Billionaires For The Death Tax
February 16, 2001
Opponents of federal estate tax repeal have enlisted the aid of some of the wealthiest Americans to plead for retaining the tax, claiming repeal would hurt charitable giving.
But as Paul Gigot points out, that isn't necessarily the case -- or the point of repeal.
- Boston College charity expert Paul Schervish argues in the Chronicle of Philanthropy that giving correlates with gains in wealth, so the less money the government takes the more people will have to give.
- "Doing away with the estate tax would increase not only the amount of giving, but also the quality of giving," writes Schervish.
- Voluntary giving would be "more fully a work of liberty and humanitarian care, and less the windfall fruit of a convoluted tax strategy."
The people hurt by 55 percent death-tax rates are entrepreneurs not rich enough to be the next Rockefellers. Many own businesses they have to break up or sell merely to pay the tax. The point, says Gigot, is that, "It's simply unjust to tax income a third time at death after it's already been taxed as earnings and again as dividends."
Warren Buffett says death taxes have kept America a "meritocracy," but there is no evidence the tax has reduced the concentration of wealth. Families like the Rockefellers and Kennedys don't pay the tax -- they use estate planning to escape almost all of it.
Source: Paul Gigot, "Fat-Cat Cavalry Rides In To Rescue High Taxes," Wall Street Journal, February 16, 2001.
For WSJ text
For Stephen Moore's NCPA estate tax brief analysis
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