Ordinary people may believe that unprecedented global strife is a bad thing. The barons of Big Oil beg to differ.

By Chuck Collins and Eric Benjamin. Posted August 30, 2006 at Alternet.org.

Feeling a little squeeze at the gas pump? You are not alone -- U.S. consumers are expected to pay an additional $200 billion this year for oil and gas products.

These billions, notes Sen. Byron Dorgan, D-N.D., amount to a "massive transfer of wealth from average Americans who can't afford it to big oil companies who already were experiencing all-time record profits."

While ordinary Americans are forking over upwards of $3 for a gallon of gas, 15 distinctly unordinary Americans -- the CEOs of the largest U.S. oil industry companies -- are celebrating their biggest paychecks on record.

According to a new report, "Executive Excess," by the Institute for Policy Studies and United for a Fair Economy (PDF)], Big Oil CEOs last year took home an average $32.7 million in compensation -- 518 times more than average oil industry workers in 2005. The ratio for all industries in 2005 between average and highest paid worker was 411 to one, while the average globally in advanced countries is 25 to one.

The Oil Barons' grab even exceeded their excessively paid counterparts at other leading U.S. firms. Their $32.7 million average pay was almost three times higher than the average bloated paycheck of $11.6 million for CEOs at 350 large corporations surveyed by the Wall Street Journal.

The three highest-paid U.S. oil chieftains in 2005: William Greehey of Valero Energy ($95.2 million), Ray R. Irani of Occidental Petroleum ($84 million), and Lee Raymond, outgoing CEO of ExxonMobil ($69.7 million).

At the end of July, ExxonMobil reported a quarterly profit of $10.36 billion, the second biggest gain ever. This follows its record-breaking annual profit of $36 billion in 2005.

When ExxonMobil's CEO Lee Raymond was called before Congress to explain, he stated that rising prices reflect global supply and demand, nothing more. "We are all," Raymond assured Congress, "in this together, everywhere in the world." Except Raymond. Raymond recently retired from ExxonMobil with a Golden Parachute retirement package worth nearly $400 million, including country club fees and use of the company jet. "He is a porker of the first order," observed executive pay expert Graef Crystal.

ConocoPhilips CEO James Mulva explained to ABC News that oil companies only make ten cents on the gallon. High oil prices, not greed, are the cause of skyrocketing prices at the pump, he explained. Big Oil can't control the global marketplace.

But if Big Oil CEOs have no power to influence the cost of gas, then they don't deserve any special reward for industry profits. And even if their performance contributed to the company's profitability, shouldn't broader criteria be used to judge their performance, including their record on the environment?

With these enormous salaries, Big Oil CEOs should be held to account for their failure to dedicate their mountains of excess cash toward seeking new energy sources that move us beyond fossil fuels. They can run green-looking TV ads claiming they are indeed preparing for the future. But when they throw massive windfall profits at chief executives, they seem to be signaling that the coming lean years will be somebody else's problem.

What is good for ExxonMobil and Lee Raymond -- and all the other titans of the contemporary American oil and gas industry -- has not been good for average Americans. According to new wage data reported in the New York Times, "wages and salaries now make up the lowest share of the nation's gross domestic product since the government began recording the data in 1947, while corporate profits have climbed to their highest share since the 1960's." So what can be done about petrol profiteering?

One proposal is to tax oil industry windfall profits and earmark them for public energy conservation projects and efforts to reduce energy costs for the poor. Sen. Byron Dorgan, D-N.D., has proposed that a 50 percent tax be applied to profits earned by major U.S. oil companies on the sale of crude oil above $40 per barrel.

Another proposal is to eliminate government tax breaks and massive subsidies for big oil. The independent Taxpayers for Common Sense identified 16 wasteful subsidies for the fossil fuel industry totaling $5 billion a year.

Finally, Congress should take up the question of anti-trust laws in the face of oil industry consolidation. Not since the 1911 break-up of Standard Oil Co. has the country witnessed such a concentration of petroleum power, with 23 major mergers in the last decade.

Big Oil's grip on U.S. politics is strong. Since 1990, they've given $192 million to federal candidates and parties. They have blocked sane energy policy and investments that move our country beyond dependency on oil.

That's why a campaign organized by Oil Change International to "separate oil and state," and encourage members of Congress to give up their addiction to Big Oil political contributions is a key leverage point. It's a practical first step in stopping further looting by the pump profiteers.

Chuck Collins is a senior scholar at the Institute for Policy Studies and coauthor of "Economic Apartheid in America: A Primer on Economic Inequality and Insecurity" (New Press, 2005). Eric Benjamin is a research analyst at United for a Fair Economy.

Evidence of Election Fraud Grows in México
As the U.S. media distorts the aftermath of the July 2 election, evidence suggests there may be an attempted theft in progress.

By Chuck Collins and Joshua Holland. Posted August 2, 2006 on Alternet.org.

A month after more than 41 million Mexicans went to the polls to elect their next president, the country is still awaiting a result. A preliminary count of polling station tally sheets put conservative Felipe Calderón of the National Action Party (PAN) ahead with a slight lead over left-populist Andres Manuel López Obrador of the Democratic Revolution Party (PRD). Both candidates have claimed victory, with López Obrador and his supporters holding vigils and protests across the country and calling for a vote-by-vote recount.

That hasn't kept a consensus from emerging in the commercial media that Calderón won by a small margin in a squeaky-clean election. In a hyperbolic editorial on July 30 -- one that bordered on the ridiculous -- the Washington Post accused López Obrador, known as AMLO to his supporters, of taking "a lesson from Joseph Stalin" and launching an "anti-democracy campaign" by demanding a manual recount and urging his supporters to take to the streets in peaceful protests. Calling the vote "a success story and a model for other nations," the editors concluded that it's "difficult to overstate the irresponsibility of Mr. López Obrador's actions."

Days after the election, the New York Times irresponsibly declared candidate Calderón the winner, even though no victor had been declared under Mexican law, and just this week, in an article about López Obrador's protests, the Times reported that López Obrador had "escalated his campaign to undo official results."

But there are no "official" results and probably won't be until after Sept. 1. Under Mexican law, the Federal Electoral Institute (IFE) is charged with running the elections and counting the vote. But only the country's Election Tribunal, known by its Mexican nickname as the "TRIFE," has the power to declare a victor (See here for background on the TRIFE). They have until Sept. 6 to rule on the election.

It appears that the U.S. media has become so enamored with the construct of the "anti-democratic" left in Latin America -- the ubiquitous "fiery populists" (a term that has described everyone from the centrist Lula da Silva to Hugo Chávez) -- that they are incapable of fulfilling their basic mandate to inform their readers when it comes to the political landscape south of the border. It's nothing short of journalistic malpractice.

But back in the real world, a growing body of credible evidence from mainstream Mexican journalists, independent election observers and respected scholars indicates that an attempt was made to deliver the presidency to Calderón. It includes a pattern of irregularities at the polls, interference by the ruling party and some very suspicious statistical patterns in the "official" results.

The TRIFE is now sifting through 900 pages of formal complaints lodged by López Obrador. Their ruling on those challenges will indicate how well México's electoral process holds up in a closely fought and highly polarized race.

Growing evidence of irregularities and fraud

México has a history of the party in power's using its clout to tip the election in its favor, and strict laws prohibiting ruling party interference were enacted in the 1990s. Election law prevented Vicente Fox, the outgoing PAN president, from making public statements of a partisan or political nature. But he overstepped this line many times in the 2006 campaign, including dozens of speeches reinforcing candidate Felipe Calderón's basic message that López Obrador was a "danger to México." In a well-publicized speech, candidate López Obrador responded, "With all respect, Mr. President, shut up. You sound like a chattering bird." Fox continued with these speeches until election authorities and public commentators warned Fox he was violating election laws.

The Fox administration also ran public service announcements touting government programs and services and promoting the vote. PAN saturated the television airwaves with "swift-boat" style attack ads against López Obrador, comparing him to Venezuela's Hugo Chávez and calling him a "danger to México." Election authorities eventually ordered these commercials off the air on the grounds that they were untrue and maligned the candidate's character, but critics believe they moved too slowly.

Under Mexican law, ruling party interference is a serious charge and grounds for annulling an election. In the last ten years, the same Electoral Tribunal judges that are reviewing AMLO's complaints annulled governors' races in Tabasco and Colima, based on ruling party interference. The Institutional Revolution Party (PRI), which ruled México for seven decades before the system was reformed in the 1990s, made vote buying and voter coercion into a high art form, and there is strong evidence that they were up to their old tricks in the 2006 election. With PRI governors in 17 of México's 31 states, election observers documented a significant number of examples of voters being offered money or receiving food or building materials in exchange for their PRI vote. In a country where half the citizens live in poverty and rely on different forms of government assistance, voters are often told that their public assistance is dependent on voting for the party in power. There are examples of PAN using similar practices, especially a well-documented case of funds diverted from a San Luis Potosi building program into PAN electoral races.

The Mexican electoral system has come a long way in two decades in implementing anti-fraud systems. But there are still several ways that results can be tampered with on election day. López Obrador's campaign and hundreds of independent election observers documented several hundred cases of "old fashioned" election-day fraud in making their case for a recount.

Here's how the system was supposed to work. On July 2, Mexicans voted at over 130,000 different polling stations, casting separate ballots for president, senator and federal deputy. Each political party was encouraged to have registered poll watchers at every polling station to observe the voting process and count at the end of the day. As international and Mexican election observers noted, however, problems emerged when there weren't enough independent and party observers to go around. In regions where one party was dominant, this created opportunities for vote shaving, ballot stuffing, lost ballots and other forms of fraud.

The PRD's strongest case for a recount comes from the fact that ballots in almost one-third of the country were not counted in the presence of independent observers. One analysis of IFE results found that there were 2,366 polling places where only a PAN observer was present. In these districts, Calderón beat López Obrador by a whopping 71-21 margin.

Other elements of PRD's legal challenge include documentation of several ballot boxes found in dumps in the PRD stronghold of México City. They also point to evidence such as the nonpartisan Civic Alliance's report documenting 17 polling sites in PAN-dominated Nuevo León, Michoacan and Querétaro, where the number of votes cast vastly exceeded the number of registered voters at a site.

