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Study Guide for Book Discussion Groups

Wealth and Our Commonwealth:
Why America Should Tax Accumulated Fortunes

(Beacon Press, 2003)

William H. Gates, Sr. and Chuck Collins
Foreword by Paul Volcker

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Chapter 1: What Kind of Nation Do We Want to Be?

In a quote at the beginning of Wealth and Our Commonwealth, the English columnist Will Hutton writes that:

“The reality is that U.S. society is polarizing and its social arteries hardening. The sumptuousness and bleakness of the respective lifestyles of rich and poor represent a scale of difference in opportunity and wealth that is almost medieval –and a standing offense to the American expectation that everyone has the opportunity for life, liberty and happiness.”

• What are the signs of the times that you see that the gap between rich and poor is widening in America? How do you see wage and wealth disparities in your community or in the nation as a whole?

• Does inequality matter? What does it mean for our country when wealth and power are concentrated in the hands of a few? What social harms might arise from the concentration of wealth in the same family for successive generations? When does the concentration of wealth in few hands begin to distort democratic institutions and undermine the common good?

• What responsibility does our country have to correct gross inequities that potentially undermine equality of opportunity? What are ways that we can strengthen equality of opportunity and reduce inequality?

Chapter 2: The Origins of America’s Estate Tax

• Gates and Collins argue that we are living in a second Gilded Age, like the period following the industrial revolution over one hundred years ago. Author Kevin Phillips makes a similar point in his recent book, Wealth and Democracy: A Political History of the American Rich. What are the similarities and differences between the 1880-1910 Gilded Age and the present?

• In Wealth and Our Commonwealth, the authors argue that a shaping principle of the American experiment is the rejection of European aristocracy. Is this a core element of our character? What are other elements of American character that reflect on the debate over the estate tax and taxation in general?

• After reading this chapter, do you believe that the estate tax is “an American solution” to the problem of inequality –or is it “un-American?”

Chapter 3: Opposition to the Estate Tax

• What is fair? Both sides in the estate tax debate talk about fairness. Proponents of completely eliminating the estate tax say the tax is unfair, that it punishes successful people who have worked hard all their lives, paid taxes, and are trying to leave something for their children. Gates and Collins argue that the tax is fair because it is paid by those most able to pay, that removing the estate tax would shift the tax burden onto those less able to pay. They point to evidence that shows that a significant portion of wealth taxed by the estate tax is appreciated real estate and stocks, asset value that has never been taxed. What is fair?

Chapter 4: The Showdown

• The authors of Wealth and Our Commonwealth propose reforming the tax, not eliminating it. They believe that the amount of wealth exempted from the tax could be increased – and that this would address the problem of estates under $5 million having to plan for or pay the tax. But they think some “anti-dynasty” intervention should be maintained. What do you think?Discussion of “What we owe our society”

Chapter 5: What We Owe Our Society

• Many American success stories are told through the window of individual sacrifice and achievement. Gates and Collins celebrate both the role of the individual and the contribution of the society. Is this a new argument? Why don’t we focus much on society’s contribution?

• Gates and Collins argue that American society has a claim on great fortunes because of its shared role in creating the fertile soil for wealth creation. How do individuals make a difference in their success? What are the ways in which society helps people in their individual wealth-building? What is society’s just claim on wealth?

• What is the responsibility of wealthy individuals to their communities and country? What should be their attitude about taxation?

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