How many billionaires land on the Forbes 400 list courtesy of our technological and scientific commons, including the Internet, airwaves, biotechnology and mechanical advances?
Bill Gates Sr. and Chuck Collins argue that the estate tax is a form of "opportunity recycling." See our oped published in dozens of daily newspapers and on Common Dreams.
http://www.commondreams.org/views06/1226-25.htm

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.

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.

Listen to Chuck Collins on Social Change Philanthropy on Ann Online, May 2004

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.

Wealth And Our Commonwealth -Why America Should Tax Accumulated Fortunes excerpt on Thinking Peace

by William H. Gates and Chuck Collins

The essence of the American experiment is our collective rejection of European hereditary aristocracy and grotesque inequalities of wealth. When Alexis de Tocqueville visited the United States in the mid-nineteenth century, he noted that equality of condition permeated the American spirit: "The American experiment presupposes a rejection of inherited privilege." In the words of novelist John Dos Passos, "rejection of Europe is what America is all about."

The nation's founders and populace viewed excessive concentrations of wealth as incompatible with the ideals of the new nation. Revolutionary era visitors to Europe, including Thomas Jefferson, John Adams, and Ben Franklin, were aghast at the wide disparities of wealth and poverty they observed. They surmised that these great European inequalities were the result of an aristocratic system of land transfers, hereditary political power, and monopoly.

Monarchies and hereditary aristocracies mocked the republican principle of self-government. Writing in Common Sense, Thomas Paine attacked the notion of hereditary government: "To the evil of monarchy we have added that of hereditary succession; and as the first is a degradation and lessening of ourselves, so the second, claimed as a matter of right, is an insult and imposition on posterity."

In two other articles, "Rights of Man" and "Agrarian justice," Paine extended his contempt of inherited political power to a critique of inherited economic power. Paine proposed an inheritance tax that would fund an early version of Social Security.

The distrust of concentrated wealth was so great that, in an extreme sentiment, Ben Franklin argued "that no man ought to own more property than needed for his livelihood; the rest, by right, belonged to the state." One could not accumulate vast wealth, in the republican worldview, simply through one's own labors. In small-scale agrarian freeholder society, where laud ownership was more widely distributed among men of European ancestry, there was a "natural distribution of wealth." Farmers, artisans, and other workers reaped the "fruits of their own labor."

In 1776, artisans from Philadelphia put forward a provision for inclusion in the original state constitution of Pennsylvania. They advocated for a limit on the concentration of wealth. "An enormous Proportion of Property vested in a few Individuals is dangerous to the Rights, and destructive of the Common Happiness of Mankind; and therefore any free State hath a Right by its Laws to discourage the Possession of such Property."

The provision was narrowly rejected. But the concern about inequality and accumulated wealth was present at the formation of our nation.

Indeed, central to American republicanism was the principle of a broad and fair distribution of wealth and property. Noah Webster, writing in favor of adopting the U.S. Constitution in 1787, expressed that "a general and tolerably equal distribution of landed property is the whole basis of national freedom" and wide spread distribution of property was "the very soul of a republic." Too much inequality was a threat to a self-governing society. Without an equitable land distribution, the founders believed, the republic would not survive.

John Adams also viewed broad land ownership as a key ingredient in maintaining a balance of political power. He was greatly influenced by seventeenth-century philosopher James Harrington, who argued that the widespread distribution of property dispersed power. Adams believed that when "economic power be came concentrated in a few hands, then political power flowed to those possessors and away from the citizens, ultimately resulting in an oligarchy or tyranny." In a 1776 letter to James Sullivan, Adams articulated his perspective that a balance in property owner ship was essential to liberty.

The balance of power in a society, accompanies the balance of property in land. The only possible way, then, of preserving the balance of power on the side of equal liberty and public virtue, is to make the acquisition of land easy to every member of society; to make a division of land into small quantities, so that the multitude may he possessed of landed estates. If the multitude is possessed of the balance of real estate, the multitude will take care of the liberty, virtue, and interest of the multitude, in all acts of government.

Thomas Jefferson, writing to James Madison in 1785 made the now famous statement that "the small land holders are the most precious part of a state." He argued that legislators could not invent too many devices for subdividing property, "only taking care to let their subdivisions go hand in hand with the natural affections of the human mind."

In the republican worldview, European aristocrats created unbalanced distributions of wealth by controlling the land through inheritance laws of primogeniture and entail. These land tenure systems allowed land transfers only to oldest male children, maintaining hereditary concentrations of land rather than broadly distributing it. In a conscious rejection of primogeniture, Jefferson wrote:

The descent of property of every kind therefore to all children, or to all the brothers and sisters, or other relations in equal degree, is a politic measure and a practicable one. Another means of silently lessening the inequality of property is to exempt all from taxation below a certain point, and to tax the higher portions of property in geometrical progression as they rise.

