Shame! Tax breaks for millionaires in a war
By Chuck Collins

Was there ever a time when congressional tax cuts for multi-millionaires were more unseemly?

Recently, President George W. Bush spoke about the war in Iraq on national TV, asking Americas to be patient and to bear in silence the heavy sacrifice of American soldiers' lost lives. That number is getting close to 2,000.

Meanwhile, almost 60 percent of Americans disapprove of the way Mr. Bush has handled the war.

Indeed in 2001, when terrorism czar Richard Clark was trying to get high-ranking Bush administrators to meet about the al-Qaida threat, the administration was mounting a campaign to pass tax cuts for multi-millionaires. In June of that year, it succeeded in achieving cuts of $1.35 trillion over 10 years. The major beneficiaries has the highest incomes in the land.

In 2003, as our troops were marching on Baghdad, Mr. Bush and Congress were pushing for $330 billion in additional tax cuts, 57 percent of which went to households with incomes of over $337,000.

Last summer, as the death toll for American troops was passing 1,000, the administration was fighting hard to give corporate donors an additional $140 billion in tax breaks.

Now, the Senate is preparing to vote on repealing the estate tax, a tax that is only paid by multi-millionaires and billionaires, fewer than 1.5 percent of all estates each year.

If there ever was a time to limit tax breaks for multi-millionaires, this should be it. The cost of our military involvements is growing, and we need to make additional investments to protect homeland security. Meanwhile, our budget surplus has disappeared, shifting from a 2001 es-timate of $5.6 trillion in the black to $5.2 trillion in the red today.

Mr. Bush has asked for and gotten close to $200 billion in emergency war funds, and it is rumored he will ask for more. Where is this money to come from?

None of this shortfall has deterred Congress from its relentless march to repeal the estate tax this year. Repeal would cost almost $1 trillion over two decades. Giving such a tax break to wealthy heirs would only shift the burden of paying for security onto the rest of us.

It is unprecedented in U.S. history to push for tax cuts to the wealthy in time of war. For over 200 years, estate and inheritance taxation has been linked with military mobilizations. The first federal tax on wealth was levied in 1797, as our country faced the escalating costs of re-sponding to French attacks on American shipping.

During the 19th century, income and estate taxes were imposed during the revenue emergencies of the Civil War and the Spanish-American War. Wartime taxation was viewed as fair at a time when many citizens were sacrific-ing their lives.

The 1916 passage of the estate tax was a fundamentally American response to the inequalities of the Gilded Age, as well as the U.S. entry into World War I. Even after the war, businessman Harlan E. Read argued in "The Abolition of Inheritance" that war debts should be paid with heavy taxes on inherited wealth.

To pay for World War II, the estate tax was increased so that fortunes exceeding $50 million would be taxed at 70 percent. President Franklin D. Roosevelt spoke out boldly against war profiteering, saying, "I don't want to see a sin-gle war millionaire created in the United States as a result of this world disaster."

Today, the lives of U.S. citizens are again at risk as they face prolonged service in Iraq. Others are feeling the pain of recession, losing jobs, savings and security. State and local governments, facing the worst budget cuts since World War II, have gutted crucial community services.

Rather than facing these problems and appropriating the money to resolve them, congressional leaders are us-ing the fog of war to pass another tax cut for the wealthy that would exacerbate long-term budget shortfalls at all levels. While the public's attention is riveted on the war in Iraq, Congress shirks its duty to find money to pay for it, and instead moves to repeal the estate tax, our most progressive tax.

There is only one word for advocating such an inequality of sacrifice: Shame!

Chuck Collins (ccollins@faireconomy.org), co-author with Bill Gates, Sr. of "Wealth and Our Commonwealth: Why America Should Tax Accumulated Fortunes," is senior fel-low at United for a Fair Economy. http://www.FairEconomy.Org -- United for a Fair Economy is an independent national organization that raises awareness of the damaging con-sequences of concentrated wealth and power.

Congress will soon decide. Will we live in a 'democracy' or oligarchy? This was an issue the 'founding father' dealt with in forming the foundation of the United States of America. Actually the thirteen colonies. Despite the hell, the 'founding fathers' caused to African peoples in their daily serving of inequality, unjustified murders, whippings, rapes etc, they personally knew what they left behind at their fatherland of Europe was even worst than what they perceived what their slaves felt, part of a complete and utter living hell on Earth. Oligarchy is and was standard in Europe. Every movement for group freedom was repressed and dealt with horrificly. So the 'founding fathers' decided to fight a battle of principal and drafted the Constitution and Bill of Rights that represent the guideline to run a new nation. However being on the top, the 'founding father' did indulge in similar behavior as their European oppressors towards all and especially captured African. This initial seed pass down from generation to generation until we see what we witness today. The tree of repression is about to blossom. We wish to become like our hellish 'fathers' in Europe. History is doom to repeat itself. We constantly always hear Democrats and Republicans and all political parties in action in retorspect ask the question, 'what would the founding fathers think of our nation today?' With this repeal of the estate tax we will be heading in that direction. That is how serious this bill represents. Will America become hell on earth where principle is decided by the ever few? Don't become the oppressor.

