From the New York Times, Page 1, David Cay Johnston, Seattle, February 14, 2001

Dozens of the Wealthy Join to Fight Estate Tax Repeal

Some 120 wealthy Americans, including Warren E. Buffet, George Soros and the father of William H. Gates, are urging Congress not to repeal taxes on estates and gifts.

President Bush has proposed phasing out those taxes by 2009.  But a petition drive being organized here [Seattle] by Mr. Gates' father, William H. Gates Sr., argues that "repealing the estate tax would enrich the heirs of America's millionaires and billionaires while hurting families who struggle to make ends meet."

The billions of dollars in government revenue lost "will inevitably be made up either by increasing taxes on those less able to pay or by cutting Social Security, Medicare, environmental protection and many other government programs so important to our nation's continued well-being," the petition says.

In addition to the loss of government revenue, the petition says, repeal would harm charities, to which many of the affluent make contributions as a way of reducing the size of their estates.

"The estate tax," it says, "exerts a powerful and positive effect on charitable giving.  Repeal would have a devastating impact on public charities."

Mr. Buffet, the Omaha investor who ranks fourth on the Forbes magazine list of the richest Americans, said in an interview that he had not signed the petition itself because he thought it did not go far enough in defending "the critical role" that he said the estate tax played in promoting economic growth, by helping create a society in which success is based on merit rather than inheritance.

Mr. Buffet said repealing the estate tax "would be a terrible mistake," the equivalent of "choosing the 2020 Olympic team by picking the eldest sons of the gold-medal winners in the 2000 Olympics.  We would regard that as absolute folly in terms of athletic competition," he said.

"We have come closer to a true meritocracy than anywhere else around the world," he said.  "You have mobility so people with talents can be put to the best use.  Without the estate tax, you in effect will have an aristocracy of wealth, which means you pass down the ability to command the resources of the nation based on heredity rather than merit."  ...

Among those signing it are Mr. Soros, the billionaire financier; the philanthropist David Rockefeller Jr., former chairman of Rockefeller & Company; Steven C. Rockefeller, chairman of the Rockefeller Brothers Foundation; Agnes Gund, a philanthropist whose family owns stakes in many companies, and Ben Cohen, a founder of Ben & Jerry's.

The petition says that "repeal of the estate tax would be bad for our democracy, our economy and our society," although its backers add that adjustments may be needed to help families passing down farms and small businesses.  "Let's fix the estate tax," the petition says, "not repeal it."

Estate taxes are assessed on the net worth of an individual at death.  There is no tax on the first $675,000, and under current law that exemption is to rise to $1 million by 2006.  (Farms and family businesses already enjoy the $1 million exemption.)

But amounts above that threshold are taxed at rates that begin at 37 percent and rise to 55 percent, the rate that applies to anything greater than $3 million.  The estates of fewer than 48,000 Americans a year -- 2 percent of annual deaths -- pay the tax.  Nearly half the total is paid by the estates of the 4,000 people who die each year leaving $5 million or more.

President Bush has made repeal of what he calls the death tax a part of his plan to cut taxes by $1.6 trillion over the next decade.  His plan would also repeal the gift tax, which applies to gifts of more than $10,000 a year per recipient and would permanently exempt from taxation all capital gains held at death.  ...