Reports by international and domestic election observers affiliated with the Civic Alliance and Global Exchange stop short of claiming fraud in the elections. They laud the dedication of most poll workers they monitored and the preparations for the vote in most of the polling places, as well as the orderly and peaceful process overall. But the cumulative evidence is damning in such a closely contested race.

In the weeks after the election, PRD observers again sounded the alarm as sealed ballot packets were being illegally opened at IFE district offices in several PAN-dominated regions. PRD officials accused IFE officials of possibly tampering with ballots or attempting to cover up fraud in the event of a recount. The TRIFE ordered these offices to stop opening vote packets.

While the López Obrador campaign has not made major charges of "cyber fraud," there is an emerging controversy over the IFE's role in reporting who was ahead in the vote count. For the 2006 election, the IFE had developed a sophisticated system to provide preliminary results called the PREP. Relying on results being phoned in from a sample of precincts, the IFE could compile a credible picture of the vote. If the PREP showed one candidate with a clear majority, the system would have allowed Mexicans to go to sleep on election night knowing who their next president would be. But because of the razor close results, the PREP proved to be an inadequate measure.

Now research is emerging to suggest that the PREP results were cooked to create the appearance of a Calderón victory. Physicist Jorge López at the University of Texas, El Paso, conducted a statistical analysis of the PREP results and found that, as the results came in, the differential between the candidates' totals remained almost constant. One would expect that, as results from each party's geographic strongholds were counted, the gap between their totals would rise and would fall. In such a tight election, one would even expect the lead to change back and forth as the count progressed. None of that happened. The results of a third candidate, Roberto Madrazo of the Institutional Revolutionary Party (PRI), fluctuated as expected.

He also noted that there was very little deviation between the actual results as they came in and the average results; in a normal, natural distribution, one would expect significant differences between the two (it should look something like a squashed bell-shaped curve). Dr. López concluded the pattern was "a clear indication that the data was manufactured by an algorithm and does not stand a chance at passing as data originated at the actual voting."

Luis Mochan, a physicist at the Universidad Nacional Autónoma de México, did similar work. He noted that the PREP data was posted after the first 10,000 reports had been processed, and looked at whether those first 10,000 reports were consistent with the statistical trends for the rest of the day. When he plotted the data backwards, Calderón's vote total originated at zero, as is normal, but López Obrador began the day 126,000 votes in the hole.

Mochan and López both point out that the Calderón began the day building a large percentage lead -- seven points -- that decreased steadily throughout the day. The large early lead would have been handy from a psychological and political perspective, allowing Calderón to claim that he led all day long, but the results had to end in a close result given that polls conducted a week before the tally showed a statistical dead heat.

Mochan also notes gross discrepancies in the number of votes processed late in the evening: "At the end of the plot, we find intervals with more than 1,200 votes per [voting] booth. I understand that no booth was to receive more than 750 votes. Even more worrisome, some data points indicate a negative number of votes per booth."

Mochan notes that these statistical anomalies aren't definitive proof of anything. But economist James Galbraith, reviewing Mochan's data, speculated about a likely scenario that would fit the discrepancies seen that night:

Felipe Calderón started the night with an advantage in total votes, a gift from the authorities.
As the count progressed, this advantage was maintained by misreporting of the actual results. This enabled Calderón to claim that he had led through the entire process -- an argument greatly repeated but spurious in any case because it is only the final count that matters.
Toward the end of the count, further adjustments were made to support the appearance of a victory by Calderón.
Critics suggest that the IFE may have aggressively pushed to swiftly declare Calderón a victor, obviating the need for a poll-by-poll vote recount.

The U.S. media was also confused on the Wednesday after the vote when the IFE ordered all 300 district offices to review the tally sheets. It was widely reported as a "recount," when in fact very few ballots were actually counted. In some cases, such as when a tally sheet was illegible, the sealed ballot packets where opened and recounted. Almost every time that occurred, observers encountered significant errors in the vote count. In the state of México, one tally sheet recorded 88 votes for López Obrador when the recount of ballots found 188 votes. Whether it was human error or intentional vote shaving, in a tight election race, these examples gain heightened significance.

None of these reports in and of themselves constitute a smoking gun. But the questions they raise need to be answered. There is far more evidence pointing to fraud in the Mexican elections in 2006 than was made publicly available about Ukraine's contested vote in 2004. Comparing the media and political establishment's reactions to the two reveals the transparent dishonesty in backing Calderón's claim of victory; in 2004 many of the same voices that are now calling López Obrador "undemocratic" were screaming that the Ukrainian tally had to be annulled and only a new election would assure democracy in the former Soviet satellite. In both instances, the candidate who declared victory was friendly towards a powerful neighboring state; in 2004 that state was Russia, and two years later it's the United States. Forget about threatening México's fragile democratic institutions -- that makes all the difference to the editorial boards of the New York Times and the Washington Post.

According to the Mexican daily La Jornada, over two million supporters of López Obrador gathered in México City on Sunday, July 30, the largest public demonstration in México's history. Millions of voices chanted "vote by vote, poll by poll," calling on the Electoral Tribunal to order a recount. A poll released this week found that Mexicans, by a 20-point margin (48-28), want a vote-by-vote count. López Obrador has said he will call off protests when the Tribunal agrees to a recount and will honor its final decision.

As for the charge in the U.S. media that López Obrador is undermining democracy and the rule of law by calling on his supporters to protest, we believe that the rights of peaceful assembly and free speech are important democratic tenets. Public protests have played a historic part in México's three decade-long transition to democracy.

President and PAN leader Vicente Fox called for direct action when he believed he was victimized by electoral fraud in his race for the governorship of Guanajuato in 1991. Fox called on thousands of supporters to take to the streets and block highways, and the results were eventually overturned. Asked before the 2000 presidential election if he would do the same thing if he suspected fraud, he didn't hesitate to say "we will be very alert to any irregularities, and we will submit the appropriate legal accusations that are necessary. If there is any instability [as a result of those accusations], it will be due to whatever they have done fraudulently to avoid recognizing our victory."

While Calderón has opposed a ballot-by-ballot recount, even some of his staunchest supporters have argued that the process would assure Mexicans' faith in their electoral authorities and strengthen the country's young democracy. In a race where over 64 percent of Mexicans voted against him, Calderón, if he should prove victorious, will need all the legitimacy he can muster.

As México awaits the rulings of the electoral tribunal, tensions are high. The campaign -- often dirty -- and the close results have polarized the country. Given the context, the U.S. media's water-carrying for Calderón's campaign is anything but helpful. The fact that there have been no "official" results is not open to dispute, and until AMLO's allegations have been investigated, there is no way that anyone can say who will come out ahead.

Chuck Collins is the co-author of "Economic Apartheid in America: A Primer on Economic Inequality and Insecurity" (New Press). He is a senior scholar at the Institute for Policy Studies and lives in Oaxaca, México. Joshua Holland is an AlterNet staff writer.

U.S. Media Should Butt Out of Mexico's Election
With 2.5 million votes still to be counted, American news outlets have already declared victory for Mexico's conservative presidential candidate.

Posted July 5, 2006 on Alternet.org.

On a morning interview I did on Texas statewide commercial radio, the host started the program by saying: "In a cliffhanger election, the conservative candidate Felipe Calderon has beaten the left-wing firebrand Lopez Obrador by 1 percent. But Lopez Obrador is demanding a recount and threatening street protests."

Later, CBS Radio called to set up an interview to discuss the "Calderon victory and Lopez Obrador's street protests."

Whoa. Time out! Before we allow Rupert Murdoch to call the Mexican election, let's cover the basics here:

Mexico's election is indeed a cliff-hanger, but there are no official results. Mexico's Federal Election Institute (IFE) has indicated that its preliminary computer tallies, which gave Calderon a 1 percent lead, were insufficient. On Tuesday, it admitted that 2.58 million additional ballots still need to be counted. So let's repeat: There are no official results or official count estimates.

The Federal Election Institute (IFE) had hoped to announce the winner on Sunday night using a sophisticated system of sampling from around the country, known in Mexico as "PREP." This system of compiling and releasing preliminary, unofficial election results has come under fire for causing confusion and potential unrest.

Jonathan Roeder reported Wednesday in Mexico's daily El Universal that "despite repeated reminders that PREP results are unofficial, Calderon has claimed they show he is the clear winner and that Lopez Obrador should step aside, while Lopez Obrador has highlighted the system's inaccuracies to suggest the contest was rigged against him."

Lopez Obrador has not yet suggested there is fraud, but expressed concern about uncounted ballots from 16,000 polling areas that were not included in the PREP calculations. The head of the IFE, Luis Ugalde, confirmed that 2.58 million votes were set aside because of "irregularities or inconsistencies" in addition to an estimated 1.5 million uncounted ballots.

Here's how things were supposed to work: First, on Sunday, after polls closed at 6:00 p.m., ballots would be counted on location.

I witnessed this remarkable event in the city of Miahautlan, Oaxaca, as election officials opened up ballot boxes on the city's central plaza. After separating the ballots into piles for each candidate, election observers from each party and election officials counted the ballots together, out loud. Visualize 20 voices together saying "Treinta y cinco, treinta y seis." Unfortunately, such transparency still doesn't exist in every town in Mexico, especially in regions controlled by the Institutional Revolutionary Party (PRI), which governed Mexico for 71 years prior to the 2000 election.

Second, the count from each polling area was put onto a tally sheet that all witnesses signed. IFE staffers in a sample of polling areas called their results into IFE headquarters for the PREP, a scientific sampling could have declared a possible winner. The IFE never released the results of their "quick count" because it was too close to call.

Third, the ballots were bundled and sealed in special packets and transported, usually under armed guard, to one of 300 IFE district offices. At this moment, that is where the sealed ballot packets are.

Over the ensuing hours, more tally sheets were reported into the central IFE office. But by 11 p.m. Sunday, the election was still too close to call using the PREP system. Both leading candidates, with their own exit polls and results called in by election workers, had numbers showing their lead.

The process of counting ballots begins today, Wednesday, at the local district offices. The winner, according to IFE officials, could be announced before Sunday. But the process could require more time, depending on the number of ballots counted by hand.

Regional officials will first review tally sheets, computer results and polling data from over 130,000 polling areas. If there are formal complaints about specific areas, they will open sealed ballot packets and do hand counts. The good news is Mexico's next president won't take office until Dec. 1, and the IFE is not required to legally certify the election until Sept. 6. Everyone is counseling calm.

