much as possible. But sometimes this philosophy was preached but not observed.
I’d like to think this approach would work in business as well. In most business fields there are more than enough customers to go around. If you do your business model well you’ll find them and they’ll find you. And you & your competitors should be able to co-exist nicely.
To tell the truth, I was always offended by Bill Gates “take no prisoner” attitude toward MS’ rivals. I’m all for competitiveness, excellence & business success. But hasn’t there always since the very beginning of the high tech industry been more than enough potential business for almost everyone to succeed if their products were good? So why does he feel the need to be king of the mountain/lord of all he surveys? Similarly to what you say above, he could’ve made friends and influenced people much more effectively by honoring your philosophy. Admittedly, MS is a huge business compared to anything you or I might run ourselves. But I’d venture to say that even when MS was a startup the attitude toward competitors was pretty fierce. There is a duality in the high tech/web world in which some wish to conquer the world with an idea & own it & manipulate it to their own advantage; & others wish to ‘share the wealth’ and raise everyone’s boats. I know which side I prefer.
why do people always have to have a go at the Gates’ family. just because you cant be them and never will be admired or be as wealthy as them. Bill Gates (the son) is an incredible man who was given a vision. if it wasn’t for him, life would so hard for the rest of the wolrd. how eva, instead of thanking this man and honouring him and respecting him the way we should, the world uses Bill’s tool to pull him down. People constantly use computers to produce negative data about this man and his family. he neva did anything to hurt anyone. he has beifited the wolrd and yet people constantly harras him and call him a nerd. he is no nerd. he’s an extreamly intelligent man and we should all look up to him and admire him instead of getting jealouse and pulling him down the way we all do. so what if he has a big house. he didn’t just win the money in the lottery. he worked really hard for what he’s created. he’s a loving caring father who’s compassion extends out to the less fortunate who r also forgotten by the rest of us. Bill Gates deserves what he has and him and his family deserve a little more respect from all the rest of us.
Richard Silverstein says
Bethany, it sounds like you’ve been on another planet as far as your comment’s relevance to this discussion. The post doesn’t refer to Bill Gates Jr. but rather to his father. There is nothing negative about the son or Microsoft. I’m not sure where you’re coming from unless you’re just writing a general love letter to Bill.
This blog is not a Bill Gates Jr./Microsoft fan site. I’m pretty critical of MS in other posts in this blog. I once had a very negative opinion of Bill Gates & feel his philosophical decisions about competition & other critcial matters were supremely wrong. But I must say that his work with his foundation has turned around some of that former criticism. I wish him much success in this effort.