The Estate Tax: Charitable Giving and Private Profits, Who Wins, Who Loses?
By Palmer Schoening, M.P.P and William Beranek, Ph.D
(Organization Trends, June 2012, PDF here)
Summary: The 2001 tax relief legislation provided for the phase out and termination of the federal estate tax in 2010. But Democrats in Congress revived it for 2011 and 2012. And if Congress fails to act before January 1, 2013, the Federal Estate Tax exemption will drop to $1 million and the rate will increase to 55%. Former Director of the Congressional Budget Office, Douglas Holtz-Eakin estimates that returning to a 55% death tax would cost an already jobs-thirsty America an additional 500,000 lost jobs. The most likely scenario this year is a one-year extension of the current tax (35% estate tax with a $5 million exemption) but Congress would be wise to repeal the tax completely. Repealing the tax will provide jobs, keep family businesses and farms intact, and increase charitable giving.
Leftist politicians who resent some Americans having more money than others want to tax those they label “the rich.” Rep. Jan Schakowsky (D-Ill.) is offended that “[i]n the United States today, the richest 1% owns 34% of our nation’s wealth” which, she says, is “more than the entire bottom 90% combined.” Unless the wealth of the rich is more heavily taxed, says Schakowsky, Americans will be forced to make one of two choices. “We can choose to cut education, job creation and health care, or we can choose to ask those who can contribute more to do so.”
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Bono Wants To Save The World: But He Needs Your Money To Do It
By Matt Patterson, Foundation Watch, April 2012 (available as PDF: FW0412)
Summary: Through his nonprofit ONE Campaign, the rock star Bono advocates Western aid to help impoverished people in Africa and elsewhere. Liberal advocacy groups have long argued that poor countries are helpless, that their governments are victimized by corporate exploitation, and their people are in need of help from Western governments and nonprofits. But these ideas are increasingly questioned and rejected. For all his good intentions Bono and ONE may be making bad conditions worse.
The rock star Bono wants us — the taxpayers of the West — to eradicate AIDS, cancel the debts of the developing world, and end world poverty. Born Paul David Hewson on May 10, 1960 in Dublin, Ireland to a mixed Protestant/Catholic family, the 17 year-old answered a “musicians wanted” post on a school bulletin board. Hewson and three others, all of them in their teens, formed a rock band. In time it became internationally known by the name “U2.” Rechristened with the name “Bono” by his band-mates, Hewson became the band’s lead singer.
U2’s star rose with a series of critically and commercially successful albums in the 1980s. Like many highly acclaimed and wealthy members of the entertainment industry, Bono began to lend his name and the prestige of the band to chic benefit concerts like Live Aid, the 1985 concert organized by musician Bob Geldof and dedicated to raising funds to fight famine in Ethiopia. By the end of the 1990s, Bono had fully entered the world of philanthropy.
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Warren Buffett: A Wealthy Philanthropist with Some Bad Ideas
By Martin Morse Wooster
In August, Warren Buffett, America’s second-richest man with $39 billion in assets, complained in the op-ed pages of the New York Times that his taxes were too low. “Last year my federal tax bill—the income tax I paid, as well as payroll taxes paid by me and on my behalf—was $6,938,794,” the CEO of Berkshire Hathaway wrote. “That sounds like a lot of money. But what I paid was only 17.4 percent of my taxable income—and that’s actually a lower percentage than was paid by any of the other 20 people in my office. Their tax burdens ranged from 33 percent to 41 percent and averaged 36 percent.”
Buffett demanded that Congress raise taxes on America’s millionaires and impose an additional surtax on those who make more than $10 million. “My friends and I have been coddled long enough by a billionaire-friendly Congress,” Buffett contended. “It’s time for our government to get serious about shared sacrifice.”
President Obama and Buffett, an ardent liberal Democrat, have known each other for some time. Buffett served on the presidential transition team for economic policy, and in 2010 the president gave him the Presidential Medal of Freedom, the nation’s highest civilian honor. Buffett’s grandson, Howard W. Buffett, spent a year and a half in the Obama administration as a staffer in the White House Office of Social Innovation and Civic Participation. He then worked for the Department of Defense promoting agricultural development in Iraq and Afghanistan.
Left-winger Pablo Eisenberg, senior fellow at the Georgetown Public Policy Institute, criticized Warren Buffett, who has pledged to give away at least $37 billion, for not giving away more of his fortune immediately.
Buffett recently “confirmed that he was paying off a $50-million pledge he made in 2006 to develop an international nuclear-fuel bank to prevent the spread of atomic bombs,” Eisenberg wrote in a Chronicle of Philanthropy op-ed, “Why hasn’t he donated an equal or greater amount for programs to aid the hungry and homeless in America?”