Sharing The Sacrifice

Chuck Collins

March 23, 2005

It's been two years since the United States first entered Iraq, but for the majority of Americans—those lucky enough not to have loved ones serving in the Middle East—this doesn't feel like wartime. That's because there's been little interest in Congress about the compromises of war. And no one is less concerned about shared sacrifice than the wealthy, who are getting permanent tax cuts while the war bill is passed onto our children. Chuck Collins of United For A Fair Economy explains why now is the worst possible time to abolish the estate tax—our only tax on accumulated wealth.

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

In one America, we hold bake sales to buy Kevlar bulletproof vests for family members deployed to Iraq.  In another America, lobbyists press to abolish the estate tax, America's only tax on accumulated wealth. This will ensure that the children of multimillionaires—who are not losing sleep over insufficient body armor—will harvest unlimited inheritances into the millions and billions.

As we mark the second anniversary of the Iraq mission, there is a stunning inequality of sacrifice on the home front. The Bush administration and congressional leaders have shown little interest in the symbolism, let alone practice, of shared sacrifice. There are no tire drives, no calls for rationing, nor any moral duty to share in the costs of the war.

The war managers are determined to isolate the domestic sacrifice and losses for this war to as few families as possible—largely to those waiting for loved ones to return from duty in Iraq.

But the war has a steep financial price tag. The Iraq operation has cost us more than $155 billion to date, with more to come. Instead of taxing our citizenry to pay for this war, Congress is deferring the bill to the next generation in the form of whopper deficits. And instead of taxing the wealthy, we are now about to pass permanent tax cuts for multimillionaires.

Never in the history of U.S. wartime has Congress pushed tax cuts—let alone permanent tax cuts. Historically, the opposite has been true: Wealth has been "conscripted," in the form of progressive income and estate taxes, to at least symbolize that everyone is contributing in some way.

The estate tax has been a wartime tax. The first federal tax on wealth was levied in 1797, as our country was faced with the escalating costs of responding to French attacks on American shipping. During the Civil War and the Spanish-American War, inheritance taxes were instituted, to be repealed only after war debts were retired.

The 1916 law establishing our current estate tax was given a tremendous push by entry into World War I and the need for revenue. During World War II, President Franklin D. Roosevelt understood that national domestic unity against Hitler depended on a sense of shared sacrifice—not just by G.I. Joe and Rosie the Riveter—but also by the Rockefellers.The estate tax was increased so that fortunes exceeding $50 million would be taxed at a 70 percent rate.

Our present inequality of sacrifice is not lost on some veterans' groups. "During the Civil War, rich people could buy their way out of the draft," said Charlie Richardson, co-founder of Military Families Speak Out. "Now,  the wealthy don't have to pay anything to avoid the draft and they get tax cuts on top."

Sen. John McCain, R-Ariz., recently observed that times of war in U.S. history have been times of domestic sacrifice. "In the past year, we have approved legislation containing billions and billions of dollars—in pork-barrel projects, huge tax breaks for the wealthy and a corporate tax bill estimated to cost $180 billion. This is a far cry from sacrifice."

The sustained push to abolish the estate tax has been financed by some of the wealthiest families in America, including the Walton, Mars and Gallo clans. These families, underrepresented in mess tents outside Fallujah, are not interested in a compromise estate tax reform that keeps our nation strong and secure while protecting veterans' services and America's family farms and small businesses.

Young Americans are putting their lives on the line to serve their country in Iraq, while those who are whining about the estate tax are fighting to keep every last cent. A time of war is no time to eliminate the estate tax.