Statement of William H. Gates, Sr.
by Guest Blogger, 6/12/2002
On June 12, 2002, Sen. Kent Conrad, William H. Gates, Sr., and Americans for a Fair Estate Tax released the results from a poll conducted in May on views of the estate tax among the American public. William H. Gates, Sr., participating by phone from Seattle, WA, made the following remarks. Statement of William H. Gates, Sr. June 12, 2002 The upcoming vote on the federal estate tax will tell us much about the Senate's ability to maintain fiscal discipline at a time of war and budget deficits. Responsible senators should vote against making repeal of the estate tax permanent. They should open the next year with an honest debate about the dangers of wholesale repeal and the possibilities for meaningful reform. Congress should reject the notion of wholesale repeal in the short term because it is fiscally reckless, and in the long term because we recognize the importance of protecting our democracy from a further buildup of hereditary wealth. The United States also stands to lose one of its most progressive federal taxes. Only estates worth more than $ 1 million (or $ 2 million for couples) are subject to the tax -- and the bulk of it is paid by the fewer than 3,000 estates with assets in excess of $ 5 million. Thanks to the Bush tax cut, between now and 2009 the exemptions will rise to $3.5 million for an individual ($7 million for couples). Republican President Theodore Roosevelt believed that society had a claim on the accumulated fortunes of the very wealthy, thanks to its role in creating those fortunes. In his 1906 State of the Union address, Roosevelt proposed the creation of a federal inheritance tax. He explained: "The man of great wealth owes a peculiar obligation to the State because he derives special advantages from the mere existence of government." Roosevelt further argued in a June 1907 speech, "Most great civilized countries have an income tax and an inheritance tax. In my judgment both should be part of our system of federal taxation." Such taxation, he noted, should "be aimed merely at the inheritance or transmission in their entirety of those fortunes swollen beyond all healthy limits." There is no question that some people accumulate great wealth through hard work, intelligence, creativity, and sacrifice. Individuals do make a difference, and it is important to recognize individual achievement. Yet it is equally important to acknowledge the influence of other factors, such as luck, privilege, the cooperative efforts of others, and society's investment in the creation of individual wealth. It seems to be a major anomaly that as we are discussing the need to increase the federal debt limit, we are still uncertain about how to finance the war on terrorism, nobody has quite figured out how airport security will be paid for, and in the midst of this very severe set of critical demands on the national treasury, we are talking about permanently repealing a very significant tax. It is not punishment to repay your government for having had the benefit of living in this country. We need to reform the federal estate tax; we cannot afford to repeal it permanently. 37 Temple Place, 2nd floor, Boston, MA 02111 (617) 423-2148, fax (617) 423-0191 website www.responsiblewealth.org, e-mail firstname.lastname@example.org