The Fading of the American Dream

By Frank Butler

Aventura News, September 2000

America's early immigrants from Europe came to this land with great hopes
and dreams. Part of their hope was to be able to escape the bonds of an
aristocracy that had concentrated political power and restricted economic
opportunity for all but the elite. Power in their era derived from who you
were, not what you did. The dream of many of our nation's founders was that
America would be a land where people were rewarded for their contributions
and where all would have the opportunity to succeed.

A part of this American Dream was in jeopardy recently. Congress passed
legislation to repeal the nation's 84-year old estate tax, a tax that
impacts only the nation's wealthiest 2% of taxpayers. I'm glad President
Clinton vetoed this bill, and that Congress narrowly failed to override his
veto, but I fear that repeal will be proposed again next year, as
Congressional insiders predict.

It was estimated that over the next two decades, repeal of the estate tax
would have granted more than $600 billion of tax relief to a narrow sliver
of wealthy Americans. Though my family would benefit from estate tax
repeal, I think it is wrong. Part of my hope and dream is that our children
and grandchildren will not grow up in an economic aristocracy where the gap
between the rich and the poor continues to widen in a way that threatens
community and the general welfare.

Civilizations throughout history have realized the need to attempt to
establish practices to prevent large concentrations of wealth and to promote
social cohesion. Judeo-Christian tradition teaches the concept of jubilee,
in which every fifty years, debts would be canceled and property returned to
its original owners. This concept was aimed at restoring fluidity to the
social structure and eliminating a permanent aristocracy with a permanent
debtor class. Likewise, the Native American cultures that called this land
home long before the arrival of Europeans had rituals such as potlatches and
other gifting ceremonies to keep wealth from concentrating in the hands of
the few at the expense of the community.

In our own nation, we have a relatively long tradition of trying to avoid
the concentration of wealth through taxes on large estates at the time of
death. Since President Lincoln signed the nation's first estate tax
legislation in 1863, several other presidents have spoken in favor of strong
estate taxes.

One of the most powerful statements came in Theodore Roosevelt's 1910 "New
Nationalism" speech: "The really big fortune, the swollen fortune, by the
mere fact of its size, acquires qualities which differentiate it in kind as
well as in degree from what is possessed by men of relatively small means.
Therefore I believe in a graduated income tax on big fortunes and in another
tax which is far more easily collected and far more effective – a graduated
inheritance tax on big fortunes, properly safeguarded against evasion and
increasing rapidly with the size of the estate." President Clinton echoed
these thoughts in his speech after vetoing the estate tax repeal bill.

In this time of tremendous economic prosperity, it is appalling to me that
more than 40 million Americans lack health insurance, nearly 20% of our
children live in poverty, many of our urban schools are crumbling and a
growing number of senior citizens must decide between buying food or
prescription drugs vital to their health. It is time to reaffirm that part
of the American Dream that holds that every individual, not just those of us
at the top of the economic structure, has worth and dignity and should be
treated with the same respect we expect. I'm willing to do my share.

Frank Butler is the retired CEO of Eastman Gelatine, a subsidiary of Eastman
Kodak. He is a member of Responsible Wealth, a Boston-based network of
business leaders and other affluent Americans working to reduce economic
inequality in America.

© 2000 Aventura News

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