“You’re engaging in class
warfare!” “The rich create economic
growth” “I deserve what I earned” “Why pay a
death tax?”
Who Buys
this Myth: “Inequality Is Good for Us?”
The debate
over the wealth and earnings gap between the richest Americans and the rest of
us is at a new stage. As Ann McFeatters put it in the Post-Gazette, “The biggest debate in Washington…aside
from issues of war and peace(!)…is sure
to be about tax cuts.”
The Wall St. Journal described people earning $12,000 a year who pay ‘only’ 4% income tax as “Lucky Duckies.” Columnists are saying that ordinary workers don’t care if the richest 1% get massive tax cuts, imagining that someday they’ll be rich.
A recent study finds that the poorest 20% of Americans pay 17% of their income in taxes, including state, local, excise, social security, medicare and others. In this study the riches pay 18%
Democrats and the media in the wake of 9/11 failed to question Administration policies or to debate whether a roaring twenties style boom could turn into a whimper. And until Enron and its aftermath CEOs were seen as efficient, omniscient, and deserving of millions.
With Presidential wannabes coming out of the #+bash/liberal/bash#+ closet, with long term unemployment and deficits climbing, and the Administration proposing budgets at less than half the inflation rate for most programs (except military and home security), Citizens Budget Campaign has a real opportunity to step up local organizing for economic justice.
Chuck Collins
in Pittsburgh in March
Citizens Budget Campaign is bringing our old friend, Chuck Collins, to town on March 20 and 21. Chuck is co-director of United for a Fair Economy, www.ufenet.org. CBC and the Living Wage Campaign have used UFE training techniques to dramatize the growing inequality in the U.S. over the past 30 years.
The
publication of his new book, co-authored with Bill Gates, Sr., could not be
more timely. WEALTH AND OUR
COMMONWEALTH: Why America Should Tax
Accumulated Fortunes
looks at America’s founding, based on
the idea of equality and a rejection of hereditary power, both economic and
political. Nevertheless, great
disparities in wealth and power emerged during the Industrial Revolution and
Gilded Age, and the estate tax began to gain support as a means by which to
restore and maintain democratic equality.
In 1916, the estate tax, placed on large amounts of
wealth that are transferred when someone dies, was instituted as part of the
Emergency Revenue Act, but has since undergone several waves of reform. While the estate tax was temporarily
repealed as part of the 2001 tax package, a lively Congressional debate is
currently taking place over whether to make it permanent.
Early promoters of the estate tax believed that
inherited, concentrated wealth was fundamentally at odds with American
democracy, and that wealthy individuals were in part indebted to society for
its role in the creation of their fortunes.
Wealth and Our Commonwealth revives
these arguments, and shows how personal success is bound to societal
investments.
Gates and Collins also dissect the claim that the
“death tax,” as repeal advocates refer to it, penalizes small business owners
and farmers. While pro-repeal
literature tells of families being forced to sell their farms in order to pay
the estate tax, Gates and Collins note that researchers have repeatedly been
unable to find one example of such a case.
Interviews with farmers indicate that “the primary threat to the survival
of genuine family farming is the growing domination of mega-scale
agriculture. Eliminating all estate
taxes would only further concentrate agricultural assets into fewer
hands.” Many of the same lobbyists and
politicians who voice concern for the effects of the estate tax on farmers also
support acts such as the 1996 “Freedom to Farm Bill,” which favored large scale
agribusiness and left smaller family farmers to fail.
As members of a society in which individuals may profit from public support and institutions, Gates and Collins argue that it is a citizen’s duty to give back. The estate tax, they contend, is one way for those most financially able to contribute to society and strengthen the equality of opportunity that forms the nation’s base. The estate tax deduction offered on charitable donations also encourages giving to civic, non-profit, and governmental organizations and programs, which in turn improve the quality of life for all.
From Wealth and Our Commonwealth:
Software designer Martin Rothenberg recounts how he attended good public schools, utilized free public libraries and museums, went to college under the GI Bill, and received government scholarships and grants for graduate study and research – all advantages paid for by others. Now among the less than two percent of Americans subject to the estate tax, he is one of the leaders working for its preservation in New York. “I was able to provide well for my family,” he says, “and, upon my death, I hope taxes on my estate will help fund the kind of programs that benefited me and others from humble backgrounds – a good education, money for research, and targeted investments in poor communities – to help bring opportunity to all Americans.”
Sidebar:
“Enron is a prime example of all the things that were allowed to go
wrong during the stock market mania. This wall got built brick by brick in
broad daylight in the 1990’s by companies doing whatever they had to do to make
their numbers, being willing to sacrifice the long-term well-being of the
company so that the executives could get rich.” --William Fleckenstein,
president of Fleckenstein Capital, a money management firm in Seattle, New
York Times, January 14, 2002
“Bill Gates and Chuck Collins
provide a clear rationale for retaining the
estate tax in this helpful and
unselfish analysis.”
--Jimmy Carter, Former U.S. President and Winner of the 2002 Nobel Peace Prize
“If you
doubt whether there are any truly public spirited Americans left, let me
introduce Bill Gates Sr. and Chuck Collins.
Their new book is worth reading for its fascinating history of the
rightwing estate-tax repeal movement alone.
But more than that, Wealth and Our
Commonwealth challenges us all, rich and not-so-rich, to a more strenuous
and far-sighted notion of citizenship.”
-- Barbara Ehrenreich
Author of Nickel and Dimed: On (Not)
Getting By in America
Wealth and Our Commonwealth:
and
Chuck Collins
Foreword by Paul A. Volcker,