The U.S. media, however, have seized upon the Calderon 1 percent lead number and begun coronation proceedings. They've implied that it's all over, except "firebrand" Lopez Obrador and his street mobs won't concede. This is highly irresponsible.

The U.S. media should butt out of the Mexican election until it can get its facts straight on the actual process and the historical context of Mexico's evolving democracy.

Lopez Obrador has said he will honor the results of a fair election. He has a right to demand the IFE conduct a formal count -- and he has the right to freedom of expression, including protest, if he believes he has been defrauded of the presidency. He is no stranger to being defrauded, including having his 1994 victory stolen in the Tabasco state governor's race. (AlterNet has also posted a bit of the history of Lopez Obrador's experience with stolen elections.)

The Mexican election system has come a long way in two decades. Mexico's systems for tracking votes and thwarting fraud are now more sophisticated that the U.S. system. The system is far from perfect but includes many features the United States would benefit from, such as voter registration cards and voter lists with photos.

In the coming days, a number of election observer groups will be issuing reports on the conduct of the election. This will greatly inform the legitimacy of the voting process. In the meantime, the U.S. media should not impose our U.S. model of media-called elections on our southern neighbor.

Chuck Collins is a senior scholar at the Institute for Policy Studies. He lives in Oaxaca, Mexico.

Mexican Election in Limbo
In an emotional election too close to call, the two leading candidates are each declaring confidence in their victory.

Posted July 3, 2006 on Alternet.org.

Election Day started across Mexico on Sunday with thousands of poll workers assembling cardboard ballot boxes at over 130,489 polling stations. But the day ended in uncertainty, as the head of Mexico's Federal Election Institute, Luis Ugalde, went on national television to declare that the presidency was too close to call.

President Fox joined Ugalde in calling on all candidates to patiently await the official vote count, which they expect to have by Wednesday.

The scenario of a razor-close election is everybody's nightmare. Each campaign had hoped for a decisive victory by Sunday night so that voting irregularities and scattered examples of voter coercion wouldn't become the focus of voting results. One thing is for certain: Roberto Madrazo, the candidate of the Institutional Revolutionary Part (PRI), which ruled Mexico for 71 years until the 2000 election of Vicente Fox, is in third place.

The next president of Mexico will either be Felipe Calderon, candidate of the conservative National Action Party (PAN) or Andres Manuel Lopez Obrador, of the leftist Democratic Revolutionary Party (PRD). Both candidates addressed rallies shortly after the electoral commission, each declaring confidence in their victory.

Tens of thousands of supporters of Lopez Obrador gathered in a chilly rain on the central plaza in Mexico City. "According to our information, we have won the presidency," Lopez Obrador declared to his supporters. "Smile," he concluded, paraphrasing his campaign bumpersticker. "We have already won."

The New York Times reported today that there is an "electoral crisis" in Mexico and rising anxiety, especially if Lopez Obrador and his followers believe they lose the election because of fraud. The Times called Lopez Obrador a "firebrand leftist" and repeated candidate Calderon's characterization of his opponent as having an "authoritarian streak."

Lopez Obrador has said he will honor the results of a fair election, even if he loses by one vote. But if history is any lesson, Lopez Obrador is no Al Gore. He won't walk away from a stolen election without a protest. His political rise has been characterized by having to respond to dirty tricks. And if anyone is justified in being a "firebrand" about stolen elections, it is Andres Manuel Lopez Obrador.

A mysterious crash

In 1988, Lopez Obrador was a leading organizer in the presidential campaign of leftist candidate Cuauhtemoc Cardenas. Early on election night, Mexico's own electoral system showed Cardenas with a substantial lead over PRI candidate Carlos Salinas. Then there was a mysterious computer crash, and the country woke up the next morning to an announcement that Salinas was the victor. Lopez Obrador led a voter rights movement in protest, with marches, sit-ins, civil disobedience and road blockades in his home state of Tabasco. He persisted in his protests, and in 1991 led a voter rights protest march from Tabasco to Mexico City.

In 1994, Lopez Obrador was inspired by the Cardenas campaign to run for governor of oil-rich coastal Tabasco, where he had grown up as the son of a shopkeeper. His opponent was none other than Roberto Madrazo, whom he is now facing in this presidential bid. Madrazo claimed victory in an election characterized by widespread fraud, including crude examples of PRI vote-buying.

Lopez Obrador's followers occupied the governor's mansion, and once again Lopez Obrador took to the streets, again leading a march to Mexico City to have the election annulled. President Ernesto Zedillo, who had just been elected president on a pledge of electoral reform, was embarrassed by his fellow party member Madrazo's fraud. He tried to intervene by offering Madrazo a cushy federal job, clearing the way for Lopez Obrador to assume the governorship. Madrazo rebuffed him, and protests continued for years.

In April 2005, the other major parties, PAN and PRI, conspired to knock Lopez Obrador off the presidential ballot, charging that as mayor of Mexico City he had ignored a court order. Only after millions of Mexicans took to the streets did President Fox's prosecutors back down and drop the charges.

A clean vote?

In the coming days, hundreds of civil society organizations and independent vote-monitoring organizations will issue their reports about the cleanliness of the voting process and election. These will influence the emotional climate into which the election results will be announced. But the Mexican electoral system has come a long way since 1988 and even 2000. The independent Federal Election Institute is well-resourced and politically independent, and by all accounts ran a fairly clean election.

While the situation could appropriately be characterized as an electoral crisis, there are several positive signs. For two presidential elections, the people of Mexico have rejected the PRI, a party that still holds 17 of the country's 31 governorships and has a powerful infrastructure of supporters in every region of the country. And the fact that there is a close election, the closest in this country's history, reflects progress in Mexico's transition to democracy. If there are protests in the coming days, it's because Mexicans demand nothing less than a fair election.

Battling the PRI machine

In the rural hamlet of San Pedro Mixtepec, located in the southern state of Oaxaca, several men swept the central plaza to tidy up for Election Day. Four women in traditional Zapotec shawls, one with a sleeping baby on her back, unpacked voting supplies sent by federal authorities.

Election observer and voting rights activist Crispin Fabian votes in his hometown of San Pedro Mixtepec. Photo by Chuck Collins.
"This is new for us," said Xichel Vasquez, speaking Spanish as her second language after Zapotec. "Little by little, we are protecting our right to a fair election." They were anticipating a large turnout from the village's 600 eligible voters. The polls opened a half hour late, with a ringing of the church bells and an announcement made on the village's public address system.

"Our region has voted PRI because there was no alternative, and when there was a choice, they stole the election," said Crispin Fabian who grew up in San Pedro and has watched the impact of local PRI government corruption. "If our village didn't vote PRI, we wouldn't get our road fixed."

Fabian now lives in Oaxaca City, but he was back in his village to vote, visit his parents and work as nonpartisan election observer with the Oaxaca Citizen Forum, a civic group that trained 163 election observers around the state. "Many of the safeguards set up here are the result of tricks the PRI used to win elections," said Fabian. Many people voted twice and there were PRI officials standing around making sure they voted the right way."

At the beginning of the day, election observers and official party representatives inspected the ballot boxes to ensure they were empty. The ballot boxes are literally transparent, with plastic windows. "In the old days, the ballot boxes would begin the day already pregnant with ballots for the PRI," observed Fabian.

An unauthorized PRI activist takes names of voters. Election observers saw him tell illiterate voters to 'mark red,' the colors of the PRI. Photo by Chuck Collins.
Each voter presented a photo identification, which was matched to a voter list with a copy of the ID. "After someone votes, they get their card stamped and a indelible ink stamp on their finger," said Fabian, holding up his purple thumb.

There are some tricks, however, that are hard to prevent. After interviewing dozens of people in the village, including several on video, Fabian had disturbing news. "The PRI people were here yesterday," he said with disgust in his voice. "They were offering 100 pesos to people for a vote for PRI."

A shocking situation

Down the road, in the village of San Agustin Mixtepec, election observers found an even more shocking situation. There was a long line of voters and several PRI officials without credentials standing by the voting booth talking to voters and writing down their names. "There are no representatives of other parties here," said Adelaide Chen, a labor organizer from Los Angeles and an official election observer affiliated with the U.S-based Global Exchange. "There is clear evidence of coercion," she said, pointing to three PRI officials sitting in chairs watching the voters, mostly women in traditional dress. Chen and another Global Exchange election observer, Sue Severin, spent the rest of the day at the polling area to document abuses. Global Exchange will issue a report on Wednesday.

Representatives of the Federal Election Committee and election observers count ballots in Central Plaza, Miahuatlan, Oaxaca. Photo by Chuck Collins.
This reporter photographed and filmed PRI leaders showing voters where to mark ballots and writing their names on an informal list. "The poll workers are inexperienced," observed Fabian. "In a small village, it is hard to stand up to the local PRI politicians. They control the food subsidies, jobs and health programs."

After 6 p.m., the polls closed. In the regional city of Miahuatlan, the vote was counted on the main plaza with hundreds of onlookers. Gathered around a small wooden table, representatives of the Federal Election Institute and political parties counted the votes together out loud. In a region where the PRI has dominated, the results were surprising.

PRI candidate Roberto Madrazo only received 173 votes. The conservative PAN party of Felipe Calderon is not strong in Oaxaca, but he still beat Madrazo with 193 votes. The PRD candidate Lopez Obrador garnered a whopping 501 votes.

"Here in the city, the vote is more transparent," observed Fabian after a long day of visiting polls in seven villages. "The problem with the PRI is the rural villages. But we're making progress."

Chuck Collins is a senior scholar at the Institute for Policy Studies. He lives in Oaxaca, Mexico.

A Rising Tide in Mexico
The next president of Mexico could be a left populist who puts the needs of ordinary Mexicans ahead of international corporate investors -- if the U.S. refrains from meddling.

Posted April 13, 2006 on Alternet.org.

In the southern state of Oaxaca, Andres Manuel Lopez Obrador, or "AMLO," as he is affectionately known across Mexico, is approaching the podium to speak to 13,000 supporters. But first, he must be cleansed. A short medicine woman, wearing the traditional dress of the Mixtec Indians, swats him with green branches and perfumes him with copal incense. Lopez Obrador stands respectfully still with his eyes closed while assembled crowds howl with delight.

