In Washington State, Bill Gates, Sr. advocates for funding education for future generations. He proposes using inheritance taxes.
On November 16, 2014, Chuck Collins writes in Nation Of Change:
Over a decade ago, I got a call from Bill Gates.
Not the Bill Gates you’re probably thinking of. It was Bill Gates Sr., the Microsoft founder’s dad. He was eager to speak out in support of the federal estate tax, our nation’s only levy on inherited wealth.
He called it the “gratitude tax.” If you were fortunate enough to make millions, he believed, then you should “recycle your opportunity” for the next generation.
How might that work?
Bill Gates Sr. served in the Army in World War II. When he returned, the GI Bill enabled him to attend college and law school for free. His debt-free education propelled him to a career as an attorney and allowed him to provide excellent educational opportunities to his three children — one of whom is one of the two richest people on the planet.
For today’s college-age youth, talk of a debt-free education sounds like science fiction. Over 40 million Americans owe student debt. The average student borrower graduated last year with $33,000 worth.
There’s no public benefit served by saddling the next generation with astronomical amounts of student debt. Research shows that student debtdelays homeownership, discourages public service careers, and reduces entrepreneurial risk-taking.
Over the last three decades, staggering inequalities of income, wealth, and opportunity have emerged. As Federal Reserve Chairwoman Janet Yellenobserved recently, the U.S. households in the bottom 50 percent lost half their net worth between 1989 and 2013, while the top 5 percent saw their net worth double.
This inequality is hitting the rising generation hard, as today’s students graduate into a much tougher job market than their parents did.
We need a GI Bill for the next generation. It would be a game changer for equality of opportunity.
That’s where the “gratitude tax” comes in.
Back in Washington State, Gates Sr. championed something called the Legacy Education Trust Fund — a dedicated education account capitalized by the state’s estate tax.
A similar fund at the national level — call it the Education Opportunity Recycling Fund — could provide debt-free or low-cost tuition for all American students, financed by revenue from the federal estate tax.
Access to funds could be linked to completion of two years of national service, either in the military or in community service programs such as AmeriCorps. The current benefits for both of these forms of national service are woefully insufficient to expand college opportunity.
The “recycling fund” would be the mechanism through which America’s millionaires and billionaires would pay back the society that made their wealth possible, thanks in part to public investments in education, infrastructure, property rights protections, and so much more.
The fund would have at least three major benefits.
First, it would boost college access while reducing student debt.
Second, it would put a brake on the growing concentration of wealth and power that’s corroding our democracy.
And finally, it would help reweave the social fabric of our communities, as young people in national service programs work side-by-side as teacher aides, elder care workers, and protectors of our natural areas.
The Greatest Generation after World War II was created not only by their own grit, but also through major public investments in their prosperity.
A similar investment is required for the next generation to rise to their full potential. Why should our greatest generation be behind us?
Remember that this was over a decade ago when this conversation took place. NOTHING has since transpired.
The Center For Economic and Social Justice (www.cesj.org) advocates new justice-committed leaders, especially those who want to end the corruption built into our exclusionary system of monopoly capitalism––the main source of corruption of any political system, democratic or otherwise. They advocate the need to radically overhaul the Federal tax system and monetary policies and institute proposals to get money power to the 99 percent of American citizens who now only rely on their labor worker earnings. Under The Just Third Way more just and simple tax system, access would by provided to ownership of the means of production in the future to every child, woman and man by requiring the government to lift all existing legal and institutional barriers to private property stakes as a fundamental human right. The system was made by people and can be changed by people. Guided by the right principles of economic justice, “we the people” can organize and demand that the system be reorganized to make true economic democracy the new foundation for true political democracy.
The following is proposed:
- Eliminate all tax loopholes and subsidies,
- Provide an exemption of $100,000 for a family of four to meet their ordinary living needs,
- Encourage corporations to pay out all their profits as taxable personal incomes to avoid paying corporate income taxes and to finance their growth by issuing new full dividend payout shares for broad-based citizen ownership,
- Eliminate the payroll tax on workers and their employers, but
- Pay out of general revenues for all promises for Social Security, Medicare, Medicare, government pensions, health, education, rent and subsistence vouchers for the poor until their new jobs and ownership accumulations provide new incomes to substitute for the taxpayer dollars to fill these needs.
- The tax rate would be a single rate for all incomes from all sources above the personal exemption levels so that the budget could be balanced automatically and even allow the government to pay off the growing unsustainable long-term debt, but the poor would pay the first dollar over their exemption levels as would the hedge fund operator and others now earning billions of dollars from capital gains, dividends, rents and other property incomes which under some tax proposals would be exempted from any taxes.
- As a substitute for inheritance and gift taxes, a transfer tax would be imposed on the recipients whose holdings exceeded $1 million, thus encouraging the super-rich to spread out their monopoly-sized estates to all members of their family, friends, servants and workers who helped create their fortunes, teachers, health workers, police, other public servants, military veterans, artists, the poor and the disabled.
- The Federal Reserve would stop monetizing unproductive debt, including bailouts of banks “too big to fail” and Wall Street derivatives speculators, and
- Begin creating an asset-backed currency that could enable every child, woman and man to establish a Capital Homestead Account or “CHA” (a super-IRA or asset tax-shelter for citizens) at their local bank to acquire a growing dividend-bearing stock portfolio to supplement their incomes from work and all other sources of income.
- The CHA would process an equal allocation of productive credit to every citizen exclusively for purchasing full-dividend payout shares in companies needing funds for growing the economy and private sector jobs for local, national and global markets,
- The shares would be purchased on credit wholly backed by projected “future savings” in the form of new productive capital assets as well as the future marketable goods and services produced by the newly added technology, renewable energy systems, plant, rentable space and infrastructure added to the economy.
- Risk of default on each stock acquisition loan would be covered by private sector capital credit risk insurance and reinsurance, but
- Would not require citizens to reduce their funds for consumption to purchase shares.
The end result is that citizens would become empowered as owners to meet their own consumption needs and government would become more dependent on economically independent citizens, thus reversing current global trends where all citizens will eventually become dependent for their economic well-being on our only legitimate social monopoly –– the State –– and whatever elite controls the coercive powers of government.