On January 13, 2003, Responsible Wealth held a press conference on preserving the federal estate tax, which featured William H. Gates, Sr., the co-chair of the Bill and Melinda Gates Foundation, George Soros, chair of Soros Fund Management, Sen. Kent Conrad (D-ND), and Chuck Collins, co-founder of United for a Fair Economy.

On January 13, 2003, Responsible Wealth held a press conference on preserving the federal estate tax, which featured William H. Gates, Sr., the co-chair of the Bill and Melinda Gates Foundation, George Soros, chair of Soros Fund Management, Sen. Kent Conrad (D-ND), and Chuck Collins, co-founder of United for a Fair Economy.

Collins and Gates are the coauthors of the recently published Wealth and Our Commonwealth: Why America Should Tax Accumulated Fortunes. They will be continuing a book tour across the country during the next months.

Conrad made a compelling case for reform, and not repeal, of the estate tax. He pointed out that permanent repeal of the estate tax will cost over $740 billion during the decade from 2013-2022, just at the 2016 and 2017 tipping points of rapidly escalating deficits in the Medicare and Social Security trust funds as baby boomers retire. Countering the argument that the estate tax is double taxation, the Senator noted a study by professors at MIT and the University of Illinois that more than half of the value of large estates have never been taxed, since 56% of the value of estates worth more than $10 million consists of untaxed capital gains. The estate tax is the only way to tax that wealth and is an important part of our progressive tax code. A reasonable reform of the estate tax can be accomplished that will protect smaller estates or true “family” businesses and farms, while retaining the value of the estate tax and costing much less than repeal. Finally, Conrad warned that repeal of the estate tax would shift the tax burden to the rest of us and to our children who will inherit the deficits it would create. Conrad used a number of very helpful charts to illustrate his points.

Gates, whose estate will be subject to an estate tax, eloquently argued for the estate tax as the repayment of a debt owed by those who have become wealthy to the society that made their success possible. The estate tax is paid by a tiny percentage of people—under current law, in 2009, only 0.3% of estates will be subject to the tax. It is our most progressive tax and should be kept. Gates argued that the estate tax is a reasonable tax for the privilege of being an American in a system which has allowed some people to achieve great wealth.

Soros, whose estate will also be subject to an estate tax, argued that the estate tax is one of the least damaging taxes, since it only affects the very wealthiest. It doesn’t destroy the incentive to create wealth, it is good for social equality, and it encourages charitable contributions.

Permanent repeal of the estate tax is almost certain to be part of the legislative agenda this spring. Even if permanent repeal is not achieved, "reform" proposals may be attempted that would effectively negate the valuable purposes of an estate tax. The nonprofit coalition, Americans for a Fair Estate Tax, is opposing repeal and working towards a good reform of the estate tax that would protect family businesses and farms while still preserving the important benefits of an estate tax on state and federal revenue, charitable contributions and mitigating great concentrations of wealth. If you would like to join Americans for a Fair Estate Tax or want more information, please email estatetax@ombwatch.org.