The revolutionaries believed in equitability, a notion of relative equality and fairness, rather than rigid equality. Revolutionary writers and orators underscored that American society would have modest inequalities. "The utopian schemes of leveling, and a community of goods," wrote Sam Adams, "are as visionary and impracticable, as those which vest all property in the Crown." Rigid equality, according to Sam Adams, would be "arbitrary, despotic, and in our government unconstitutional." Minor in equalities would exist as the result of differences in individual talent, effort, and modest variations in property ownership.

This equitability translated into a culture that was antiaristocratic in sentiment. To be labeled an aristocrat or to be accused of advocating for "aristocratic policies" was the ultimate political slander in revolutionary America. For instance, John Adams through much of his later years had to fight the whispers that he had "monarchist sympathies," having spent so many years consorting with royalty in France and England.

The founders celebrated the exceptionalism of the American experiment and heartily rejected aristocratic politics and economic policy. "The economic agenda for a republic became clear," writes James Huston. "Enact the opposite of aristocratic legislation."

What made the new nation unique was its relative equality. Noah Webster exuded confidence in the justness of the American system: "Here the equalizing genius of the laws distributes property to every citizen." In other words, no rent to an absentee landlord or land ownership monopolies.

In their enthusiasm, the revolutionaries glossed over some of the enormous inequalities that existed in colonial society, the most obvious of which was the existence of slavery. "American society was not egalitarian and some individuals possessed impressive amounts of wealth," writes Huston. "An elite did exist, and much of its property had come from political favoritism, inheritance, or family connections." At the same time, their prescrip tions for addressing this inequality were overly simplistic. For in stance, the founders thought that eliminating the aristocratic land laws of entails and primogeniture would institutionalize relative equality. John Adams and Thomas Jefferson wrote confidently that America's land tenure system encouraged subdivision and a broader distribution of land ownership, preventing aristocratic concentrations of ownership. Our nation's founders were blind to some of the inequalities in their midst. But our national creed -- with its aspiration to greater equality and suspicion of accumulated wealth and power -- was forged at the time of our nation's independence.

Economic historians have caricatured American economic thought as a conflict between Jeffersonian democratic egalitarians and Hamiltonian free market capitalists. But as historian Joseph J. Ellis observed, "the projection of their debate as the archetypal dialogue in American political culture has become a historical cartoon." In reality, both of these "founding brothers" shared a concern for balancing an unjust concentration of political power with liberty and free enterprise. Hamilton was more enamored With concentrations of economic power because they capital, or the "synergy of aggregated investment." Yet both Hamilton and Jefferson shared a rejection of the aristocratic economic system that allowed a few people to appropriate the fruits of labor of others, resulting in an unjust accumulation of property and wealth. The revolution never resolved this tension between economic freedom and democracy; rather it "contained the explosive energies of that debate within an ongoing argument that was eventually institutionalized in political parties and built into the fabric of our national identity." This balancing act lived within the republican consensus, a worldview that was to last almost 125 years.

Democracy, Charity, and the Economy: Minnesota's Stake in Estate Tax Reform
A Dialogue with Bill Gates, Sr. and Chuck Collins

On Minnesota's Council of Non-Profit website, October 22, 2003

On October 22, Bill Gates, Sr. and Chuck Collins joined MCN to discuss the important role that the estate tax plays for our democracy, our economy, and our society. Their conversation highlighted the devastating impact that repeal of the estate tax would have on charitable giving, and two recent reports by the Urban-Brookings Tax Policy Center and OMB Watch, which further document this research.
Their new book: Wealth and Our Commonwealth: Why America Should Tax Accumulated Fortunes is available at United for a Fair Economy

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

A Fair Payment for War
By William H. Gates Sr. and Chuck Collins

Tuesday, March 25, 2003; Page A09 Washingtonpost.com

Last week we saw something unprecedented in American history: a push for tax cuts targeted to the wealthy in a time of war. As U.S. jets prepared to bomb Baghdad, Sen. Jon Kyl (R-Ariz.) offered an amendment to the federal budget legislation accelerating the repeal of the estate tax. It is a provision that would benefit less than 2 percent of the wealthiest taxpayers. It passed by a narrow vote of 51 to 48.

There is something unseemly about Congress's obsession with repealing the estate tax, the nation's most equitable tax on accumulated wealth, at a time when life and death are at stake. The American history of estate and inheritance taxes is wound together with mobilizations for war. The first federal tax on wealth was levied in 1797, as our country was faced with the escalating costs of responding to French attacks on American shipping.

During the 19th century, federal revenue came primarily from excise taxes and tariffs. Income and estate taxes were imposed only in revenue emergencies, during the Civil War and the Spanish-American War. Wartime taxation, or the "conscription of wealth," was perceived as equitable at a time when many citizens were sacrificing their lives, sometimes as soldier proxies for wealthier citizens.

