Strengthening the Estate Tax to Strengthen the Country

In the December 17, 2009 Huffington Post editorial "Strengthening the Estate Tax to Strengthen the Country," Bill Gates, Sr. argues for strengthening the estate tax:

For eight years I have spoken to anyone who would listen about the importance of creating a strong estate tax, and there is no more critical time for action to be taken by Congress on this matter than now.

In a few days the Senate will break for their holiday recess and if they do not act the estate tax will disappear in 2010. The House of Representatives recently cast a 225-200 vote in favor of Rep. Earl Pomeroy's estate tax proposal, which makes 2009 estate tax law permanent, with a $3.5 million exemption ($7 million for married couples), and a 45% tax rate. If the Senate agrees, the result will still be a loss of $391 billion over 10 years, although that is better than no tax.

Letting the tax disappear entirely will be even more devastating and will cost upwards of a trillion dollars in lost revenue; revenue that supports vital public systems -- including transportation and energy infrastructure, education and healthcare -- that are the foundation of our broad-based prosperity and economic stability.

This is why I believe we must do more and strengthen this levy, which is our county's only tax on inherited wealth and applies to less than 1 percent of American families. The estate tax raises substantial revenue from those with the greatest capacity to pay.

If abolished or weakened, there are only three ways to make up the resulting shortfall: cut spending, raise taxes on the middle class, or pile it on to the national debt and leave it to our children and grandchildren who will inherit the consequences of the decisions we make now. This why I and thousands of other wealthy individuals have joined a campaign led by United for a Fair Economy to call on Congress to strengthen the estate tax.

A common, and misguided, criticism of the estate tax is that individuals who work hard and save their money should be entitled to pass on the fruits of that labor to their family. I am not against working hard, saving money, or taking care of your family.

However we must acknowledge that the person who accumulates wealth in this country was not able to do that independently. The simple fact of living in America, a country with stable markets and unparalleled opportunity fueled in part by government investment in technology and research (something my family has plenty of firsthand experience of), provide an irreplaceable foundation for success and have created a society which makes it possible for some men, women and their children to live an elegant life.

I attended the University of Washington under the G.I. Bill, and then became a lawyer enjoying a successful career that allowed me to provide well for my family so that they in turn were able to create their own wealth. So I believe that those of us who have benefited so greatly from our country's investment in our lives should be asked to give a portion of our wealth back to invest in opportunities for the future.

Society has a just claim on our fortunes and that claim goes by the name estate tax.

Wealthy Individuals Call On Congress to Strengthen Estate Tax

The December 14, 2010 press release "Wealthy Individuals Call On Congress to Strengthen Estate Tax Before Holiday Recess" by the advocacy group United for a Fair Economy announces a teleconference in which Bill Gates,Sr. and others argue for strengthening the estate tax:

BOSTON, Dec. 14 /PRNewswire-USNewswire/ -- As Congress prepares for the holiday recess, a group of wealthy individuals together with a national labor union, organized by United for a Fair Economy, are calling on the Senate to act before the break to strengthen the Federal Estate Tax. The tax will disappear for one year in 2010 unless Congress takes immediate action to either pass a one-year extension or a permanent estate tax. The U.S. House recently passed a bill that would permanently set the exemption level at $3.5 million per person ($7 million per couple), which would cost $234 billion over 10 years.

WHAT Teleconference: Need for strong Estate Tax

WHO William H. Gates, Sr., Co-Chair of the Bill and Melinda Gates Foundation

John C. Bogle, founder and retired CEO of The Vanguard Group

Richard Rockefeller, MD, family physician, Chair of the Board of Rockefeller Brothers Fund and great-grandson of John D.Rockefeller

Anna Burger, Secretary/Treasurer of Service Employees International Union (SEIU)

Lee Farris, Estate Tax Policy Coordinator, United for a Fair Economy

CALL-IN NUMBER 800-681-9883, Conference ID: 47047686

WHEN Tuesday, December 15, 11:00 am (1 hour)

SOURCE United for a Fair Economy

The Forbes 400: An Annual Survey of the Wealthiest People in the United States

The September 30, 2009 report of "The Forbes 400 Richest Americans" shows that the economic decline has affected even the wealthy:

Almost all of America's wealthiest citizens are poorer this year.