The Mexican presidential election is in full swing, and Lopez Obrador is one of three major candidates running for the office. Barring the possibility of massive electoral fraud, external meddling or assassination, AMLO will likely become the next president of Mexico.

But these are not unthinkable "what ifs." In 1988, by all accounts, massive fraud denied candidate Cuauhtemoc Cardenas the presidency. And in 1994, the popular leading candidate Luis Donaldo Colosio was gunned down in the streets of Tijuana in a murder that has never been solved.

Mexicans are all too aware of the seamy history of direct or covert U.S. involvement in shaping or overturning the outcome of elections throughout Latin America. President Bush, in advance of last week's Cancun summit meeting, met with Mexican journalists and pledged that the United States would not be involved in the Mexican election and would work with the choice of the Mexican people. But U.S. progressives should remain vigilant. It's been many decades since a leftist president was tolerated on our southern border.

Mexicans go to the polls on July 2 to elect their next president to a constitutionally mandated single six-year term, along with 628 members of Congress. Six years ago voters elected Vicente Fox, the first president in 71 years who was not from the Institutional Revolutionary Party (PRI), Mexico's traditional ruling party. The 2000 election was largely free of irregularities, thanks in large part to Mexico's independent and well-resourced Federal Election Institute.

Fox, who ran as the candidate of the conservative National Action Party, or PAN, as it is called in Spanish, remains personally popular. While his legislative agenda has been thwarted in the PRI dominated legislature, Mexicans give him credit for serving honorably and not personally looting the treasury, as many of his predecessors have.

Fox has vocally supported Bush administration free trade policies such as the proposed Free Trade Area of the Americas -- earning the accusation of being a "lapdog of empire" from Venezuelan President Hugo Chavez. At the same time, Fox has distanced himself from U.S. policies in Iraq and been openly critical of U.S. immigration policy and proposals to build a wall along the U.S.-Mexican border.

Running for president as the nominee on the PAN ticket is 44-year-old Felipe Calderon, who served in Fox's cabinet as energy secretary. Calderon's candidacy has sputtered, and he recently removed his top campaign staff and changed his campaign slogan for the third time.

The PRI candidate is Roberto Madrazo, a long-time fixture of national politics. Madrazo grew up in the governor's mansion in the oil-rich gulf state of Tabasco, where his father also served as governor and later as PRI party president, positions his son would later hold. Madrazo inherits the remarkable PRI political machinery, with its legendary get-out-the-vote and steal-the-vote capacity. While claiming that he represents a reformed and chastened PRI, his campaign has been hampered by lackluster campaigning and tainted by his reputation for bullying and arm-twisting.

Mexicans wonder out loud about how Madrazo could be so rich after two generations of public service. Internet savvy Mexicans have been circulating the Google Earth coordinates (19 14' 22.79" N, 99 10' 16.50" W) to view Madrazo's 14,000-square-foot home on a 3.6-acre estate overlooking Mexico City, one of five houses and multiple sports cars that Madrazo reported on his financial disclosure statements.

Madrazo's wealth is a startling contrast to austere Lopez Obrador, a widower who lives in a modest apartment and who drove his own compact car to work when he served as mayor of Mexico City, the continent's largest metropolis. While Madrazo grew up in a life of privilege, AMLO is the son of a shopkeeper who worked in his youth as an advocate for indigenous groups in Tabasco. In the 1980s, he led efforts to successfully force the oil industry to pay reparations for damaging indigenous lands.

Polls show Lopez Obrador opening up a lead over his rival candidates. A mid-March poll conducted by El Universal showed Obrador as the preference of 36 percent of voters, with Calderon at 27 percent and Madrazo at 14 percent.

Meanwhile Subcommander Marcos, the visible leader of the Zapatista rebellion in the state of Chiapas, has launched the "other campaign." He is traveling to all the states of Mexico to raise issues left out of the main campaigns. He accuses all three major party candidates of being all the same -- and predicts Lopez Obrador will be unable to fulfill his promises.

U.S. analysts want to cast Lopez Obrador as part of the leftist tide sweeping Latin America, with the recent election of Evo Morales in Bolivia and Michelle Bachelet in Chile. But Lopez Obrador quickly dismisses any comparisons to trends or leaders in other countries. His role model, as he cautiously points out, is Mexico's beloved Benito Juarez, the Zapotec Indian from humble origins who as president unified the country during a time of external aggression and repelled French invaders in 1867.

Lopez Obrador's outsider and independent status was confirmed in April 2005 when national legislators from the PRI and PAN tried to prevent him from running on a minor legal matter. But their tactic backfired as millions of Mexicans took to the streets to support AMLO, forcing opposition party leaders to back off. AMLO has polled as the presidential front-runner ever since.

Unlike the other two candidates, AMLO's campaign doesn't bus in banner-waving supporters, and provide free food and T-shirts to bolster his campaign appearances. His popularity is rooted in his plain-spoken commitment to address the growing inequalities of Mexican society. His campaign slogan, "For the Good of All, First the Poor," powerfully connects with the half of Mexico's population who live in poverty and feel forgotten.

From the outside, Mexico appears to have had a decade of stability. But the reality is that poverty and insecurity are rising. Real wages have plummeted, and many communities in rural Mexico are now ghost towns after being devastated by the loss of 2 million agricultural jobs. Mexican farmers, after NAFTA, are unable to compete with the imports flowing in from subsidized U.S. farmers, particularly in corn.

A Lopez Obrador presidency would likely lead to some significant changes in U.S-Mexican relations. For instance, AMLO would not, like President Fox, carry the banner of U.S. free trade policies at meetings throughout Latin America. In fact, one of AMLO's "50 promises" calls for a renegotiation of the provisions of the 1994 North American Free Trade Agreement that deal with the importation of corn and beans.

AMLO would also reverse the drift, initiated under President Fox, of privatizing the public sector and opening up Mexican oil production to foreign investment. AMLO has made some business leaders nervous by his proposal to make public the beneficiaries of the 1994 bank bailout.

As Lopez Obrador stays in the lead, the attacks from other campaigns are turning more vicious. Both Madrazo and Calderon attack AMLO as an authoritarian and messianic populist. Calderon told a recent rally that Lopez Obrador was an enemy of foreign investment. "I'm the one who can make an economy grow," Calderon claimed. "All he knows how to do is chase jobs away."

Calderon's campaign has recently been running television spots to link Lopez Obrador to the left revolutionary politics of Venezuela's President Chavez. The ads show clips of both Chavez and AMLO criticizing President Fox and imply that they are working together. AMLO denounces these ads, pointing out that he has never met or spoken with Chavez.

We should expect the attacks to increase and should be vigilant for signs of U.S. involvement. After all, the stakes for U.S. corporate elites are high.

If there is a tide sweeping Latin America, it involves citizens electing leaders who will no longer subordinate the health and economic security of their people to a Washington-driven corporate free trade agenda. Mexico is about to join their ranks.

Chuck Collins is the co-author of "Economic Apartheid in America: A Primer on Economic Inequality and Insecurity" (New Press). He currently lives in Oaxaca, Mexico, and is covering the Mexican election.

Billionaires R Us
Wal-Mart's Walton family now has 771,287 times more money than the median U.S. household. What gives?

By Chuck Collins and Felice Yeskel. Posted October 24, 2005 at Alternet.org.

Fall is inequality season. Every autumn, as the leaves change color, we get a vivid new picture of the trends that pull us apart as a country.

This year is no different. But after almost three decades of incrementally widening disparities of wealth and income, it's worth noting that we've entered a new version of economic apartheid, American-style. Let's call it Inequality 2.0.

The United States is now the third most unequal industrialized society after Russia and Mexico. This is not a club we want to be part of. Russia is a recovering kleptocracy, with a post-Soviet oligarchy enriched by looting. And Mexico, despite joining the rich-nations club of the Organization for Economic and Community Development, has some of the most glaring poverty in the hemisphere.

In 2004, after three years of economic recovery, the U.S. Census reports that poverty continues to grow, while the real median income for full-time workers has declined. Since 2001, when the economy hit bottom, the ranks of our nation's poor have grown by 4 million, and the number of people without health insurance has swelled by 4.6 million to over 45 million.

Income inequality is now near all-time highs, with over 50 percent of 2004 income going to the top fifth of households, and the biggest gains going to the top 5 percent and 1 percent of households. The average CEO now takes home a paycheck 431 times that of their average worker.

At the pinnacle of U.S. wealth, 2004 saw a dramatic increase in the number of billionaires. According to Forbes Magazine, there are now 374 U.S. billionaires. The growth in billionaires took a dramatic leap since the early 1980s, when the average net worth of the individuals on the Forbes 400 list was $400 million. Today, the average net worth is $2.8 billion. Wal-Mart's Walton family now has 771,287 times more than the median U.S. household.

Does inequality matter? One problem is that concentrations of wealth and power pose a danger to our democratic system. The corruption of politics by big money might explain why for the last five years the President and Congress have been more interested in repealing the federal estate tax, paid only by multi-millionaires, than on reinforcing levees along the Gulf Coast.

Now, to pay for hurricane reconstruction and the war in Iraq, Congress is considering cuts in programs that help poor people, such as Medicaid and Food Stamps. They have not yet considered fairer ways of reducing the deficit by reversing special tax breaks for the rich, such as the recent cuts in capital gains and dividend taxes.

Inequality is non-partisan. The pace of inequality has grown steadily over three decades, under both Republican and Democratic administrations and Congresses. The Gini index, the global measure of inequality, grew as quickly under President Clinton as it has under President George W. Bush. Widening disparities in the U.S. are the result of three decades of bi-partisan public policies that have tilted the rules of the economy to the benefit of major corporations and large asset owners at the expense of people whose security comes from a paycheck.

Public policies in trade, taxes, wages and social spending can make a difference in mitigating national and global trends toward prolonged inequality. But our priorities are moving in the wrong direction.

For example, the failure to raise the minimum wage from its 1997 level of $5.15 an hour guarantees continued income stagnation for the working poor for years to come. The President and Congress's focus on tax cuts for the wealthy and their disinterest in government spending to expand equal opportunity sets the stage for Inequality Version 3.0.

We shouldn't tolerate this drift toward an economic apartheid society.

