Taking stands on tax bill

LETTERS TO THE EDITOR

To the Editor:

I commend The Chronicle for providing strong coverage of Congressional proposals to repeal the estate tax, both in the front-page article “A Taxing Dilemma” and the opinion piece “Ducking Debate on Repeal of Estate Tax” in the July 27 issue.

Recent Senate and House votes to repeal the estate tax represent a cynical and well-orchestrated effort to eliminate the only progressive tax on wealth in the United States. This, at a time when we are experiencing disturbing trends in both the distribution of income and wealth that place us at the bottom of all advanced industrial societies. Despite the unprecedented run-up in our stock market, less than two-thirds of Americans own any assets and most wealth is held by the top 10 percent.

As Robert Kuttner wrote in a recent issue of The American Prospect magazine, we shouldn’t be surprised that those who stand to gain the most from repeal of the estate tax are also well represented among large campaign donors. To mask the estate-tax repeal as a potential stimulus to our “overheating economy,” as some have stated, is a flawed argument that does not stand up to close scrutiny. After all, only 2 percent of estates are subject to the tax each year. With the increasing cost of running political campaigns, could this be an election-year ploy to boost fund-raising efforts from a narrow yet powerful slice of the electorate?

It is highly disconcerting that the non-profit sector, and especially umbrella organizations such as the Council on Foundations and Independent Sector, have opted to avoid taking a position on this important and timely issue.

As The Chronicle reported, elimination of the estate tax could cost the U.S. Treasury up to $50-billion annually within 10 years, with no guarantee that a substantial portion of the lost revenue would be made up by increased charitable contributions by beneficiaries. Instead, lost government revenues might place additional pressures on the non-profit sector to meet the growing needs of impoverished Americans when the next economic downturn takes place.

Rather than plunder the U.S. Treasury, as estate-tax proponents propose, a portion of the proceeds from this highly progressive tax could be earmarked for programs that increase asset-building opportunities for the vast majority of Americans who haven’t had a chance to share in the proceeds of our booming economy. This would be a logical and highly defensible position for many non-profits to support given the positive long-run economic impact such an initiative could foster.

David Marzahl
Executive Director
Center for Law & Human Services
Chicago

To the Editor:

Pablo Eisenberg states that non-profit groups, particularly national non-profits, have been silent on the repeal of the estate tax.

The National Council of Nonprofit Associations has in fact taken a position in opposition to the repeal. As a membership-based organization, it was necessary to poll our members and seek their input and advice before we took any position. Once the analysis was done, our members were in agreement that the repeal of the estate tax will severely harm non-profits across this country.

Our opposition is based in part on our state associations’ awareness of the experience of thousands of local non-profit groups that serve those in need while helping to build and care for communities. These are the communities that stand to pay the price for the 1.9 percent of the wealthiest Americans who will benefit the most from the estate-tax repeal.

The underlying message of Congress’s repeal of the estate tax should be revealed for what it is: taking care of the wealthy at the expense of the poor. It is yet another step toward dismantling the role of government that provides safety nets when and where needed and stimulates economic development and growth that impact all in our society.

Audrey R. Alvarado
Executive Director
National Council of Nonprofit Associations
Washington

To the Editor:

Pablo Eisenberg is correct that repeal of the estate tax can be detrimental to the non-profit sector. But he mischaracterized the Council on Foundations’ reasons for not lobbying or advocating against repeal.

For all 51 years of our existence the council has had the practice, generated and endorsed by our members, of not supporting or opposing tax legislation that has a broad impact beyond the charitable field (such as major tax restructuring, or efforts to increase, decrease, or repeal income, gift, or estate taxes).

We do continue to commission and publicize research findings on the impact such major changes may have had on the charitable field, and we do take positions on tax legislation directly related to the charitable deduction and on other taxes that are directly applicable to the operations of foundations (such as the 1998 legislation that allows full-market deductibility of gifts of appreciated stock to private foundations).

I’m disappointed that Pablo attributed to the council some less-tasteful motives, without calling us to inquire.

Dorothy S. Ridings
President
Council on Foundations
Washington

Editor’s Note: Mr. Eisenberg did talk to an official at the Council on Foundations before writing his article.