January 9, 2003 | Read Time: 2 minutes
Wealth and Our Commonwealth: Why America Should Tax Accumulated Fortunes
by William H. Gates Sr. and Chuck Collins
The estate tax is a powerful incentive for charitable giving, write William H. Gates Sr., co-chairman of the Bill & Melinda Gates Foundation, in Seattle, and Chuck Collins, co-founder and program director of United for a Fair Economy and Responsible Wealth, in Boston. This book, which was written in response to federal legislation that phases out the estate tax, in 2010, argues that the impact on philanthropy is one reason to maintain the tax on the estates of affluent people.
According to Mr. Gates and Mr. Collins, contributions to tax-exempt organizations are the second largest type of deduction taken under the estate tax, after marital deductions. They cite 1997 data from the Internal Revenue Service suggesting that estates that were subject to the estate tax gave more than twice as much as those that were not. They note that approximately one third of foundation assets come from estate bequests.
Some proponents of the estate-tax repeal, including Paul Schervish, a professor at Boston College, argue that without the tax, people would donate more money as their wealth increases. Mr. Gates and Mr. Collins use the data that Mr. Schervish collected through interviews with wealthy people to suggest that the opposite is true: Given the chance to dictate where their money goes, the wealthy would give more to their heirs and less to the government and charities.
Mr. Gates and Mr. Collins also stress that the repeal of the estate tax would significantly reduce the amount of revenue available for government-financed programs that support nonprofit groups and help the people they serve, as well as increase economic inequities in the United States.
Read an excerpt of this book.
Beacon Press, 25 Beacon Street, Boston, Mass. 02108-2892; http://www.beacon.org; 166 pages; $25; ISBN 0-8070-4718-X