The 1916 estate tax was a fundamentally American response to the excessive inequalities of the Gilded Age and reflected the country's need to move beyond reliance on the regressive tariff and excise taxes as primary sources of government revenue. Yet it was given a tremendous push by the U.S. entry into World War I and the need for wartime funds. Even after the war, businessman Harlan E. Read argued in his book "The Abolition of Inheritance" that war debts should be paid off with heavy taxes on inherited wealth.

In order to pay for World War II, the income tax was broadened to many lower-income households. In 1942 Irving Berlin wrote a patriotic song called "I Paid My Income Tax Today" to mark the unprecedented tax collections. One verse went: "You see those bombers in the sky, Rockefeller helped to build them, so did I." President Franklin D. Roosevelt understood that national unity against Hitler depended on a sense of shared sacrifice, by both Rockefeller and Rosie the Riveter.

Top income rates were boosted, and the estate tax was increased so that fortunes exceeding $50 million would be taxed at 70 percent. FDR spoke out boldly against war profiteering, saying, "I don't want to see a single war millionaire created in the United States as a result of this world disaster."

Today the lives of some of our citizens are at risk. Others are feeling the pain of the recession, losing their jobs, savings and security. State and local governments, facing the worst budget cuts since World War II, are laying off workers and cutting education spending, children's health care and basic human services.

Rather than facing these problems and appropriating the money to resolve them, congressional leaders are using the diversion of war to pass a tax cut for the wealthy that would exacerbate budget shortfalls at all levels. While the public's attention is riveted on Iraq, the Senate acts to accelerate the repeal of the progressive estate tax.

At a time when states need $70 billion in federal aid to close their deficits, federal priorities seem to be very different. Will the costs of war be paid by reductions in spending, mostly affecting our most vulnerable citizens? Will there be clear domestic economic winners and losers in the conduct of this war?

Political scientist Michael Lipsky observed a year ago that this war "will evidently exacerbate the divide between rich and poor." Wars have had this effect on the United States before, but absolutely without precedent is a push for a windfall tax cut for the wealthy as wartime expenses mount.

William H. Gates Sr. is co-chairman of the Bill and Melinda Gates Foundation. Chuck Collins is co-founder of Responsible Wealth. They are the authors of "Wealth and Our Commonwealth: Why America Should Tax Accumulated Fortunes."

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 with religious groups working on economic and social justice.

"UFE does the best work in the country on the gap between rich and poor, which is, for many of us in the religious community, a fundamentally moral and biblical issue," says Jim Wallis, the leader of Call to Renewal, a nationwide federation of faith-based organizations working to overcome poverty.

Collins became UFE's first employee, initially as a part-time second job. UFE now has eighteen employees and runs campaigns across the nation. Two years ago Collins hired an executive director to free him to do what he loves most — programs that inspire people and make them laugh.

"Our forte is street theater-it's the most accessible, funny, engaging way we've found to connect with people," he says. "It's so spiritually uplifting and fun to get a message across with humor, rather than grimness. And it cracks open minds."

When another attempt at permanent estate-tax repeal came up for a vote in Congress last summer, Collins and ten other UFE activists posed as Millionaires for Unlimited Inheritance. Dressed in top hats and tuxes or fur stoles and gowns, they took a stretch limousine to U.S. Senator Susan Collins's office in Bangor, Maine, to "celebrate her courageous step" supporting the bill. "We called out, 'She really understands us. We love Susan Collins.' It was very embarrassing for her," says Chuck Collins, who is not related to the senator. "Only twenty-four people in Maine each year would benefit from the tax cut. It's so out of synch with Maine sensibilities." This spring UFE "millionaires" are continuing to stage actions in a handful of swing districts on estate-tax repeal across the country.

Collins's favorite kind of theater action is what he calls media hijacking. In 1998, Collins noticed a Wall Street Journal item announcing that U.S. Representatives Dick Armey and Billy Tauzin were planning to dump a copy of the multivolume federal tax code off the Boston Tea Party Ship as an April 15 publicity stunt.

So two UFE activists with a baby doll rowed alongside the ship in a small plastic "Working Family Life Raft," yelling, "Don't throw it. You'll drown us." Other UFE staffers had gotten aboard the ship and were chanting, "Sink 'em with the flat tax. Drown 'em with the sales tax." Collins was passing out press releases on a nearby bridge. With their media advisers running amok, the flustered congressmen heaved the trunk of papers overboard — and the lifeboat capsized. The event got plenty of publicity all right, but not the kind the congressmen had planned. "All it took," Collins says, "was a $7 raft, good timing, discipline, and creativity."

United for a Fair Economy urges individuals and groups to create their own actions and has published The Activist Cookbook, loaded with "recipes" and encouragement for the timid. "Art isn't something that rich people do with their leisure time-it's something working people do with their lives," the cookbook exhorts.

