Advertisement - Click to support our sponsors.

Saturday, February 17, 2001

Some wealthy people
fight estate tax repeal

Bullet The issue: Repeal of the estate and gift taxes is opposed by dozens of wealthy Americans.
Bullet Our view: The opponents are correct in their contention that repeal would have undesirable effects.

DEMONSTRATING that they can transcend their own financial interests to further the public welfare, dozens of wealthy Americans are opposing efforts to repeal taxes on estates and gifts.

The contrast with the usual barrage of self-interested lobbying is striking. Their message deserves to be heard, and, because of their prominence, probably will be. About 120 of the ultra-rich have joined the movement, including billionaire investor Warren Buffett, financier George Soros, William H. Gates, father of Microsoft's Bill Gates, David Rockefeller Jr. and Ben Cohen, co-founder of Ben & Jerry's.

A petition drive organized by the senior Gates 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."

In addition to the government losing billions of dollars in tax revenues, which would hurt important programs, the petition contends that repeal of the estate tax would have "a devastating impact" on charitable giving.

Buffett, who has said he intends to give away most of his fortune upon his death, warned the proposed repeal of the estate tax would create "an aristocracy of wealth, which means you pass down the ability to command the resources of the nation based on heredity rather than merit."

Of course, many wealthy people take the opposite view.

One argument in favor of repeal, advanced by President Bush and congressional supporters, is that the estate and gift taxes discourage saving and investment. They can also force the dismantling of small family businesses and farms to pay taxes.

But any encouragement of savings and investment that repeal would bring is unlikely to have much effect at the highest income levels, where such incentives aren't needed.

Bush says his plan would save those now subject to estate and gift taxes $236 billion over the next decade -- a bonanza for the rich.

At present, the estates of 48,000 people -- 2 percent of annual deaths -- pay the estate tax. On average, 4,000 people die each year leaving $5 million or more, and their estates pay nearly half of the total revenue from the estate tax.

Although repeal would be a mistake, there is a need to raise the level of exemption. Under current law, there is no estate tax on the first $675,000, and the exemption is to rise to $1 million by 2006. Family businesses and farms already have the $1 million exemption.

That isn't high enough. The exemptions should be raised to at least $2 million to prevent the dismantling of small farms and family businesses.

Bush is wrong to seek repeal of the taxes, which makes him look like a tool of the rich. If he wonders why he's wrong, he can ask Warren Buffett and David Rockefeller.

Aristide’s return

Bullet The issue: Jean-Bertrand Aristide has begun a second term as president of Haiti.
Bullet Our view: The Clinton administration's efforts to relieve Haiti's poverty and promote democracy have failed.

JEAN-Bertrand Aristide is back for a second term as president of Haiti, but the hope that accompanied him after his first election is gone, along with the American troops who restored him in office in 1994.

Most foreign governments did not send official delegations to the inauguration last week and Ambassador Brian Dean Curran was the only American representative.

The boycott was a protest against the blatant rigging of elections.

Aristide, a Catholic priest with radical leanings who gained popularity by ministering to the poor, became the Caribbean island country's first freely elected president after the overthrow of the Duvalier dictatorship. He didn't last long in office -- only seven months -- before he was ousted in a coup and went into exile in the United States.

When negotiations with the generals for Aristide's return failed, President Clinton dispatched 20,000 troops to restore him to office. At the last minute the Haitian generals backed down and violence was averted.

Aristide lasted two years in the presidency before his term expired. Under the Haitian constitution, he could not succeed himself. He stepped down in 1996 in favor of his protege, Rene Preval.

Last November Aristide was re-elected with 92 percent of the vote. Opposition parties boycotted the poll, crying fraud, and foreign donors canceled $500 million in aid. The United States said it would send money only to non-governmental and private organizations.

Despite much talk of nation-building, the Clinton administration's efforts since 1994 to turn Haiti around have been a dismal failure. The country is shunned by the international community; foreign aid and investment have withered. Poverty, crime and corruption are as bad as ever.

The American troops -- including a contingent from Hawaii -- who were sent to Haiti were followed by 6,000 United Nations peacekeepers and a U.N. mission that tried to promote human rights, reform the judiciary and build an effective police force.

It didn't work. The United States pulled out the last of its troops a year ago and stopped payments on its share of the U.N. mission budget because of the flawed elections. The mission itself closed in November after its transport chief was dragged out of his car and killed by a mob.

The Clinton administration's experience in Haiti was an exercise in wishful thinking. Haiti's problems are too deeply rooted to be susceptible to a quick fix.

President Bush and his advisers, in formulating the new administration's policy on dealing with such stricken nations, should consider Haiti as a study of what mistakes to avoid.

Published by Liberty Newspapers Limited Partnership

Rupert E. Phillips, CEO

Frank Bridgewater, Acting Managing Editor

Diane Yukihiro Chang, Senior Editor & Editorial Page Editor

Michael Rovner, Assistant Managing Editor

A.A. Smyser, Contributing Editor

Text Site Directory:
[News] [Sports] [Editorial] [Do It Electric!]
[Classified Ads] [Search] [Subscribe] [Info] [Letter to Editor]

© 2001 Honolulu Star-Bulletin