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Commentary :: Politics : Social Welfare
Millionaires and War
02 Jul 2005
Was there ever a time when Congressional tax cuts for multi-millionaires were more unseemly?

Recently President Bush spoke about the war in Iraq on national TV, asking Americans to be patient and to bear in silence the heavy sacrifice of American soldiers’ lost lives. That number is getting close to 2000.
Almost 60 percent of Americans disapprove of the way Mr. Bush has handled the war.

In 2001, when terrorism czar Richard Clark was trying to get high-ranking Bush administrators to meet about the al-Qaeda threat, the Administration was mounting a campaign to pass tax cuts for multi-millionaires. In June of that year, they succeeded in achieving cuts of $1.35 trillion over 10 years. The major beneficiaries had the highest incomes in the land.

In 2003, as our troops were marching on Baghdad, Bush and Congress were pushing for $330 billion in additional tax cuts, 57 percent of which went to households with incomes over $337,000.

Last summer, as the death toll for American troops was passing 1,000, the administration was fighting hard to give corporate donors an additional $140 billion in tax breaks.

Now, the Senate is preparing to vote on repealing the estate tax, a tax that is only paid by multi-millionaires and billionaires, fewer that 1.5 percent of estates each year.

If there ever was a time to limit tax breaks for multi-millionaires, this should be it. The cost of our military involvements is growing, and we need to make additional investments to protect homeland security. Meanwhile, our budget surplus has disappeared, shifting from a 2001 estimate of $5.6 trillion in the black to $5.2 trillion in the red today.

Bush has asked for and gotten close to $200 billion in emergency war funds, and it is rumored he will ask for more. Where is this money to come from?

None of this has deterred Congress from its relentless march to repeal the estate tax this year. Repeal would cost almost $1 trillion over two decades. Giving such a tax break to wealthy heirs would only shift the burden of paying for security onto the rest of us.

It is unprecedented in U.S. history to pass tax cuts for the wealthy in a time of war. For over 200 years, estate and inheritance taxation has been linked with mobilizations for war. The first federal tax on wealth was levied in 1797, as our country faced the escalating costs of responding to French attacks on American shipping.

During the 19th century, income and estate taxes were imposed during the revenue emergencies of the Civil War and the Spanish-American War. Wartime taxation was viewed as fair at a time when many citizens were sacrificing their lives.

The 1916 passage of the estate tax was a fundamentally American response to the inequalities of the Gilded Age, as well as the U.S. entry into World War I. Even after the war, businessman Harlan E. Read argued in "The Abolition of Inheritance" that war debts should be paid with heavy taxes on inherited wealth.

To pay for World War II, the estate tax was increased so that fortunes exceeding $50 million would be taxed at 70 percent. President Franklin Roosevelt spoke out boldly against war profiteering, saying, "I don't want to see a single war millionaire created in the United States as a result of this world disaster."

Today the lives of U.S. citizens are again at risk as they face prolonged service in Iraq. Others are feeling the pain of recession, losing jobs, savings and security. State and local governments, facing the worst budget cuts since World War II, have gutted crucial community services.

Rather than facing these problems and appropriating the money to resolve them, congressional leaders are using the fog of war to pass another tax cut for the wealthy that would exacerbate long-term budget shortfalls at all levels. While the public's attention is riveted on the war in Iraq, Congress shirks its duty to find money to pay for it, and instead moves to repeal the estate tax, our most progressive tax.

There is only one word for advocating such an inequality of sacrifice: shame!


Chuck Collins (ccollins (at) faireconomy.org), co-author with Bill Gates, Sr. of Wealth and Our Commonwealth: Why America Should Tax Accumulated Fortunes, is Senior Fellow at United for a Fair Economy.

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