Chuck Collins and Felice Yeskel are co-authors of the new book, "Economic Apartheid in America: A Primer on Economic Inequality and Insecurity" (The New Press).

Case Against Inheritance Tax Is Bogus
The case for abolishing the federal estate tax is a sham, deflated by Congress' own research and investigative reporting.

By Chuck Collins and Bill Gates, Sr., Posted September 15, 2005 on Alternet.org.

A devastating hurricane hits the Gulf Coast. The war in Iraq claims almost 1,900 American lives with no end in sight in both casualties and cost. And red ink flows through both short- and long-term federal deficit projections. Yet in the coming weeks, congressional leaders will move to abolish permanently the estate tax, America's only levy on concentrations of inherited wealth.

Only after considerable pressure to respond to Hurricane Katrina and observe Chief Justice William Rehnquist's funeral did Senate Majority Leader Bill Frist back off from his determination to begin the estate tax debate immediately after Labor Day.

It will be fascinating to watch how the senators from Louisiana, Mississippi and Alabama explain to their constituents why a $1 trillion tax break for multimillionaires and billionaires, few of whom live in their states, ranks as a timely national priority.

The case for abolishing the federal estate tax is a sham, deflated by Congress' own research and investigative reporting. Yet congressional tax cutters continue to incant the "death tax" mythology: that the estate tax punishes success, sinks family farmers and small businesses, and is unfair double taxation. In the post-Katrina environment, they have even gone so far as to make the far-fetched claim that estate tax repeal will be an economic stimulus to the Gulf states.

There is no evidence that the estate tax imperils small-scale farms or America's entrepreneurial spirit. The estate tax is paid solely by multimillionaires and billionaires, and only after they pass on substantial wealth to their heirs. And the bulk of the assets subject to the tax take the form of appreciated property and stocks, wealth that has never been subject to any tax, let alone a double tax.

The heirs to some of America's largest family fortunes, including members of the Mars candy and Walton families, have paid handsomely to promote these myths. But the responsibility at this moment lies with congressional leaders who must justify a windfall tax cut for the wealthy during a time of war and natural disaster.

Never before has our country passed tax cuts for the wealthy during a time of war. Historically, wealth has been "conscripted," in the Civil War parlance, to share in the sacrifice and preserve domestic unity.

Isn't anyone embarrassed about this inequality of sacrifice?

It is unlikely repeal advocates in the Senate will muster the votes to abolish the tax, though the vote will be close. The real risk is that the Senate will reach agreement on an irresponsible reform that will effectively gut the law.

Repeal advocates, such as Sen. Jon Kyl of Arizona, have offered their own "reform" proposals that would raise the amount of wealth exempted by the tax to more than $10 million and drop the rate to 15 percent from its current level of 47 percent. Such an irresponsible reform would lose more than 85 percent of the revenue raised by the tax and cripple the nation's charitable sector, which according to a Congressional Budget Office study would experience a decline in estate giving of more than $10 billion a year.

We support a more modest reform that raises the wealth exemption to $5 million for a couple, keeps the rate at 45 percent, and carves out provisions for the transfer of closely held family business. Such a reform would retain substantial revenue in the face of war, disaster and deficits, and maintain a powerful incentive for charitable giving.

The proponents of all-or-nothing repeal have blocked proposals for such reasonable reforms since the summer of 2000. But it's time to bring predictability back into the estate planning process.

The estate tax is the most fair and equitable tax in the land. A levy on estates in excess of $5 million is an appropriate mechanism for those who have disproportionately benefited from our marvelous system of wealth creation to pay back the society that fostered the fertile ground for their success.

The estate tax should be rightfully understood as a "gratitude tax."

Bill Gates Sr. is co-chairman of the Bill and Melinda Gates Foundation. Chuck Collins is senior fellow at United for a Fair Economy, a nonprofit research group. They wrote this article for the Knight Ridder/Tribune News Service.

Wealth Inequality by the Numbers

Not since the Gilded Age has this country seen such a yawning gap between the very rich and those with little wealth. Wealth concentration has spiked since the 1970s: whereas in 1971, the top 1% of households held less than 20% of total household wealth, by 1998 the top percent owned 38%. According to the most recent Survey of Consumer Finances, the bottom 50% of the U.S. population claimed just 2.8% of total private wealth in 2001, while the top 5% held 58%.

The racial wealth gap persists (it far exceeds the racial income gap), evidence of the country’s long legacy of discrimination. Data show that African-American wealth holdings actually fell during the boom years of the 1990s, even while the black-white income gap closed a bit.

Few other periods have reached such extremes of wealth inequality. Those that have include the Gilded Age and the years preceding the Great Depression. Inequalities not only undermine opportunity—they fuel economic and political instability.

http://www.dollarsandsense.org/archives/2004/0104inequality.pdf

SIXTY YEARS ago today, on June 22, 1944, President Franklin Roosevelt signed into law the Serviceman's Readjustment Act of 1944, known as the GI Bill of Rights. Without the GI Bill, the American Dream would have never become real for millions of Americans.

Both of us benefited from the GI Bill, which opened tremendous opportunities for veterans and their families and transformed America. Between 1945 and 1956, more than 8 million returning veterans received debt-free college educations, low-interest home mortgages, and small-business loan assistance.

The GI Bill was one of the greatest investments made in America's history -- and it almost didn't happen. Influential college presidents testified against it, complaining that millions of unschooled veterans would lower education standards and create millions of "educational hobos." Congressional conservatives tried to block it as too expensive and gave in only after concerted grass-roots lobbying by the American Legion.

Half of those attending college in 1947 were veterans, many the first in their families to go beyond high school. The GI Bill education benefits, combined with the post-war subsidized mortgages through the Federal Housing Administration, Farmers Home and the Veterans Administration, provided more than 20 million Americans with tickets on the wealth-building train.

It's time for a new GI Bill.

It's time to revitalize the American Dream and restore the foundation for a new century of progress. America needs a bold effort to expand opportunity, close the racial wealth divide and ensure that college is affordable to all Americans.

We propose the creation of a GI Bill for the next generation. A fund would provide grants for college and subsidized mortgages. It could be modeled after the "baby bond" program passed in Britain last year that creates a universal savings program for all citizens as they come of age. In this scheme, high-school graduates are eligible for funds to open doors for higher education, homeownership and small business development.

This opportunity fund could be capitalized by a reformed federal estate tax, our nation's only tax on accumulated wealth. Much of that wealth has appreciated tax-free over generations. A reformed estate tax, completely exempting the first $2.5 million in wealth for an individual and $5 million for a couple, would generate almost a trillion dollars in revenue over the next two decades.

Unfortunately, Congress is considering abolishing the estate tax, even at a time of war, sacrifice, huge budget deficits and widening gaps in opportunity. We must rethink this.

What would be more American than for those who have accrued tremendous wealth in our country to pay a small part of their accumulated wealth to capitalize a fund for opportunity for the next generation?

America's multimillionaires and billionaires have disproportionately benefited from the fertile ground that we together, as taxpayers, have created for private wealth creation. After all, where would the Forbes 400 richest Americans be without our country's investment in technology, research, defense, market protections, property rights and public infrastructure?

Where would business and shareholders be without a sound national currency and court system, a work force trained through public education, or public investments in communications, energy and transportation?

As Warren Buffett has said, "If you stick me down in the middle of Bangladesh or Peru or someplace, you'll find out how much this talent is going to produce in the wrong kind of soil. I will be struggling 30 years later. I work in a market system that happens to reward what I do very well -- disproportionately well."

A GI Bill for the next generation is the best way to honor the families who are serving in our military. But it should be a universal benefit, also providing opportunity for the next generation of teachers and nurses, firefighters and scientists.

Alumni of the post-World War II GI Bill need to step forward and testify to the transformative boost that we received from that investment. And the children and grandchildren of GI Bill recipients need to recognize the indirect benefits that our families received thanks to the education, housing and small-business investment benefiting our parents and communities.

With this resolve, we could build a new rung in the next generation's ladder of opportunity.

Bill Gates Sr., the father of the Microsoft chairman, is co-chairperson of the Bill and Melinda Gates Foundation. Chuck Collins is co-founder of United for Fair Economy and Responsible Wealth. They are co-authors of Wealth and Our Commonwealth: Why America Should Tax Accumulated Fortunes.

Shrink, Shift, Shaft
Bush's tax policy is aimed at drastically reducing government services and moving the tax burden to poorer wage-earners. The result: a case of "trickle-down injustice."

Sojourners Magazine April 2004

Facing budget shortfalls in Arizona, a leading state senator announced that legislators were reviewing all state spending and that "nothing was sacred."

But the religious coalition Protecting Arizona's Families responded, "Is nothing truly sacred? What about state programs for the hungry, homeless, and mentally ill children? Do they stand on the same moral ground as subsidies for corporations? And why won't we consider raising taxes on the wealthy before we cut programs on the poor?"

Active Christians and other people of faith are accustomed to weighing in on the morality of public spending and budget choices. Much of our recent attention has been focused on how our tax dollars are being used to advance an imperial foreign policy.

But we should also be alarmed at the changes being legislated to reshape the way our government raises money through federal and local tax systems. Federal tax cuts in 2001, 2002, and 2003 have fueled massive deficits and blocked possibilities for spending on human needs. These tax cuts have "trickled down" to worsen state and local budget deficits, forcing deep cuts in spending on poverty,

health care, and education. Almost every state has been plunged into its worst budget crisis since World War II. According to the Center on Budget and Policy Priorities, states are facing budget gaps totaling $85 billion in the coming year.

As a result, localities have laid off teachers, firefighters, police officers, and social workers, closed libraries and health clinics, cut childcare, mental health services, public transit, and pollution control, raised public college tuition and reduced financial aid, and let schools, playgrounds, roads, and bridges go unrepaired. Oregon shortened its school year by three weeks. Thirty-four states have cut spending on Medicaid and the State Children's Health Insurance Program over the past two years, removing between 1.2 million and 1.6 million low-income people from health coverage, including an estimated 490,000 to 650,000 children. The list goes on.

Most state and local taxes are highly regressive, imposing a higher burden on the poor than the wealthy. According to the Citizens for Tax Justice, the average state and local tax rate for the bottom fifth of income earners is 11.4 percent, more than twice the rate paid by the richest 1 percent of taxpayers. In some states, such as Washington and Florida, the poorest fifth of taxpayers pay as much as 14 percent of their income; the wealthiest 1 percent pay less than 3.5 percent.