One tactic UFE recommends is to introduce stockholder initiatives, which anyone who owns $1,000 of stock in a company can do. Collins holds a small amount of General Electric stock, and every year he introduces an initiative to reduce the top five executives' pay. The first time Collins went to GE's stockholder meeting, he happened to follow a nun demanding that GE clean up its toxic waste in the Hudson River. Angered, Jack Welch, who recently retired as one of the ten highest-paid CEOs in the country, sarcastically asked where she wanted him to put it — in Yankee Stadium?

When his turn came, the quick-witted Collins began, "As a Red Sox fan, I kind of like the idea of putting toxic sludge in Yankee Stadium." That got everyone laughing. Then he held up a dinky replica of another national icon to drive his own point home: "If the Washington Monument was the average CEO's pay, then this 21-inch replica would be the average worker's pay. But at GE, this Life Saver would be the average worker's pay." Again, everyone laughed at the absurdity, then listened as he explained how large disparities between executives' and workers' pay undermine the health of "our company" and the beneficial spirit of team building.

As an executive in his own organization, Chuck Collins rides his bike or takes the subway to work from his half of a two-family house in Boston's Jamaica Plain neighborhood, which draws young political activists and immigrants alike. With lightly salted dark hair, he dresses for the office in comfortable cotton shirts and denim and carries a reusable coffee mug. His six-year-old daughter attends Boston public schools.

His wife, the Rev. Patricia Brennan, now serves as assistant minister of the King's Chapel in Boston. The son of early members of the Emerson Church Unitarian Universalist in Troy, Michigan, Collins teaches church school and started the social-justice committee at the First Church Unitarian Universalist in Jamaica Plain, and is a trainer for workshops sponsored by Unitarian Universalists for a Just Economic Community. At the 2001 General Assembly in Cleveland, Collins introduced the resolution that resulted in economic globalization being chosen as the denomination's Study/Action Issue — and was taken by surprise at the floor fight he had to lead to win approval.

Collins moves easily among people of all classes — from his close friendship with an immigrant single parent; to his parents and their friends; to the members of Responsible Wealth; to the intense, smart political activists he works with and trains; to high-level politicians and power brokers across the country. On the sidewalk outside his downtown office he greets the first black woman Episcopal bishop and a doctor who has been treating the homeless on Boston Common for decades.

"Chuck is a phenomenon, a lovely, decent human being," says UFE cofounder Mike Miller. "He has a rare combination of amiability and talent, which you don't often find, unfortunately. It's a magnetic quality, so soft spoken and quiet, that attracts people. I consider him a real treasure."

Over time, Collins has become increasingly closer to his father. Both say their relationship now focuses on their many similarities, especially their get-mad-and-do-something-about-it view of the world. And both relish a good political argument, which often forces them outside to spare other family members. "His influence on me has been as significant as perhaps mine on him," Edward Collins says. "I'm quite proud of Chuck. He has changed many views within our family."

Collins rarely thinks about the fact that he gave away his birthright. Many of his friends and colleagues don't even know about it. When interviewed for this article, Bill Gates Sr. said he knew Collins came from money but had no idea that he'd given it away. "I'm sorry I don't have a comparable story to tell," Gates adds.

If Collins had to pick the label that best describes himself today, it wouldn't be Gandhian, Christian, or Marxist, but rather "radical meritocratist," a term coined by Andrew Carnegie in his book The Gospel of Wealth. The term describes someone who believes that each generation should "have to start anew with equal opportunities . . . [that would] bring the best and the brightest to the top."

Yet, for those who might follow Collins's example, there remains this stumbling block, the same one his father raised two decades ago: What if his children or grandchildren or great-grandchildren had a costly need? What if he needed expensive care in the future? Wouldn't it be hard to justify burdening his own heirs when he was the one who gave the money away?

"I still think about these kinds of questions all the time," he admits. "My yardstick has always been: Am I going to have special privilege in relation to this problem? Those choices continue — do we set up a college fund, or do we work to build a society where it is not an overwhelming privilege to have a college education, and you don't have to be in debt for the next twenty years. Every day I make at least five little choices — do I take the subway or car? Do I go to the library or bookstore? Do I send my daughter to public or private school? Do you build a wall of money around your life to protect yourself, or do you invest in the commonweal? You can't be too rigid or ideological. So you put money in a college fund and give to the United Students Association so they can work toward making tuitions lower.

"I want to cast my lot with everyone else I know," Collins avows. "I would rather work for a society where people take care of each other and not one based on whether you can amass a small fortune to provide basic care. I'm working toward a time when the idea that I can drive as big a car as I want, use up as many resources as I want, just think about my kid and nobody else, will be unimaginable. I believe you shouldn't have to be rich to have a decent life in this society."

