Copyright 2000 Phoenix Newspapers, Inc.
THE ARIZONA
REPUBLIC
July 24, 2000 Monday, Final Chaser
SECTION: OPINIONS; Pg. B7
LENGTH: 669 words
HEADLINE:
ESTATE TAX REPEAL VICTORY FOR RICH
BYLINE: DONALD KAUL, Tribune Media Services
BODY:
If you need further proof that the class war
in this country is over, consider the estate tax, or "death tax," as the
Republicans like to call it:
Last month, the U.S. House of
Representatives voted to repeal the federal tax on estates. The Senate recently
followed suit. Repeal is a Republican initiative, but a surprising number of
Democrats are joining up.
Even more surprising, however, is the fact
that, according to a Gallup poll taken last month, 60 percent of Americans favor
the repeal, even though only 17 percent think it would favor them personally
(and even they are kidding themselves).
Is that weird or what? Like it
or not, fellows, the class war is over; the rich guys won.
I don't know
how they've done it but they've managed to convince the great majority of the
American public that what's really wrong with our society is that we're being
too hard on rich people. This despite the fact that rich people are making out
as never before.
In 1976, for example, the richest 1 percent of American
families held 21.8 percent of the nation's net worth. In other words, a lot. By
1998, the last year for which we have figures, the top 1 percent had corralled
38.1 percent of our aggregate net worth. In other words, a lot more.
In
1988, the average chief executive made 40 times what his average employee made.
In 1998, it was 400 times more.
There are thousands of people around now
who literally have more money than they know what to do with. They don't own two
homes, they own four or five, all over the world. They don't have a private
plane; they have private fleets of planes, with a helicopter to take them to the
airport. Harry Winston, the high-end Fifth Avenue jeweler, reports a growing
market for engagement rings in the $150,000 to $1 million range.
These
are the people the working stiffs of the nation are worried about.
The
chief argument against the estate tax seems to be that it is unfair because it
is a tax on money that has already been taxed. For the most part, that's false.
If your wealth consists of stock or property that has appreciated during your
lifetime (as most wealth does), at the time of your death it will pass to your
heirs at its current value. In other words, no capital gains will be paid on
that increased wealth, ever. Not by you, not by your heirs. The estate tax is
the only tax levied on those earnings.
The second great argument against
the tax is that it forces the sale of many family businesses or farms. That's
false, too.
Only a small number of estates fall under the estate tax.
Ninety-eight percent go untaxed, because they're too small. Half of the total
money collected by the estate tax in 1998, for example, came from the 3,000
estates valued at $5 million or more.
The Democrats have proposed a
change in the tax that would exempt even more farms and business from the tax -
bringing the total of exempted properties to more than 99 percent - but the
Republicans are holding out for doing away with the tax altogether, a move that
would enrich only the offspring of their big-buck buddies.
The argument
that people should be able to pass on the fruits of their labors to their
children has a certain sentimental appeal, but it doesn't make much sense. Kids
with well-to-do parents are given a good start in life. They get good
educations. They are exposed to books, music and foreign travel at an early age.
They have their own computers. If they have problems - a reading disability
perhaps - they receive professional help. They should be able to make it on
their own.
Frankly, I think it's bad for them and bad for society to
take away their need to achieve. We prepare them for life; let them join the
battle.
President Clinton has promised to veto the repeal of the estate
tax ban. Last week he said:
"For us to repeal the estate tax before we
give tax relief to low-income working families ... is a huge mistake. It
reflects a wrong sense of priorities."
I hope he sticks to his guns.
Sometimes he doesn't.
LOAD-DATE: July 28, 2000
