Disney heir Abigail Disney and a group of other wealthy Americans are calling on Congress to pass a much stronger estate tax. They are proposing an estate tax that is higher than President Obama has proposed, but lower than what will take effect next year if Congress does nothing.
Disney heir Abigail Disney and a group of other wealthy Americans are calling on Congress to pass a much stronger estate tax. They are proposing an estate tax that is higher than President Obama has proposed, but lower than what will take effect next year if Congress does nothing.
BOSTON — Their names are famous for the fortunes their grandfathers and great-grandfathers built, and now a group of the nation’s wealthiest citizens want to repay the favor.

“The first reason that moves me is a personal one and has to do with my own children and my grandchildren,” said Richard Rockefeller of Falmouth, Maine.

Rockefeller is the son of David Rockefeller Sr., who is the only surviving grandchild of Standard Oil magnate John D. Rockefeller. In March, David Rockefeller Sr.’s wealth was estimated at just under $3 billion.

Richard Rockefeller joined 35 other signers of the Responsible Estate Tax Proposal Statement of Support.

The Responsible Estate Tax proposal was developed by the group United for a Fair Economy’s Responsible Wealth Project.

The Responsible Wealth Project is a group of businessmen, investors and heirs in the top 5 percent of the nation’s wealthiest citizens. The group uses its clout to press for economic justice, including a progressive tax structure and corporate accountability.

The estate tax proposal put forth by the group would allow for a $4 million per couple and $2 million per individual exemption. The proposal calls for a graduated estate tax rate starting at 45 percent and moving up on the wealthiest estates in the nation.

“The rules are tilted in our favor. The people who are members of Responsible Wealth and the people who are on this call recognize that they have been tilting more and more in our favor over the last several decades, and the estate tax is one of those rules that has tilted very heavily in our favor in the last 12 years and we’re trying to tilt it back,” said Mike Lapham, project director of the Responsible Wealth Project.

Lapham was a fifth-generation owner of and heir to the Finch, Pruyn & Co. paper mill in New York state. The paper mill was started by his great-great grandfather in 1885 and sold in 2007.

Lapham said that in 2001, more than 2,000 of the nation’s wealthiest signed a petition to preserve the federal estate tax, which was followed up by the latest petition to set a federal estate tax rate at a graduated 45 percent.

“The statement is being sent to every member of Congress — we are in discussions with the White House about a possible meeting with the signers of the statement, and we’ve begun discussions about a senator formally adopting our proposal,” said Lapham during a media call on the statement.

After the statements by the holders of famous fortunes with names such as Disney, Rockefeller and Gates and in answer to a question by a reporter, Lapham said the argument that the estate tax proposal would harm small businesses and family farms and prevent those from being passed on was “a canard.”

“The small business and farms argument is sort of a canard, a red herring, that they continue to trot out, even though, in 2001, when it was a $2 million per couple exemption, the Farm Bureau couldn’t find a single example of a farm being sold to pay the estate tax. ( New York Times reporter) David Cay Johnson asked them to find one so he could write about it. The reality is only 40 small farms and businesses are expected to pay any estate tax in 2012, according to the Tax Policy Center, and those that would, would pay about 3.1 percent of the estate’s value on average,” Lapham said.

Robert Rubin, treasury secretary under former President Bill Clinton, added that small businesses and farms have the ability to pay the estate tax off in a longer timeframe.

“For family farms and small businesses, there is a special provision, which provides 14 years to pay off the tax. Assuming you have a business that is even moderately successful, that should certainly provide more than adequate revenues and profits to pay off this tax,” he said.

Lapham noted that the 14-year timeframe now is 15 years.

He added that the intent of the proposal is not to harm small businesses and farms and that the argument is an old one.

“A business that big, $4 million, has plenty of income to pay this over the 15-year period, so we certainly don’t want to be harming small businesses and farms, but we don’t want to keep answering an argument that isn’t really based in fact,” he said.

The names of the individuals who spoke in support of giving a larger share of their family wealth to the federal government in the form of taxes represent some of the country’s best-known fortunes.

Rockefeller, a father and grandfather, said he wanted his descendants’ inheritance to include more than material wealth.

“I don’t look upon that inheritance as a purely material thing. The quality of the world they grow up in will contribute as much or more to their wellbeing as any amount of money or possessions that I could bequeath,” he said.

“That is to say if the world I leave them is one of gated communities and growing inequality and misery among the have-nots and downward mobility for the middle class, a degraded environment and a rotting social and physical infrastructure, then their inheritance will be a shabby one, no matter how much money they get.”

Rockefeller noted that a stable and sizeable estate tax also encourages wealthy individuals to donate to charity and nongovernmental organizations during their lifetimes to reduce the value of the estate.