These states practice the opposite of the "preferential option for the poor." Some states - such as Alabama, Tennessee, and Virginia - tax food and basic needs at a higher rate than income from investments. State and local sales taxes on items such as food take a larger percentage of the income from the pockets of the poor, making the state systems more regressive.

In the gospel of Mark, Jesus watches as people contribute to the treasury. He observes that the widow "put in more than all the contributors to the treasury; for they all put in out of their surplus, but she, out of her poverty, put in all she owned, all she had to live on" (12:41-44). This distinction underlies the moral basis for a progressive tax system: Those with the greatest capacity to pay should pay a higher percentage. Ten percent of the income of a person with a $10,000 income cuts into their basic sustenance. Ten percent of the income of a person with a $1 million income does not.

THESE DIRE BUDGET straits are largely the result of political and moral choices. In addition to factors such as recession, war, and increased prescription drug spending, many states during the 1990s gave away massive tax breaks to corporations and the wealthy. Some states are reversing these tax giveaways, but most politicians are afraid to restore some of the tax cuts made in fat times. Rather than set aside adequate funds for the lean times, states have irrevocably returned these revenues to the political donor class.

Every state has been clobbered by federal tax policies. Each of the three federal tax cuts since 2001 has directly and indirectly chipped away at state revenue. At the same time, federal devolution policies and mandates have shifted responsibilities and costs to states for such big-ticket items as education testing, security, health care, and social welfare. In 2003, the federal government could have sent $100 billion to the states to help them forestall the most painful cuts. Instead, Congress passed $330 billion in tax cuts, 53 percent of which went to the wealthiest 1 percent of households - those with annual incomes over $337,000.

The Bush tax cuts of 2001-2003 have not been "cuts" for everyone: Most taxpayers are experiencing a tax shift in the form of fee increases for services, property tax hikes, and cuts in local services.

So how did we get into this situation? Why are state tax systems allowed to remain so regressive, with undue burdens on low-income taxpayers?

In part, there is a well-funded anti-tax, limited government movement that includes national organizations such as Americans for Tax Reform, Citizens for a Sound Economy, and a network of state and local limited-government policy and grassroots groups. Over several decades, they have succeeded in changing the terms of the debate and political climate on state and federal fiscal issues. As a result, most state legislators are afraid to raise taxes to face their budget deficits. Nor will the federal government provide meaningful aid to the states to enable them to overcome the budget shortfalls.

And according to some of the architects of the right-wing "shrink government" program, the state budget crisis is right on schedule. Their agenda could be characterized as "shrink, shift, and shaft."

SHRINK. The conservative movement has long had a goal of greatly shrinking government, essentially rolling back central elements of the New Deal and Great Society reforms, such as college loans, homeownership programs, public health insurance and pension programs, and programs that help the poor. Budget deficits force budget cuts and thwart new spending initiatives. Underlying this program is an ideology about the role of government that is deeply out of step with the majority of Americans. How else can we explain the rationale for further federal tax cuts while our annual deficit exceeds $500 billion?

In truth, they don't want to shrink all parts of government. These tax cutters want to dismantle government programs that foster social justice and broaden wealth and opportunity for all Americans. They also aim to weaken the elements of government that regulate corporations to protect workers, the environment, and community interests. Their vision of limited government could be characterized as a "watchtower" state - with our taxes paying only for military, police, fire, and property rights protection.

SHIFT. Central to the right-wing fiscal program is to shift the tax burden and weaken the progressive tax system. For three decades, the basic thrust of this agenda has been to cut taxes on wealth and capital gains and shift the burden of paying for government onto wage and consumption taxes. Hence the focus on tax cuts that primarily benefit the rich, such as repealing the federal estate tax and cutting dividend and capital gains taxes.

A second shift is to move tax and spending from federal government to states and towns. As noted earlier, local tax systems are much more regressive because of their dependence on broad-based consumption taxes. The irony of this was dramatized last summer when many parents received checks from the IRS for the expanded Child Tax Credit. But as some families received $400 per child, they simultaneously witnessed their services deteriorate, while local and state fees, sales taxes, and property taxes were increased to make up for the federal tax cuts.

THE SHAFT part of the program involves the myriad budget cuts and shifts eroding the quality of life for working people. But these tax cutters are counting on the public not to connect the dots between local service cuts and federal budget policies.

We can now look forward to a "permanent tax cut offensive," with a long list of additional tax cuts on the 2004 agenda, including new corporate giveaways and tax-free savings accounts. "You'll have a tax cut each year," said Grover Norquist of the Americans for Tax Reform, architect of the "shrink, shift, and shaft" strategy. "Our goal is to shrink government to the size where we can drown it in a bathtub."

THE GOOD NEWS is that coalitions are forming in many states to oppose budget cuts and advocate for progressive tax reforms. In Connecticut, the statewide children's advocacy group has advanced a proposal for a "millionaire's tax," an increase in the top income tax rate, and won support from Republican Gov. John Rowland. In California, health care advocates attempted last year to restore the highest tier of state income tax rates that would have raised hundreds of millions for children's health care. In Alabama, even though voters rejected a progressive tax reform initiative, a missing moral voice was brought into the debate.

At the national level, the Fair Taxes for All coalition is tooling up to fight future tax cuts and illustrate the connection between the federal tax breaks for multimillionaires and the deteriorating quality of life at the local level.

Beyond broad taxation, the moral justification for taxing great wealth at higher rates, and imposing an inheritance tax, is that the wealthy have benefited disproportionately from the defense of property and the fertile ground created by public investment for private wealth. In the words of Bill Gates Sr., it is a "payback to society, the price of building and protecting wealth in the United States."

At stake is the question of what kind of society we want to become. Do we want to dismantle the ladder of opportunity we have attempted to build over the last half century? Do we want to further polarize our country along the lines of wealth and power? Ultimately, defense of a progressive revenue tax system must be linked to a broader moral framework and a vision of the kind of communities and society we want to have.

Chuck Collins was associate director of United for a Fair Economy and co-author, with Bill Gates Sr., of Wealth and Our Commonwealth: Why America Should Tax Accumulated Fortunes (Beacon, 2003) when this article appeared.

Dig Deeper

Perfectly Legal: The Covert Campaign to Rig Our Tax System to Benefit the Super Rich-And Cheat Everybody Else, by David Cay Johnston (Portfolio, 2003)

"Upper Brackets: The Right's Tax Cut Boosters," a report on the conservative anti-tax movement by People for the American Way (www.pfaw.org, search: "upper brackets")

TAKE ACTION FOR FAIR TAXES

Pass resolutions. Get your congregation, social action committee, community organization, and local government to pass a resolution urging federal representatives to reverse tax cuts for multimillionaires and send aid to states and cities. United for a Fair Economy is coordinating a national resolution campaign. For information, sample resolutions, and a list of participating congregations and municipalities, go to www.faireconomy.org/resolution or call toll free (877) JOIN-UFE x26 for an organizing kit.

Join the national Fair Taxes for All coalition. See www.fairtaxesforall.org. Join with more than 350 organizations around the country to oppose permanent tax cuts and stop additional tax giveaways to corporations and the wealthy.

Preserve the Estate Tax. Join the effort to stop repeal of our nation's most progressive levy, the estate tax. You can personally sign the "Call to Preserve the Estate Tax" and get plugged into Responsible Wealth's informal advocacy network at www.responsiblewealth.org.

Democracy's Trust Fund
On TomPaine.common sense

Within weeks of passing a fiscally reckless $350 billion tax break primarily benefiting millionaires, Congress is at it again. The next stop on the ongoing "tax break offensive": permanent elimination of the estate tax.

The estate tax is a wealth inheritance tax, which exempts more than 98 percent of Americans. Only estates over $1 million for individuals and $2 million for couples are taxed today. The threshold rises incrementally to $3.5 million for individuals and $7 million for couples in 2009 -- exempting all but the most massive one-half of one percent of estates.

On June 18 the House of Representatives voted 264 to 163 to sink the estate tax, with 41 Democrats joining all but four of the Republican majority to sink the estate tax. The vote was virtually the same as a year ago.

The fate of the estate tax hangs on the Senate, where pro-repeal forces have been unable to muster the 60 votes they need to pass permanent repeal. There is more receptiveness to a reform proposal there, as complete repeal efforts will remain stalled for the foreseeable future.

If passed, estate tax repeal would enable the heirs of multi-millionaires and billionaires to keep an extra $161 billion in inherited fortunes by 2013 while adding to the deficit. Between 2014 and 2023, it would cost $820 billion in lost revenue.

Juxtapose the House's vote for another tax cut for multimillionaires with its refusal to address the expansion of the child credit for 12 million low-income working families, and you begin to appreciate the real drive behind these tax cuts.

The radical right's budget agenda is to shrink, shift and shaft. Shrink government to a "watchtower state," with military, police and property-rights protection. Shift the tax burden off wealth and onto wages, off of federal progressive taxation and onto regressive forms of state and local taxation. And shaft people who depend on government safety nets or investment in equality of opportunity.

Estate tax repeal has a hallowed spot in their program. And they keep repeating discredited myths to justify its elimination, such as the canard that the estate tax forces farmers out of business.

At a June 17 press conference, Tom Bius from the National Farmers Union, which represents over 300,000 small farmers, called on Congress to "stop using farmers to front for complete estate tax repeal." The Farmers Union supports reforming the estate tax, but not repeal. The pro-repeal American Farm Bureau has not produced a single example of a farm lost because of the estate tax.

Opponents of the estate tax claim the estate tax is "double taxation." But the bulk of assets in taxable estates -- appreciated stocks and real estate -- is wealth that has never been taxed.

On June 18, the House voted down a Democratic alternative that would have raised the wealth exempted by the estate tax from the current $1 million to $3 million immediately. The all-or-nothing repeal forces, backed by wealthy families, such as Mars candy and the Connells (Hallmark greeting cards), oppose compromise. Their hired hands in Congress have blocked reform efforts knowing they will undercut the "populist" image they have tried to cast. But such reforms will not help the Mars family (net worth $30 billion), who spent a $1 million last year to hire lobbying powerhouse Patton Boggs to lobby on the estate tax.

