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Bill Gates Sr. Makes the Case for Preserving the Estate Tax
- January 17th, 2003
In a half-hour-long appearance on the Leonard Lopate Show (WNYC-New York), Bill Gates Sr. and Chuck Collins discussed why it is crucial that our nation preserve the estate tax and why those favoring repeal'”who they said are really a handful of extremely wealthy families--have been so effective in getting their message across. Gates and Collins are the authors of a new book that they hope will help counter that message, Wealth and Our Commonwealth: Why America Should Tax Accumulated Fortunes (Beacon Press), featuring a foreword by former Fed Chairman Paul Volcker.
Repealing the estate tax is at the top of the Bush Administration's legislative agenda. But Gates and Collins point out that the federal estate tax, which was instituted in 1916, now applies only to estates of more than $1 million, or less than 2 percent of all estates. Moreover, the threshold will rise to $3.5 million over next six years, meaning that even fewer estates will be affected. The estate tax generated about $30 billion last year, and most of these revenues came from estates valued at more than $20 million.
Gates and Collins say that the push to eliminate the estate tax began a decade ago when a group of wealthy families got together to fund a campaign. They say this group has been highly successful in convincing the public that the tax harms small farmers and small businesses. However, says Gates, 'they've been unable to produce a case where its been necessary for a farm to be sold in order to pay the estate tax.'
'The proponents of repeal have figured out a way to frame the issue to seem like it has mass appeal,' says Collins, who is cofounder and program director of the Boston-based United for a Fair Economy and Responsible Wealth. In reality, Collins says, wealthy supporters of repeal are 'deflecting the debate from who really pays estate taxes.'
Gates and Collins say that the estate tax will grow in importance because of the tremendous intergenerational wealth transfer that will take place over the next few decades. States and the federal government, both now facing budget deficits, will be deprived of much-needed revenue to create a society in which all can have the opportunity to succeed.
'I think there's going to be a moment when we say, ''Do you want to cut your daughter's education or do you want to repeal the estate tax?''' says Collins.
To listen to Gates and Collins discuss the estate tax with host Leonard Lopate, click here and scroll down to the show (requires Real Player).
For more on the book Wealth and Our Commonwealth click here.
For more on estate taxation, click here.
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