That also helps society, said Rockefeller, who chairs the board of directors of Rockefeller Brothers Fund. He also is the former chair of the advisory board of Doctors Without Borders, and he has founded three other nonprofit organizations.

“These roles keep me keenly aware of the role of private philanthropy to address a host of societal, humanitarian and environmental needs which neither the business nor the government sectors can meet nearly as effectively,” he said.

Rockefeller also noted that a sizeable estate tax on the nation’s wealthiest would serve as repayment for the help of government-funded facilities, such as education and infrastructure, in amassing those fortunes.

“Our family’s fortune would never have been made in the first place without the foundation of public laws, public education and material infrastructure that underpinned American industry in my great-grandfather’s time and continue to do so today,” he said.

Abigail Disney’s grandfather and grand-uncle made their fortune through fictional characters, and Disney, herself a documentary filmmaker and philanthropist, spoke frankly about her benefits from their work.

“What’s important to note is the estate tax is not a double tax. People who earn enough money to be affected by the estate tax don’t earn that money through paychecks. People do not build fortunes on income that is taxed as income in the conventional sense. The majority of my wealth is assets from the growth of Disney stock,” she said.

“Those assets were never taxed in my grandfather’s lifetime, and when I pass those assets on, it’s only right and appropriate that I should pay a tax to repay society’s investment in making all that wealth accumulation possible.”

Disney also noted that the group speaking out for more taxes runs counter to accepted notions.

“I just want to point out that the fact that we are all surprising voices for these taxes is sort of a sorry statement about the political state we now live in, the culture we now live in, which presumes that people only fight to represent the interests of their own class. I think we need to challenge that assumption,” said Disney, the granddaughter of Roy O. Disney, who founded the Walt Disney Co. with his brother, Walt.

She credited government facilities and investment for helping make their dream a worldwide phenomenon that continues to growth and thrive.

“In two generations and in spite of a very punitive tax environment, built a legacy that has now lasted three, going on four, generations. They did that because there was funding for infrastructure, education, regulation, roads, highways and airports,” she said.

“Without the Marshall Plan and investment in security around the world, Disney never could have transformed from a moderately successful film studio into the global economic powerhouse it is today.”

Disney also noted that a strong estate tax prompts philanthropy while the donor is alive.

“It’s also important to note that the estate tax drives an enormous amount of charitable giving, and that’s no small matter,” she said.

Rubin noted that a strong estate tax can contribute to consumer confidence and job growth.

“When you look at the economy, a substantial estate tax can provide revenues at a time when our federal government badly needs additional revenues to fund a sound fiscal regime, to fund public investment and to provide economic security. The estate tax will do this without any meaningful adverse economic effects,” he said.

“All of these purposes, a sound fiscal regime, public investment and economic security, help create confidence and confidence would contribute to job creation and recovery.”

Rubin also said that a stable and strong estate tax can break down class boundaries.

“I think that a substantial estate tax is critically important in the respect that it works to reduce concentrations of economic and political power across generations. Those concentrations are antithetical to the basic premise, the founding of our republic. I think those concentrations can also play a significant role in distorting the functioning of our democratic political system,” he said.

John “Jack” Bogle founded the Vanguard Group in 1974, the country’s second largest mutual fund. Bogle, with six children and 12 grandchildren, has a net worth estimated at around $80 million.

“We citizens have an obligation to form a more perfect union, to promote the general welfare and to establish justice for all and in that phrase, I include economic justice. I see a strong estate tax as doing all those things so I support this proposal,” he said.

He added he sees the proposal as a middle ground between extremes of completely eliminating the federal estate tax and going to 2001 levels.

“I think it’s a reasonable compromise,” he said. “I’m just an entrepreneur who created a remarkably successful business, which I did not build alone. I recognize the roles of our government, our shared values and the institutions of our society in helping to make that possible.”

While Bill Gates Sr., the father of Microsoft mogul Bill Gates Jr., could not be on the call, he is a signer of the proposal, and his statement was read during the call.

“Taxes are how we pay for the things we do together through government, and taxing those who receive the greatest benefit makes all the sense in the world to me. Those of us who signed the statement, including my friend, Warren Buffett, believe that a $4 million exemption per couple and a 45 percent rate, rising on the very largest fortunes, is perfectly reasonable and should be put into law,” the Gates statement read.

He credited the GI Bill for helping him attend college and law school. He co-founded the law firm, Preston, Gates & Ellis, and is a philanthropist in his own right, aside from his famous son.

Gates noted that his son’s fortune also was helped along by public institutions supported by taxes.

“I also had a front-row seat for the creation and growth of my son’s business, and I observed in many ways how our country’s publicly-supported infrastructure, tax laws, government-funded research, education, patent protection and so forth helped the company grow,” his statement read.

“I believe that those of us who have benefited so greatly from our country’s investment in our lives should be asked to give a portion of our wealth back to invest in opportunities for the future.”