Published on Saturday, March 3, 2001 in the Boston Globe
Why the Wealthy Want To Be Taxed

IF WE TOLD YOU that 450 millionaires and billionaires want to preserve our nation's tax on accumulated wealth, would you believe us?

We sense your skepticism. After all, the possibility that these individuals put the national common good ahead of their own financial self-interest does not compute. It's like an offer of free lunch. As many would ask, what's the ulterior motive?

Last week, Responsible Wealth launched a petition drive to preserve the federal estate tax, enlisting some of America's wealthiest individuals. The signers include names like Rockefeller, Gund, and Soros. They have been joined by Bill Joy, cofounder of Sun Microsystems, and Tiger Fund founder Julian Robertson.

The less visible signers include hundreds of small-business owners and barely millionaires. They include restaurant owner Judy Wicks and software entrepreneur Martin Rothenberg. All the signers will owe estate taxes, but they believe the policy should be reformed, not repealed.

The signers want to stimulate a national dialogue about the potential downsides of estate tax repeal to address important fiscal and social questions such as these: What will a $7 billion reduction in charitable giving do to our hospitals, universities, nature conservancies, and human service organizations? How will states manage without the $5.5 billion in annual revenue that comes to them through the federal estate tax? What will be the impact on our economy, democracy, and civic life of further concentrating wealth and power in the hands of a few at a time of the greatest inequality since the 1920s?

Some might argue, ''It's easy for these superwealthy to call for preservation of the tax because they pay high-priced accountants and lawyers to avoid it.'' But the estate tax toll is paid primarily by the richest half-percent of households, the 4,000 people who die each year with estates over $5 million. Unless they leave their entire legacy to charity, they cannot escape estate taxes.

Some repeal advocates acknowledge that the rich pay a lot but can afford the hit, while owners of small businesses and family farms - illiquid assets - are the real losers. Propaganda for repeal is so full of pictures of small farmers that it could be mistaken for a 4-H club newsletter.

But the facts tell a different story. Family farms and businesses were the majority of assets in only six out of every 10,000 estates in 1997, the last year for which we have data. The estate tax was reformed that year to provide further protections for these enterprises.

Nonetheless, our signers share the concern that any family farm or small business might be lost due to estate taxes. They advocate reforming the estate tax by simplifying it and dramatically raising exemptions. Repeal advocates have blocked these proposals in their all-or-nothing bid for complete repeal.

Unfortunately, most congressional backers of estate tax repeal seem to have compassion for small farmers only when they die. In the Senate, 49 of 51 proponents of estate tax repeal also voted in 1996 for the Federal Agricultural Improvement and Reform Act, which was generous to corporate agribusiness and factory farms but had a devastating impact on small farmers.

Signers of the Responsible Wealth statement have been accused of being part of a ''selfish lobby'' of charitable foundations and nonprofit organizations that depend on charitable gifts. Yet this independent charitable sector is a vital part of our religious, civic, and economic life. The estate tax greatly encourages giving, particularly among those with estates exceeding $20 million. Ironically, the accusation of selfishness is coming from the same people who want less government and ''a thousand points of light'' in the private sector.

Another accusation is that this billionaire backlash is a front group for the estate tax lawyers and insurance industry working to protect the lobby that protects them from the estate tax. Indeed, estate planning professionals have formed an association to lobby to preserve their jobs. But the signers of this statement have other concerns.

Like Republican President Theodore Roosevelt and Supreme Court Justice Louis Brandeis, who advocated creation of the estate tax more than 85 years ago, the signers are concerned about the dangers to the American Republic posed by concentrated wealth and power.

Perhaps the signers of the Call to Preserve the Estate Tax are selfish. They want their children and grandchildren to grow up in a country with a flourishing civic sector and without gross disparities of wealth and poverty. And they want to live in a country where what you do in your life counts more than what family you are born into.

Chuck Collins and Mike Lapham co-founded Responsible Wealth.