Essayist and journalist Kimberly French is a frequent contributor to the UU World.

Tax the Rich?
William Gates Sr.—whose son is Microsoft founder Bill Gates—joins with co-author Chuck Collins to argue that the wealthiest among us have an obligation to pay their fair share.

In the last several years, Congress has debated whether to eliminate the federal estate tax—or "death tax"—our nation's only levy on accumulated wealth. The paltry debate over elimination of the tax has not grappled adequately with the negative consequences of repealing the estate tax.

One hundred years ago, during the first Gilded Age, we had a rigorous debate about the dangers of concentrated wealth in a democracy. The debate over the estate tax goes to the heart of the question of "what kind of country do we want to become" and ethical questions about society's claim upon the accumulated fortunes of the wealthy.

Ten years ago, a number of wealthy families—including the heirs to the Mars and Gallo fortunes—began bankrolling a campaign for wholesale repeal of the tax. Instead of revealing the true beneficiaries of repeal—households in the top 1 percent of wealth holders—they put forward a media campaign representing farmers and small-business owners as injured parties to the tax. Much of this mythmaking, however, has obscured the dangerous impact of eliminating the tax.

Proponents of repeal argue that the estate tax is un-American, that it punishes success and discourages parents from passing on wealth and businesses to their children. They successfully included elimination of the estate tax in President Bush's Tax Relief Act of 2001, through which the estate tax would gradually be phased out and then repealed for one year in 2010. Now repeal advocates are pressing to permanently eliminate the estate tax.

WHY PRESERVE the estate tax? The tax generates substantial revenue to pay for government. These funds are raised from those most able to pay—households in the richest 1 percent. Between now and 2009, the amount of wealth exempted prior to paying the tax will rise to $3.5 million. Based on recent IRS data, that means that only about 6,000 estates a year will pay the tax, with an average estate valued at more than $21 million. Eliminating the revenue from the estate tax will shift the tax burden off those most able to pay onto everyone else or lead to cuts in services for those most in need.

Many states have state-level inheritance or estate taxes that are linked to the federal estate tax. Repeal of the federal estate tax may lead to a severe drop in revenue for states—an estimated $5 billion—at a time when they can ill afford the loss. Almost every state in the country is grappling with severe budget deficits and many are cutting lifeline social programs for low- and middle-income people.

The estate tax serves as a catalyst for charitable giving. Many people give to their religious congregation, community organizations, and other charities regardless of the tax advantages. But evidence suggests the estate tax encourages wealthy households to give even more, particularly households with wealth higher than $20 million. Bequests motivated by the estate tax go toward creation or capitalization of foundations, medical and research organizations, and religious organizations. A U.S. Treasury Department report estimates that charitable giving will drop by $6 billion a year without an estate tax incentive.

The estate tax is part of our country's historic response to excessive inequality. The American experiment is rooted in a suspicion of concentrated wealth and power and in the rejection of aristocracy. The estate tax was established in 1916 as a populist response to the excesses of the Gilded Age. At a time when the gap between the very rich and everyone else is once again at historic levels, it seems un-American to eliminate the one tax that discourages the build-up of dynastic wealth holdings.

SOCIETY HAS AN enormous claim upon the fortunes of the wealthy. This is rooted not only in most religious traditions, but also in an honest accounting of society's substantial investment in creating the fertile ground for wealth-creation.

One of the dominant myths of our time is the "great man" theory of wealth creation—the notion that one's individual success is rooted entirely in one's own effort. You can hear these sentiments in debates over taxes: "I made this money on my own" and "The government has no right to my money." It is important to affirm and celebrate the role of the individual in the creation of wealth and successful enterprises. One significant reason that some people accumulate great wealth is through their hard work, creativity, tenacity, and sacrifice. Individuals do make a difference.

Yet it is equally important to acknowledge the role of a wide variety of influential factors such as luck, privilege, other people's efforts, and society's investment in the creation of individual wealth. The notion of a "self-made millionaire" or "I made this money without any help" is hubris. It is an example of extreme individualism that runs counter to ethical and religious traditions.

Judaism, Christianity, and Islam all affirm the right of individual ownership and private property, but there are moral limits imposed on absolute private ownership of wealth and property. Each tradition affirms that we are not individuals alone but exist in community—a community that makes claims upon us. The notion that "it is all mine" is a violation of these teachings and traditions.

In the Jewish tradition of tzedakah, owners of property are required to care for those in need. This is not a matter of charity or choice—it is an obligation. Individual wealth is provided by God, observes business ethicist Meir Tamari, and it is not meant only for the needs and wants of the private owner but is also meant to be used to satisfy the needs of the poor. Tamari believes society acquires a property right in the wealth of the individual to provide, through compulsory acts of taxation, the social and charitable needs of its members.