Our country is facing federal budget deficits of more than $400 billion a year, states are in their worst budget crisis since the 1930s and everything from schools to health care to fire departments are being slashed. Repealing the estate tax would be unconscionable.

Killing the estate tax would increase the deficit, deepen the cutbacks, shift the tax burden onto those less able to pay and jeopardize the Medicare and Social Security on which millions of Americans depend. To make matters worse, repeal would remove a healthy incentive for charitable giving, the lifeblood of our civic institutions.

At the heart of the case for preserving the estate tax is recognition that none of us gets to where we are alone. This is not to minimize individual hard work or creativity. But the United States has remarkably fertile soil for the creation of wealth thanks to public investments made over generations, funded in part by estate taxes. We have an extensive transportation infrastructure. We have a skilled workforce because of substantial investment in public schools and colleges.

Without taxpayer-funded research, there would be no Internet, no human genome mapping and few vaccines and medical wonder drugs. The estate tax is a reasonable repayment of a debt to our society by those who benefited most financially.

The real question is not how much money we are leaving our children and grandchildren, but what kind of country we are leaving them.

Do we want them to grow up in a polarized country with ever-greater extremes of wealth and poverty?

Do we want them to grow up in a country where equal opportunity has become a cruel joke? Where some children expect to inherit billions of dollars tax-free while millions of others suffer preventable illness and attend crumbling schools without libraries, art, music, science labs or even enough teachers?

Do we want to undermine democracy by turbocharging an increasingly powerful hereditary aristocracy? The top 1 percent of households already has almost 40 percent of the nation's wealth, twice the level of the 1970s.

Originally passed in 1916, the estate tax was a response to the wide inequalities of the Gilded Age and a recognition that too much concentrated wealth and power was putting democracy at risk. Societies with great hereditary concentrations of economic and political power are not friendly to strong stepping-stones of opportunity, including public education, small business assistance, and science and technology research. They are more focused on nurturing old wealth and power than creating avenues for new wealth and opportunity.

An estate tax on the very wealthiest Americans is not a threat to prosperity, but a pillar of a dynamic economy and democracy.

Published: Jun 20 2003

Tax Wealth to Broaden Wealth
Reframing the debate and mobilizing a constituency

In the American Prospect Issue Date: 5.1.03

I recently spoke at a veterans' club in suburban Boston about the dangers of America's growing wealth gap and its possible solutions. I informally polled the assembled group of 150 men, all white and over the age of 60. How many had received a low-interest home mortgage from the Federal Housing Administration, the Veterans Administration or the Farmers Home Administration? About two-thirds raised their hands. How many graduated from college without any debt, thanks to the GI Bill or other public-education programs? Again, about two-thirds. How many thought that these past policies were bad investments or a waste of tax dollars? Not one.

My final question generated a lot of laughter: How many had helped their children, through a "Parental Down Payment Assistance Program," purchase a home or start a business? Almost every hand in the room went up. Here was living testimony that our country's postwar commitment to wealth building for one generation and one racial group has had immeasurable multigenerational benefits.

In the three decades after World War II, our country implemented an unparalleled program to broaden wealth ownership. Millions of families got tickets on a multigenerational wealth-building train in the form of college, housing and small-business assistance. Between 1940 and 1970, almost one-fifth of the nation's citizens transformed themselves from tenants to homeowners, thanks in large part to federally subsidized mortgages, tax incentives and highways to new suburbs. Of course, because of racial discrimination in mortgage-lending practices and housing and educational opportunities, many people of color were left at the station.

Today there is a wide support, in principle, for broadening wealth ownership. But how will we pay for the next generation of wealth-broadening initiatives?

Taxation of wealth is simply off the agenda. In fact, we are rapidly reducing the tax burden on those with accumulated wealth via recent cuts in capital-gains taxes and the current push to permanently repeal the federal estate tax and eliminate income taxation of dividends.

Some argue that Americans' aversion to taxing wealth is a deep part of our national psyche, an instinctive rejection of class politics rooted in the broad aspiration to become wealthy. Polls report that 19 percent of Americans believe they are in the top 1 percent of earners, and an additional 20 percent expect to be someday. As David Brooks wrote recently in a column headlined the "Triumph of Hope Over Self-Interest," "None of us is really poor; we're just pre-rich."

But a politics of economic aspiration could also support a program of broadening wealth ownership that's funded by taxation. The main problem is the lack of a well-organized political constituency for broadening wealth ownership that could counter three decades of conservative anti-tax, anti-government organizing.

The movement to repeal the estate tax grew during the 1990s because of a focused and well-resourced 10-year campaign to shift public opinion and line up votes for repeal. Until 2001 there was no organized defense of the estate tax. There was a movement to broaden wealth [see "Savings Incentives for the Poor," Jared Bernstein, page A14] but no connection to tax policy.

Conservatives begin with several advantages, beyond the obvious fact that most people lack enthusiasm for paying taxes. Anti-tax organizing is funded by a small coterie of very wealthy taxpayers (and campaign contributors) who have an immediate self-interest in not being taxed. Conservatives have a long-term ideological agenda around taxation (to starve the regulatory and welfare state), a potent political slogan ("It's your money") and an economic theory (it creates jobs). Their short-term incremental program is to shift the tax burden off capital and onto consumption, off higher incomes and onto middle-income taxpayers, which in turn increases the popular resistance to taxation. They argue that taxing the wealth is bad for economic incentives and efficiency, on the theory that the market works so well that people, by definition, deserve what they get.

However, the continuing battle over the estate tax provides an opening to draw on the historic rationale for taxing wealth, reframe the debate and mobilize a pro-wealth tax constituency.

The social movements of the late 1800s advocated wealth taxation because too much concentrated wealth imperiled our democracy. Gilded Age robber barons began resembling the noblemen of the Old World. Reformers viewed the inheritance tax as a fundamentally American mechanism to interrupt these dynastic accumulations.

Proponents of progressive income and wealth taxation also believed that the very wealthy disproportionately benefited from our free-market economic system, as well as from public investment. As President Theodore Roosevelt stated in 1906, "The man of great wealth owes a particular obligation to the State because he derives special advantages from the mere existence of government."

To rekindle that debate, we must shine a spotlight on society's contribution to wealth creation. Wealth taxation is not confiscatory. Rather, it is an appropriate levy upon those who have received the most from America's fertile soil of public investment, charitable institutions, natural resources and the efforts of our forebears.

How wealthy would our very rich be if they had plied their talents in a country without regulated markets, systems of property rights and legal remedies, and subsidized research and education systems? As Warren Buffett observed, "If you stick me down in the middle of Bangladesh or Peru or someplace, you'll find out how much this talent is going to produce in the wrong kind of soil. I will be struggling 30 years later. I work in a market system that happens to reward what I do very well -- disproportionately well." As a culture, we overvalue the individual's heroic role in wealth creation and undervalue society's considerable role. A wealth tax, particularly at the point of passing on an inheritance, is a fair payment for the continued benefits of our economic system.

Wealth taxation also fosters greater equity and stability in our federal tax system. The biggest tax loophole in our system is that vast aggregations of wealth multiply dramatically, are spent and get transferred to heirs -- without ever being subject to the rigors of taxation faced by low- and middle-income wage earners. If our tax system is based on ability to pay, net worth is the single greatest element of taxable capacity.

Prior to 1916, the federal government raised revenue through the highly regressive tariff that, in the words of a legislator at the time, was a "license to rob and plunder industrious consumers." The establishment of the income and estate tax dramatically shifted the tax burden onto those better able to pay. Today that principle is eroding. At a time of mounting budget deficits, maintaining an estate tax or instituting a modest net-worth tax could enable those who are not rich to accumulate assets and lessen the tax burden on wage earners.

We also need to revive the historical policy distinction between "earned" and "unearned" income. Vestiges of this are still seen in some state tax systems, where income from "unearned" capital gains and dividend income is treated differently than "earned" wage income. Treasury Secretary Andrew Mellon, in other respects an early supply-sider, argued in 1924 that "the fairness of taxing more lightly incomes from wages, salaries or from investments is beyond question. ... Surely we can afford to make a distinction between the people whose only capital is their mental and physical energy and the people whose income is derived from investments."

The best mechanism to implement wealth taxation continues to be the federal estate tax. There is no tax less likely to depress economic incentives. But we still lack a stakeholder constituency for taxing wealth. This potential constituency includes those aspiring to the American dream, people who would benefit from the next GI bill-style program of broadening homeownership, wealth ownership and opportunity.

In the abstract, Americans are instinctively anti-tax. But when offered real choices and funds targeted to particular uses, they embrace progressive tax-spending initiatives. Wealth-tax revenue should be linked directly to expenditures that encourage and broaden wealth ownership. Our country presently makes substantial public investments that help economic winners build wealth. At death, some of that wealth can be transferred to the next generation -- and not just to fortunate sons and daughters in the family.

From our experience organizing Responsible Wealth, we know hundreds of entrepreneurs and wealthy individuals who favor such a proposal, buffering it from accusations of "class warfare." At the same time, we can build a constituency of future homeowners, savers and college graduates who have a stake in this program and in wealth taxation. As for that veterans' club, would its members support a "wealth opportunity fund," capitalized with a tax on the largest 1 percent of inheritances? If we do our homework they will.

Great concentrations of inherited wealth distort the public commitment to quality of opportunity. Consider how some colleges devote enormous resources to recruiting the academically mediocre sons and daughters of wealth to boost their capital campaigns. At the same time, state and federal tax cuts are fueling state budget deficits, leading many public universities to raise their tuitions and weaken opportunities for disadvantaged students. Is that smart? Is it fair?

Wealth taxation and asset development, in sum, need each other. Promoting wealth taxation, without linking it to a broader program of wealth building, is doomed politically. Conversely, a serious program of wealth broadening needs a source of serious money. Taxing concentrated wealth and linking those revenues to wealth spreading in the next generation is the political heart of a strategy to broaden equality of opportunity and ownership of wealth.

Chuck Collins

From Riches to Responsibility - Defending the Estate Tax

by Kimberly French
March/April 2003
UU World

The year Chuck Collins turned 16, his father took him aside for a man-to-man talk. Edward Collins told his son that he had set up a substantial trust fund for him.

