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 ell,
catch Warren Buffett! He is worried that the estate tax might be
eliminated. Mr. Buffett, who is reported to be
the
fourth richest man in America, isn't going to wait for Congress
to take his advice to maintain the tax. He will do it himself! For
himself! He has told the awaiting world that he intends to leave
his own children only "a pittance." It is wonderful how, faced with
the current challenge, he can cope with such mature decisiveness
over his own affairs: give his children a pittance and leave the
rest of his estate to be taxed by the government. Indeed, he can
go further. One motive for his stand against the death tax is his
concern for private charities. Well, he can deed all of his
estate to private charity. Once again, he is demonstrating sovereignty
over his own affairs.
There is the problem that this does not satisfy him, not by any
means. He wishes not only to restrict his children to a pittance,
and to dispatch his earnings to the government and to private charity.
He wishes that others should do so. He wishes to make his preferences
a matter of law, enforceable even on others who have different priorities.
And he is not alone in the pleading to derail the movement to end
the estate tax. He is garishly accompanied by 120 of the super-
wealthy in America. They include: George Soros, who got there by
selling the British pound short a dozen years ago, without marked
concern for those poor people who held their savings in pounds they
thought durable in value; and without high scorn for government
policies whose fiscal and monetary policies had the effect of a
capital levy on everyone who
| “…there
are those who will be telling him that to eliminate the
estate tax on top of the general tax reduction is to dilute
the political appeal of his package.” |
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owned
a pound. Debauching the currency, Lord Keynes acknowledged, only
governments can do; David Rockefeller, protesting a return to the
tax code that gave the Rockefellers their great launch in life (Mr.
Rockefeller has been an exemplary citizen, with only the one reservation,
that he is often eager to contrive for government to appropriate
the savings of non-Rockefellers). Also William Gates the First,
who was wealthy even before William the Second conquered the entire
world. He is concerned that the elimination of the death tax would
do two things: straiten the returns of charities, and demoralize
nascent entrepreneurs. What this says is that if you leave a million
dollars to your son, you run the risk of extinguishing his acquisitive
energies. Instead of applying himself as a neo-capitalist, inventing
things and organizing people and generating great commercial ideas,
he will retire to his yacht and golf club and dissipate that acquisitive
exuberance without which we would not have a world with such in
it as Warren Buffett and Bill Gates.
A different view of things propelled Congress to pass last year
a measure to end the estate tax. That measure was endorsed by Republicans
and many Democrats, though not by enough to circumvent Mr. Clinton's
veto. The reasoning was based on several assumptions. One of them
was that estate taxes levy against property that has already been
taxed, a kind of double-jeopardy objection. A second was that in
order to pay the tax, beneficiaries are often required to dissolve
or dismember small enterprises, notably farms and businesses. A
third was that in order to avoid or mitigate the tax, people who
are subject to it reorder the closing years of their lives in such
a way as results in profligate spending and maladroit investments,
leaving heirs with less than such accumulations as might finance
investments that would increase the national product.
President Bush has the problem of priorities, to be sure. He has
his big tax-reduction plan, which seeks general mitigations, and
there are those who will be telling him that to eliminate the estate
tax on top of the general tax reduction is to dilute the political
appeal of his package.
This problem he could handle quite simply. A singular feature of
the estate tax is the Bolshevik reach of the tax itself. Uncle Sam
wants as much as 55 percent of the taxable estate dollar.
Fifty-five percent! Add state taxes, and you get taxes of over 60
percent, which is confiscatory stuff.
Mr. Bush could tell Congress that he reiterates his recommendation
to repeal the estate tax, but that pending other matters —
and with apologies for those who will die in the meantime —
he is prepared to settle for interim relief: Let the estate tax
be reduced to 20 percent. Maybe there would be some way around the
Constitutional prohibition against a bill of attainder, in which
case Congress could vote to keep it at 55 percent for Warren Buffett
and George Soros and, to avoid class distinctions, anyone else who
applies for that special privilege.
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