America's super rich are getting poorer. For only the fifth time since 1982, the collective net worth of The Forbes 400 — our annual tally of the nation's richest people — has declined, falling $300 billion in the past 12 months from $1.57 trillion to $1.27 trillion.

Faltering capital markets and real estate prices, along with divorce and fraud, pushed the fortunes of 314 members down and drove 32 plutocrats off the rankings.

Hurt the most: Warren Buffett, America's second-richest citizen. The Oracle of Omaha dropped $10 billion from his personal balance sheet as shares of Berkshire Hathaway fell 20% in 12 months. He is now worth $40 billion.

Beating out Buffett for the 16th straight year as America's richest man is Microsoft co-founder Bill Gates. Sluggish Microsoft shares and declining outside investments pushed the software visionary's net worth down $7 billion in 12 months.

Rounding out the top 10 on The Forbes 400: Oracle founder Larry Ellison ($27 billion); Wal-Mart heirs Christy Walton ($21.5 billion), Jim C. Walton ($19.6 billion), Alice Walton ($19.3 billion), and S. Robson Walton ($19 billion); media maven Michael Bloomberg ($17.5 billion) and energy titans Charles and David Koch ($16 billion each).

The 10 richest Americans lost a combined $39.2 billion in the past 12 months, a 14% decline.

Other big losers include casino mogul Kirk Kerkorian, whose nest egg shed $8.2 billion in the past year. Shares of his gambling giant MGM Mirage have fallen 90% from their October 2007 high.

Also hitting the brakes: Enterprise Rent-A-Car founder Jack C. Taylor. The rental car titan's fortune is down $7 billion in a year as the travel industry slows and private-company valuations fall.

The biggest gainer is banker Andrew Beal, who tripled his net worth to $4.5 billion buying up cheap loans and assets as the markets crumbled last fall.

Membership on the list was made easier as the price of admission dropped $350 million, from $1.3 billion last year to $950 million this year, paving the way for 19 new members and 19 returnees.

Newcomers to the list include Marvel Entertainment chief Isaac Perlmutter, whose net worth soared to $1.55 billion after Disney agreed to buy the superhero outfit in August for $4 billion in cash and stock.

Other new members include Bloomberg LP co-founder Charles Zegar ($1 billion), mapping-software magnate Jack Dangermond ($2 billion) and trading titan Steven Schonfeld ($1 billion).

Former New York lawyer and accountant Jeffry Picower makes his debut on The Forbes 400 with a net worth of $1 billion. A longtime investor with Bernard Madoff, he is likely worth billions more (Picower is alleged to have extracted billions of dollars from Madoff's fund before it collapsed).

Picower and his foundation are named in a lawsuit by the liquidator for Madoff's investment business, who is seeking to recover funds allegedly obtained through "fraudulent activity." Picower claims if he knew Madoff was a fraud he would not have transferred money into Madoff accounts.

In December 2008, the Picower Foundation shut down after losing its $1 billion endowment in Madoff's Ponzi scheme. The charity had given millions to MIT, Human Rights First and the New York Public Library. Picower made his first fortune selling medical device maker Alaris in 2004.

Among those returning is venture capitalist Michael Moritz, who rode Amazon's purchase of online shoe retailer Zappos and surging Google stock back onto the list.

Divorce forced Google exec Omid Kordestani from the rankings, while R. Allen Stanford lost his billionaire status when the feds froze his assets after charging him with allegedly running an $8 billion Ponzi scheme.

Several Forbes 400 mainstays also fell off the list, including former Citigroup czar Sanford Weill, mall developer Matthew Bucksbaum and condo kingpin Jorge Perez.

Six members died, including glass giant William Davidson and newspaper maven Frank Batten Sr.

The Forbes 400 is a snapshot of wealth on Sept. 10, 2009. Gap co-founder Donald Fisher, who ranks No. 296 on our list, died Sept. 27 at his home in San Francisco at age 81.