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!