The moral basis of welcoming and providing for the stranger is in the Hebrew people's experience of being strangers and slaves in the land of Egypt. This memory acknowledges that the Hebrew people would still be oppressed and in Egypt but for the grace of God. The notion "this is all mine" is inconsistent with Jewish law and may be the sin related to the mark of the "people of Sodom." Tamari observes, "The Sodomite view of absolute private property rejects any obligations to assist others, which is contrary to the Jewish concept of limited private-property rights."

THE MUSLIM APPROACH to charity includes zakat, a compulsory component, and sadaqa, voluntary giving. Zakat is rooted in the individual's obligation as a member of a community. The prophet Muhammad wrote, "Like the organs of the body, if one suffers then all others rally in response." Joseph Singer, author of The Edges of the Field: Lessons on the Obligations of Ownership, notes that zakat "represents the unbreakable bond between members of the community." Since all wealth is owned by God and held by humans in trust, owners of property are not allowed to consider their interests alone.

This notion is similar to the principle of stewardship in the Christian tradition. Riches are granted as a gift from God and humans are expected to be responsible stewards of this wealth, including sharing it with those less fortunate. Author and Harvard professor Peter J. Gomes notes, "Upon those who have wealth, there is a burden of responsibility to use it wisely and not only for themselves." The wealthy must be "generous in proportion to their wealth" because "to whom much is given much is expected."

The Catholic bishops have reiterated the notion that there is a "social mortgage on capital"—another way to express society's claim. They affirm the importance of private property and ownership as opposed to statist or collectivist approaches. Yet they balance fundamental American aspirations of freedom and obligation with society's claim on capital.

Support of private ownership does not mean that anyone has the right to unlimited accumulation of wealth. Private property does not constitute for anyone an absolute or unconditioned right. No one is justified in keeping for her exclusive use what she does not need, when others lack necessities. In the American bishops' pastoral Economic Justice for All, they noted, "[Owners and managers] have benefited from the work of many others and from the local communities that support their endeavors." Pope John Paul II, in the encyclical On Human Work, wrote that capital "is the result of work and bears the signs of human labor." Those who have labored hold a claim to accumulated wealth and capital.

AS AMERICANS we are more inclined to enshrine individual success and undervalue these other components in wealth building. But for the good of the country, we need to better account for the true origins of wealth and success.

Consider the many components of the social framework that enables great wealth to be built in the United States: a patent system, enforceable contracts, open courts, property ownership records, protection against crime and external threats, public education, and so on. Even the stock market is a form of society-created wealth, providing liquidity to enterprises. When faith in the system is shaken, as in the last year, it is clear what happens to individual wealth.

This is a matter that goes beyond the discussion of the estate tax. We must recognize that society has a legitimate claim upon the wealth of the wealthy. It is not simply a matter of charitable giving to institutions that have made a difference to us, such as schools and libraries. It is also an obligation to pay taxes, to pay for the public institutions that foster equality of opportunity, and to give others the opportunities that we've had. It goes to the heart of how we think about ourselves, as individuals and as a society.

Society's claim on individual accumulated wealth is a fundamentally American notion, rooted in recognition of society's direct and indirect investment in an individual's success. In other words, we didn't get here on our own.

William Gates Sr. is co-chair of the Bill and Melinda Gates Foundation. Chuck Collins is co-founder of United for a Fair Economy and Responsible Wealth. They are co-authors of Wealth and Our Commonwealth: Why America Should Tax Accumulated Fortunes (Beacon Press, January 2003). To learn more about the estate tax, contact the Campaign to Preserve the Estate Tax, United for a Fair Economy, 37 Temple Place, 2nd Floor, Boston, MA 02111; www.responsiblewealth.org.

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Bad for Democracy

"We believe that permanent repeal of the estate tax would be bad for our democracy, our economy, and our society. Repealing the estate tax, a constructive part of our tax structure for 85 years, would leave an unfortunate legacy for America's future generations."

—from "A Call to Preserve the Estate Tax," a 2001 statement signed by more than 1,200 prominent business leaders and high-net-worth individuals—people who would likely pay the tax.

Long Live the Estate Tax!
Instead of taking steps that would strengthen our democracy, we're heading backward to the wealth inequalities of a century ago.

By Chuck Collins and Bill Gates, Sr.. Posted February 3, 2003 at The Nation and Alternet.org.

There is a stunning disconnect between the terrible budget shortfalls facing states and localities and the priorities of federal tax-cutters. States face budget deficits of more than $60 billion for the coming year -- and the ax is falling on mental health, education and children's healthcare. Libraries are being shuttered, tuitions increased and parks closed. Governors of all political persuasions talk about the need for massive federal relief to the states in the form of block grants and Medicaid subsidies.

