Posted on March 25, 2001


The Giving Dead

Extortion disguised as philanthropy


Daniel Clark


You almost have to feel sorry for liberal billionaires. No matter what they do -- no matter how many millions of dollars they donate to the trendiest environmental causes, population control organizations, and Democrat political campaigns -- they still have to beg for acceptance. They still have to deny or apologize for their own wealth, while helping to condemn the wealth of others.

Ultra-eccentric Ted Turner illustrated this in a recent letter to the USA Today, in which he argued against repealing the estate tax. Turner, who joins fellow liberal multi-billionaires Bill Gates, Warren Buffett and George Soros in this cause, concludes, "Let's skip another tax cut for the super-rich. Believe me, they don't need it." What a creative use of a third person pronoun.

Ted's humble home

Race-baiters often find refuge in claims that they somehow symbolically belong to minority groups (e.g., Bill Clinton as "America's first black president"). Likewise, the tone of Turner's letter positions him as an honorary "working family," in opposition to the "priveleged few."

In the context of the debate over estate taxes, Turner defines the "super-rich" as anyone whose estate is worth at least 5 million dollars. (This is a partial concession, since the current threshold used in implementing the tax is $675,000.) Let's put this in perspective. A business or farm with a total value of $5 million does not translate into a $5 million salary. The value of such a large business is usually the result of its owners' repeated reinvestments into it over a period of many years. The amount invested annually would be a far lesser amount, and annual net profits would be only a fraction of that.

It is common these days, by comparison, for major league baseball players to be paid more than $5 million each year. Some of them even make twice that much. Turner's team, the Atlanta Braves, had a total team payroll of over $84.5 million in the year 2000, yet he presumes to tell the owner of a business with a net worth of $5 million that the government should take 55 percent of his estate, in order to assure that his children don't become too wealthy.

Defenders of the estate tax are trying to intimidate legislators into opposing repeal by emphasizing charitable donations, which Turner says are "encouraged" by the tax. Looking at how this is done, it becomes evident that the government's idea of "encouragement" isn't too different from a mobster's idea of "protection."

A person subject to the estate tax is "encouraged" to give to charity by the threat that, if he doesn't, his estate will be severely penalized. To put it another way, if he leaves his estate to his family, the government only allows them to keep 45 percent of it -- but if he leaves it to strangers, they get it all.

For the sake of argument, let's naively assume for a moment that this plan works just as advertised, and the tax proves immensely beneficial to charities that feed, clothe and heat lots of needy people. That still wouldn't justify it. A donation made under the threat of force isn't charity, it's extortion.

money being 'distributed' to the 'super-rich'

At any rate, the supposed social benefits of this tax are exponentially exaggerated. By design, donations made under this sort of duress are motivated not by compassion, but by a desire to elude the tax. As a result, such a donation typically takes the form of a self-serving legacy-building gift to a university or museum. Another option is to create a charitable foundation, named after the donor himself, with no distinct mission other than to maintain itself.

Grass-roots charities which help people in need see little benefit from the estate tax, because they would use up the money, so that nothing would remain for a donor's posterity. Remember, we're talking about money which otherwise would have been left to the donor's children, so there's a certain logic to the idea that, once diverted to charity, that money would be used to build some kind of monument.

Of course, there are also plenty of wealthy people who create foundations that do a lot of good, but those who do are self-driven, and gladly give their money to their favorite causes without the federal government stepping in and saying, "or else."

Anyone who believes that "encouraged" philanthropy is central to the defense of the estate tax would think that its advocates would be more than a little concerned about its actual results, but they're not. This is because charitable giving, even if unproductive, serves the true purpose of the tax, which is to remove money from the possession of "the rich." Turner admitted as much when he opened his letter by warning that, "A repeal of the so-called 'death tax' would consolidate wealth in the hands of a very few rich families." He later adds, "The growing gap between the super-rich and the middle class in the USA and around the world disturbs me."

This, the central concern of the estate tax, is illustrative of the mentality of those who argue that, when taxes are cut, "the rich get richer, and the poor get poorer." Their theory is that there is a finite amount of wealth in existence, so that when somebody acquires too much (however much that is), he must have unjustly taken it from someone who has too little. By this line of reasoning, a person's wealth is measured not by his income or standard of living, but only by what he has in comparison to someone else.

This is how liberals justify their claims that the poor got poorer during the Reagan administration. It's not true, of course; earnings rose substantially and income rates were cut for all income groups across the board. But -- the argument goes -- the "chasm" between the rich and the poor had grown, so the poor had become poorer in comparison to the rich.

Fidel: he ain't fraida no chasm

Adherents to the chasm theory are resolutely indifferent to the fact that it's been disproved. We can already see what a society is like where the chasm between rich and poor has been virtually eliminated. It's called Cuba. If it were the comparative wealth of the rich that made others poor, it would follow that poor Cubans must be much wealthier than poor Americans. In reality, though, people who are considered poor in the U.S. have a higher standard of living than those called "middle-class" in developed European countries.

The billionaires who are arguing in favor of the estate tax are trying to make it appear as if they're making a sacrifice by turning down a tax cut, but they're not the ones subject to the tax; their children are. Ted Turner will never live to see the government carve up his empire. However, he will, if the tax survives, watch it punish the families of some of his competitors.

What if somebody devised a way to implement the tax on Turner's estate while he's still alive, so that he'd have to pay the tax himself? Wouldn't it narrow the "chasm" if Turner had to sell off some of his assets to pay the tax? So maybe he'd keep CNN and its affiliated news channels, but Turner Classic Movies might have to sign off the air. Maybe he could keep the Braves, but would have to fold his hockey team, the Atlanta Thrashers. According to Chasm Theory, this would help the "poor" and the "middle-class" ... but how? By eliminating jobs, and reducing options for consumers?

Ironically, Turner now apologizes for contributing to overpopulation, by polluting the earth with five children ("...but I can't just shoot them now.") If he really believes that consolidation of wealth is such a serious problem, the global one-child policy he now advocates would only exacerbate it. The egalitarian thing for him to do would be to have even more children, and divide his estate equally among them. Sure, each of them would still be very wealthy, but nowhere near as "super-rich" as Ted. If, as the chasm theory assumes, possession of vast amounts of wealth is morally wrong, then it is Turner, Gates and the others, and not their progeny, who must be punished.

Hence this activism of theirs on behalf of the estate tax. These men know that liberal dogma dictates that they are evil, because they are rich. Their gloomy warnings about the concentration of wealth among "the super-rich" serve the function of establishing them as exceptions to the rule. It's their way of saying, "Don't hate us, fellow liberals. We're the good rich people."

Cleverly, they've devised a penance for themselves which is totally symbolic, and doesn't actually require them to pay a cent. If that doesn't demonstrate their credentials as good liberals, what will?


Correction: In October of 1996, Ted Turner sold Turner Broadcasting, which includes CNN, to Time-Warner. Being Time-Warner's largest shareholder, Turner remained president of CNN and vice-chairman of Turner Broadcasting, until his removal by chief executive Gerald Levin, shortly after the posting of this column. -- DC



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