Taking Care of Millionaires: ; Estate Tax Repeal Bad for Budget, Nation's Charities

2005-09-20

Charleston Gazette, The

Rick Wilson

There is no better sign of the current political climate than Congress' upcoming agenda, which includes simultaneously slicing billions from poverty programs while giving billions to the wealthiest Americans. A case in point is the repeal of the estate tax about to be taken up in the Senate, which might better be described as the Paris Hilton Tax Giveaway of 2005.

The federal estate tax, established in 1916 after years of struggle, taxes a proportion of great fortunes as these pass from those who built or took them to those who inherit them. About 1 percent of all estates in the United States are subject to the tax. Surviving spouses and charitable donations, which have traditionally received the bulk of wealth from large estates, are exempt from the tax. Virtually all family farms and small businesses are likewise exempt.


Advocates of this tax began from the now radical assumption that the United States was intended to be a democracy rather than an oligarchy ruled by a tiny aristocracy based on inherited wealth.

This sentiment was perhaps best expressed by Louis Brandeis, a U.S. Supreme Court justice between 1916 and 1939, who said: "We can have democracy in this country, or we can have great wealth concentrated in the hands of a few, but we can't have both."

One of the estate tax's early supporters was progressive Republican President Theodore Roosevelt, who in 1906 stated: "The man of great wealth owes a particular obligation to the state because he derives special advantages from the mere existence of government." In other words, the rich benefit more than most citizens from public investments and government protection of wealth and property, and hence have a responsibility to the public.

On the Democratic side, Theodore's distant cousin Franklin Delano Roosevelt noted: "Great accumulations of wealth cannot be justified on the basis of personal and family security. ... Such inherited economic power is as inconsistent with the ideals of this generation as inherited political power was inconsistent with the ideals of the generation which established our government."

Bipartisan support for the estate tax extended beyond the Roosevelt clan. The tax survived the rule of a number of Republican presidents, including Harding, Coolidge, Hoover, Eisenhower, Nixon, Ford, Reagan and the first President Bush.

The current occupant of the White House pushed for drastic cuts and a gradual phase-out of the estate tax in 2001, a move that has had an adverse impact on the federal deficit and on many state budgets. Now, the Senate is poised to consider its total elimination, a move opposed by Federal Reserve Chairman Alan Greenspan.

Estate tax repeal would deprive the country of close to $1 trillion over the next 10 years. This is money that could shore up Social Security or pay for programs such as education, infrastructure, law enforcement, social services, environmental protection and deficit reduction. Again, as Theodore Roosevelt would argue, these are things that directly or indirectly benefit rich folks too, probably more than the rest of us.

There are other consequences as well. In 2003, the Brookings Institution reported that repeal of the estate tax "would reduce charitable bequests by between 22 [percent] and 37 percent, or between $3.6 billion and $6 billion per year." This is expected to lead to similar declines in giving during life. "To put this in perspective, a reduction in annual charitable donations in life and at death of $10 billion due to estate tax repeal implies that each year, the nonprofit sector would lose resources equivalent to the total grants currently made by the largest 110 foundations in the United States."

This means private charities will be even less able to make up the difference from public spending cuts.

One "compromise" proposal put forth by Sen. Jon Kyl, R-Arizona, would avoid total repeal but gives away almost as much - close to 75 percent of the cost of full repeal - to millionaire inheritors.

Responsible Wealth, an organization of affluent Americans concerned about the growing wealth gap, opposes estate tax repeal or its equivalent. Their example of placing the public good over their own private gain is an instance of real patriotism, compared to jingoistic goose-stepping, leader-worshipping and war-profiteering.

Ironically, while we're taking such tender care of millionaire heirs, state Medicaid estate recovery programs confiscate the homes of low-income elderly people who needed long-term care before their deaths. And the more taxes are removed on wealth, the more they will be shifted to the wages of workers or on the purchase of necessities.

Here's hoping that the U.S. Senate does the right thing and votes "no" on repeal or on costly compromises such as Kyl's. If we have to live in an aristocracy, let it be Jefferson's natural aristocracy based on merit and talent, not a hereditary ruling caste of wealth.

Wilson, director of a West Virginia religious social action group, is a Gazette contributing columnist.