Chuck remembers feeling utter amazement. The great-grandson of Oscar Mayer and an heir to the wiener fortune, he had grown up living comfortably, but not lavishly, in suburban Detroit. Now, as his father spelled out, he realized he would not have to work for money unless he wanted to. His dad also stressed his hope that the money would not change his son or his life goals.

It didn't. However, events took a very different course from the one the elder Collins had so carefully planned. Ten years later, in 1985, Chuck Collins gave away every penny of his inheritance, nearly half a million dollars, to foundations and groups that he knew needed funding — organizations working for the environment, peace, racial equality, and indigenous and gay people's rights.

"Wealth that just creates more wealth seemed wrong," says Collins, whose book in support of preserving the estate tax, Wealth and Our Commonwealth: Why America Should Tax Accumulated Fortunes, written with William H. Gates Sr., has just been published by Beacon Press. "At age 26, with no family responsibilities, I didn't want it. I didn't really need it. I wanted to make my own way. And I knew other things needed it more."

Before cashing in the fund, Collins wrote a letter to his father, a libertarian conservative, explaining his plans. A concerned Edward Collins flew to meet him the next day. In their second man-to-man talk about the money, the elder Collins wanted to make sure Chuck was considering how he would support any children he might have: "What if you have a child who has Down syndrome? Think about the cost of the care," Chuck remembers his father asking.

His father also asked if he considered himself a Marxist who had to renounce his class background. Chuck, a lifelong Unitarian Universalist, tried to reassure his dad, saying that he would feel comfortable with the label Gandhian or Christian, but he was not a Marxist.

After two days together, Chuck remained unswayed. "The decision to give away my wealth felt like the first real decision I'd ever made," he wrote in We Gave Away a Fortune. "Life presents only a few crystal-clear opportunities to take risks for what you believe, and this was one."

His father needn't have worried. Coming into his inheritance changed Chuck Collins not at all.

Now 43, a father himself, and a cofounder of United for a Fair Economy (UFE) in Boston, a nonprofit organization widely praised for its creative ways of illuminating the growing wealth gap, Collins has always been a social activist. As a first grader, he raised $125 for guide dogs for the blind by organizing a backyard fair for his class. In fifth grade, he wrote and circulated in his neighborhood an environmental leaflet that began, "Don't throw this paper away-it will cause pollution."

After college, he worked for the Institute for Community Economics in Springfield, Massachusetts, which was building a nationwide movement of land trusts, cooperatives, loan funds, and credit unions in poor communities. As he traveled to places like Appalachia and Maine, where most land is owned by absentee corporations, he formed a critique of a system that kept rich people rich and poor people poor. He began to see that inherited wealth — including his own trust fund — was a piece of the problem he was working to solve.

"Giving away the money was a necessary step for me to move along in the work I do," he says. "Two decades later, I'm doing this work because that was part of my journey. It gave me insight into the way concentrations of wealth undermine equality and democracy."

Collins has been coauthor of three previous books about economic inequality: Robin Hood Was Right: A Guide to Giving Your Money for Social Change (2000), Economic Apartheid in America (2000), and Shifting Fortunes (1999). But when he finished the new manuscript defending the estate tax, he knew he wanted his father to read it.

"Because of my relationship with my dad," he says, "I know how thoughtful conservatives think, and I respect them. I knew my dad supported the repeal of the estate tax, and I knew he would find the holes and weaknesses."

Edward Collins did a line-by-line edit that, for both men, recalled the way he used to go over his son's term papers, flagging "Syntax!" and other corrections in the margins. This time, though, at the end of the text, he wrote large: "You changed my mind."

For Chuck, it was the best review he'd ever gotten.

"My former view had been that the estate tax was a confiscatory tax that should be done away with," the elder Collins says. "But Chuck's book definitely brought me right on board. My realization that came from the book is that the estate tax is critical to maintaining our democratic society."

In December 2000, Chuck Collins got an e-mail from Bill Gates Sr. Collins works with plenty of rich and famous people through a UFE project called Responsible Wealth, which signs on people in the top 5 percent of wealth to work toward economic equality. Names like Paul Newman, Annie Dillard, Ben Cohen, Ted Turner, George Soros, various Rockefellers, Roosevelts, and other successful artists, executives, and heirs are apt to show up in Collins's in box.

But this e-mail out of the blue seemed a bit suspicious. He suspected a prankster at the UFE office — where a good sense of humor is a job requirement — was joshing him. As the story has evolved through many public retellings, Collins fired back: "Yeah, and I'm Minnie Mouse." Turns out, it really was Bill Gates's dad, who is a founding partner of a Seattle business-law firm and now director of the Bill and Melinda Gates Foundation, which funds projects to improve health in the developing world. And he couldn't have been more serious.

Like Collins, Gates considered the estate tax a moral issue and was deeply disturbed by the movement to repeal the tax — which President George W. Bush had made a top domestic priority when he took office. Especially troubling to both men was that, while repeal of the tax was not popular in polls, no one was arguing why it should be preserved. "We are now living in a second Gilded Age," Collins says. "There is as great a disparity of wealth now as there was then. And we're about to eliminate the estate tax? It's totally the wrong way. It's the one check we have."

Once Gates got Collins on the phone, he asked, "What can we do?"

Collins, the organizer, didn't skip a beat: "Draft a public statement, get media coverage, testify before Congress, write letters, op-ed pieces."

Gates replied, "I'm game. Let's do it all."

From both coasts, they got to work. First on the agenda was the kind of event Collins has become known for: creating a news story that steals the limelight from the mainstream newsmakers, with a sound bite too good for editors to resist: Tax Our Estates, Wealthy Say — It's Only Fair.

On Valentine's Day 2001, UFE's Responsible Wealth released its Call to Preserve the Estate Tax, a petition that has been signed by more than 1,000 of the wealthiest people in the country and is still taking signatures. Newsweek called it the "billionaire backlash."

Unfortunately, most members of Congress had already pledged their votes. In June 2001, President Bush signed a bizarre compromise bill crafted to comply with congressional budget mandates.

As the law stands, the estate-tax percentage will be gradually reduced over the next ten years. Complete repeal will occur in one year only — 2010. After that, the 2001 estate-tax rate will go back into effect. The tax's opponents have continued to introduce bills to make the repeal permanent, but none have passed.

Stimulating a lively debate over the estate tax is no easy task, Collins is the first to admit. Most people will never pay it nor receive any perceptible benefit from its repeal. Currently, the first $2 million of a couple's estate is exempt, so only the wealthiest 1.5 percent of the population will pay any estate tax.

Even more significantly, in the two years since the temporary repeal was passed, terrorism and threats of war have eclipsed coverage of the estate tax issue. Yet the repeal stands, and efforts to make it permanent continue. Permanent repeal, Collins argues, would threaten the very fabric of our democracy and of a society that holds equal opportunity as its ideal.

Contrary to what its opponents argue, the estate tax is a fundamentally American institution, Collins and Gates assert in Wealth and Our Commonwealth. Revolutionary era patriots — Thomas Jefferson, John Adams, Benjamin Franklin, Thomas Paine, Noah Webster, Samuel Adams, James Madison — rejected anything that smacked of the stratified aristocracies of Europe. Visiting Europe, Jefferson and Adams wrote of being appalled by concentrations of vast wealth passed down for centuries. Absolutely central to the success of the new republic, they argued, was fair, broad, and equitable distribution of wealth and property.

President Theodore Roosevelt first proposed the current estate tax in 1904 in response to the corruption and excesses of the Gilded Age. Progressive Era reformers feared that if wealth concentration continued unchecked, most of the U.S. population would end up subjects of the robber barons, as Europeans were to their aristocracies. The tax was signed into law in 1916.

Today's estate-tax opponents have portrayed it as an affront to individualism and personal initiative. A big myth put forth in support of repeal, Collins says, is the notion that "I made this money myself, so I don't owe anything."

"But there's a whole other piece of the story," Collins says. "Let's do an accounting here. What about how other people's efforts — employees, teachers, parents — and a stable government and economy, privilege, God's grace, and luck all helped you?"

In the book, Collins and Gates propose this scenario: Imagine that God is sitting in his (or her) office. He summons the next two beings to be born. One will be born in the United States, and the other in a poor country in the Southern Hemisphere. God's treasury has suffered some losses in technology stocks, so he has come up with a scheme to auction off the privilege of being born in the United States, where he knows there's a wonderful infrastructure of public health, education, and market mechanisms that enhance opportunity. Each spirit is to write down the percentage of its net worth that it is willing to pledge to God's treasury on the day it dies.

"What is it worth to operate within this marvelous system?" Collins and Gates write. "What's wrong with people who accumulate $20 million or $100 million or $500 million putting a third of that back into the place that made possible the enormous accumulation of wealth for them? What is it worth to be an American?"

So why aren't the huge gaps in income and wealth more of an issue in America? That was the question that Chuck Collins and some of his fellow organizers at the Tax Equity Alliance of Massachusetts were puzzling over back in the early 1990s.

The question was at the root of so many trends they were seeing then — and still see. Real wages are falling for many working people, as UFE points out. Funding for public education is declining, eroding its quality. Higher education, health care, and decent housing are being priced out of reach of working people. The United States has more illiteracy, more and deeper poverty, more violent crime, larger prison and homeless populations, higher infant mortality, and lower life expectancy than any other advanced nation. Meanwhile, a tiny, fabulously rich minority is amassing huge fortunes at an accelerating rate. Why aren't people talking about it?

Economics has been called the dismal science — dismally boring, that is. Collins, who has a master's degree in community economic development, has taken that as a personal challenge. If there is to be any debate or change, he figures, ordinary people have to understand the wealth gap and what is wrong with it, just as the early patriots and Progressive Era reformers did.

In 1995 Collins and Felice Yeskel, now director of the Stonewall Center for gay and lesbian students at the University of Massachusetts, put together a nuts-and-bolts workshop called The Growing Divide, combining user-friendly economic charts and concrete suggestions on how to take action. That workshop has taken on a life of its own. Hundreds of people in religious groups, unions, and on campuses have been trained as workshop leaders, and tens of thousands have taken it and still do.

Building on the success of The Growing Divide, Collins, Yeskel, and Boston College sociology professor Mike Miller got seed money from the Little Sisters of the Assumption to cofound United for a Fair Economy. From the beginning, UFE has had close kinship wit