Yet the President and Congressional tax-cutters are marching ahead with a $670 billion tax cut that could include elimination of dividend taxes and an acceleration of 2001 tax rate cuts. According to the Urban Institute-Brookings Institution Tax Policy Center, 42 percent of the benefits of the dividend tax cut will go to the richest 1 percent of taxpayers, whose incomes are above $330,000. These proposals have more to do with rewarding campaign contributors and lobbying patrons than with economic stimulus.

Also at the top of the domestic agenda is the push to make repeal of the federal estate tax permanent. Such a step will not have any short-term or long-term economic stimulus effect. But cutting $850 billion in revenue in the decade after the tax is phased out -- money that would have been collected from the heirs of multimillionaires -- will prolong the current fiscal crisis. Many states will feel the pain of revenue loss first because their inheritance and estate taxes are linked to the federal levy.

Today, the estate tax affects less than 2 percent of the richest households, those with wealth exceeding $1 million. A reformed estate tax, with wealth exemptions boosted to $3.5 million, would still generate tens of billions of dollars of revenue a year. Under such a reform, an estimated 6,000 estates a year, averaging $17 million each, would pay the tax. In Maine, Montana, Alaska and Mississippi -- states where both senators have voted to completely eliminate the tax -- the estimated number of estates paying the tax every year would be fewer than 25.

Proposals to reform the tax have been blocked since 2000 by the "all or nothing" repeal lobby, which understands the peril of not having smaller estates as camouflage. Once exemptions rise above $3 million, it becomes impossible to find a credible and photogenic farmer or restaurant owner who will complain about what opponents call the "death tax." It's hard enough to find them now. The pro-repeal American Farm Bureau was asked to produce an example of a farmer who had lost a farm because of the estate tax. It could not identify a single one.

Lost in this debate are the benefits to our country of maintaining an estate tax. Originally passed in 1916, the estate tax was a fundamentally American response to the excesses of the Gilded Age. Populist reformers labored for three decades before 1916 to pass federal income and estate taxes in order to shift the tax burden, mostly in the form of 19th century tariff duties and excise taxes, off of Midwestern and Southern farm states and onto the wealthy Northeastern states. But underlying the movement for an estate tax was a recognition that too much concentrated wealth and power were putting our democracy at risk. We had fought a revolution to reject hereditary political and economic power -- and the dizzying inequalities of the Gilded Age violated a fundamental American ideal of equality of opportunity.

We are now in a second Gilded Age. Instead of taking steps that would strengthen our democracy, we're heading backward to the wealth inequalities of a century ago. We need to preserve the estate tax in states and at the federal level for exactly the reason it is under assault. In a democracy, we should be offended when the power of concentrated wealth brazenly attempts to shape the terms of policy debate and dictate the rules of our society.

Bill Gates Sr. is co-chair of the Bill and Melinda Gates Foundation; Chuck Collins is co-founder of United for a Fair Economy and Responsible Wealth. They are the authors of "Wealth and Our Commonwealth: Why America Should Tax Accumulated Fortunes" (Beacon). For book tour schedule visit Responsible Wealth.

Bill Moyers Interviews Bill Gates, Sr. and Chuck Collins Transcript on PBS.org: 1.17.03

BILL MOYERS: Conservatives call it the death tax. Lawyers call it the estate tax. I grew up hearing it called the inheritance tax. And therein lies a story of wealth and power.

After a 10-year campaign hatched by a small group of wealthy families, Congress repealed the tax in the year 2000. Their crusade climaxed with a PR campaign that made it seem the estate tax was about to kill off the family farm.

The law repealing the tax was delivered to the White House on a bright red tractor but President Bill Clinton wasn't buying. He vetoed the bill and the estate tax continued. No sooner had George W. Bush reached the White House, however, than he made repeal of the tax a big priority and Congress of course was happy to oblige. The day after he signed its repeal the President was out in Iowa talking about it.

[CLIP OF PRESIDENT BUSH SPEAKING IN IOWA]

But the story doesn't end there. There's a campaign to restore the inheritance tax. And it's being led, believe it or not, by some of the country's richest people including Bill Gates, Sr., the patriarch of the Gates family who heads the Bill and Melinda Gates Foundation, and Chuck Collins, an heir to the Oscar Meyer fortune who founded the organization called Responsible Wealth.

They've written this new book arguing for the inheritance tax. It's called WEALTH AND OUR COMMONWEALTH. And they're here to talk about it with me now. Thank you very much.

True or false: many family farms must be sold off to pay for the Federal taxes due on them when the owner dies.

COLLINS: That's false. A number of investigative reporters have gone out to the midwest, they even went to Iowa, and they asked the American Farm Bureau, one of the proponents of repeal, to produce a single example of a farm that had been lost to the estate tax and they could not find one.

And they...the president of the Farm Bureau even sent out an urgent e-mail across the country saying, please, send us examples -- but produced none.

MOYERS: What about that rancher or farmer on that red tractor that delivered the bill to the White House in 2000?

COLLINS: That's an interesting case, because that rancher from Montana, we looked up his name and we found that over the last five years he's received $450,000 in farm subsidies from us the taxpayers. We the taxpayers have been an enormous investor in the Cornwall Ranch in Montana.

MOYERS: That's his ranch.

COLLINS: We are...we're sort of joint partners if you will.

And when he passes that farm on upon his death, we think that the taxpayer should have a claim back on that. It's just, this notion that we did it all ourselves, that is the great big myth here. And that's not to dismiss individual efforts; it's more that we just don't look enough at the role that society plays in helping people create wealth.

MOYERS: True or false, Bill Gates, Sr.: the estate tax is a form of double taxation because you pay when the money is earned and again when you die.

GATES: Well, we do that all the time. You know, double taxation, or the elimination of double taxation, is not an axiom of tax law.

The cardinal example of course is the home I live in in Seattle. I've been paying taxes on that home for 40-some years, year in and year out. And that's not double taxation. We tax property, we tax it regularly. We tax transactions.

The passage of an estate from one generation is a transaction. And that's the proper way to look at it. It's in effect an excise tax. And we tax gifts, we tax sales, we tax transactions ...but that's not double taxation; that's just the way it works.

MOYERS: Why are you doing this? I mean, haven't you declared class war on yourselves in a sense?

GATES: Well, you know, it just...to my eye, it's just a question of fairness. It disturbs us, for example, that here we have a significant ingredient of the Federal revenue stream which people are taking away at the very time that our government is going to need revenue at a level that is unprecedented. We're talking about $200, $300 billion deficits now.

And the notion of repealing a tax in the midst of that situation leads inevitably to the proposition that some other tax is going to have to take its place.

MOYERS: And your case in the book is that if the wealthy don't pay their share, then working people have to pay a larger share.

GATES: That's it exactly.

MOYERS: But isn't it the problem you're up against, that is, that wealth is increasingly concentrated in the top one percent of this population and they're the ones making the largest and most consistent contributions to the political class, so you've got a system that is being...against what you're trying to do.

GATES: Bill, that's precisely true.

COLLINS: We should be concerned about the estate tax repeal precisely for the reason we have an estate tax, which is to prevent the wealthy and powerful from writing the rules and changing the rules of our culture and society.

MOYERS: Was there a moment of "a-ha!"? A moment when you said, I mean, you're a private man, a taciturn man. Was there a moment, though, when something happened that caused you to say, I've got to go public on this?

GATES: Well, actually there was. I was on an elevator in an office building in Seattle and I had a friend who was...I was not aware of, but a friend who had been working on this for some years in the Congress who made the statement to me, he said, Bill, I'm about to bring to fruit of many years of effort. I think the Congress is about to repeal the Federal estate tax.

And I felt as if I had been hit in the chest with a baseball bat. I just thought, oh, no! That is just ridiculous. So...

MOYERS: Why did you think it was ridiculous?

GATES: It's just such a fair tax. I mean, it's just such an opportune, appropriate time to have repaid from the people who have benefitted more than anyone else from the circumstances that this country makes available, from the conditions that make it possible to become....

There's nowhere else in the world, nowhere else in the world, that people can accrue the kind of fortunes that happen here. And that's because of the kind of country we have.

And the kind of country we have is a function of the taxes that we pay to provide security, we have a stable market, you can predict next week will be pretty much like the week before.

We have the most immense investment being made by our government in advancing businesses by supporting the enormous research industry that's going on in this country. And it's that piece of government expenditure that which has everything to do with the health and robustness of our economy.

COLLINS: We believe that people who accumulate great wealth also have been lucky, have had the benefit of growing up and living in the United States, and have benefitted from this enormous public investment.

One of our leaders in Responsible Wealth was standing next to President Clinton when he vetoed the repeal of the estate tax and he said, look, I grew up in New York City, I went to public schools and public libraries and museums. Someone else paid for those.

I went to a college; someone else paid for that. I went into the technology field, a whole infrastructure that had been built with public investment that someone else had paid for. I started a company and I hired professional people who had been trained through a subsidized education system. And I made $40 million. And you're telling me society doesn't have a claim on my wealth? You know...

MOYERS: You gave away much of your fortune, didn't you, when you were a young man?

COLLINS: I did when I was 26, and I...it partly was just out of this sense that I needed to make my own way, and that too much inherited wealth was actually maybe an impediment to my own...making my own way in life.

And I think we're a country that's better off when there's less great concentrations of inherited wealth and more real equality of opportunity where everybody can have a shot at the starting gate of life to make a difference.

MOYERS: Why shouldn't you be able to direct your money to where you want it to go in your will or however you want to do it? I mean, you earned it.

GATES: "You earned it" is really a matter of "you earned it with the indispensable help of your government."

You earned it in this