February 14, 2001

2:06 AM

Gates, Buffett & Soros unite to fight . . . the estate tax?I think this is a good thing. It's definitely odd.
posted by aflakete (81 comments total)

I think it's great that some rich guys aren't 100 percent greedy. Soros and Cohen were no surprise to me, but I'm suddenly thinking a little better of Buffet and Gates. Good work, guys.

One puzzle, though: who are these rich people who are able to "die annually" (see last line of article)? Are we to believe that the rich get yet another perk, the ability to come back from the dead? And why do they die year after year? Is it another way the wealthy have learned to evade taxes and thus become yet richer? Are they depreciating their souls?
posted by pracowity at 2:58 AM on February 14, 2001

If it's the giving they're so concerned about; why don't they just give money to the government as voulenteers themselves -- instead of forcing all the rest of us to join in?
posted by dagny at 3:19 AM on February 14, 2001

Eh? Who's being forced here? The wealthiest 2%? Can't say my heart is bleeding...

posted by andrew cooke at 3:45 AM on February 14, 2001

> "instead of forcing all the rest of us to join in"

The article said: "Only 2 percent of Americans who die annually pay the tax. "

These guys are in the top 2 percent and will probably die rich and owe estate taxes. The "rest of us" are not affected by current estate tax laws unless you count the top 2 percent as the rest of us.

Instead, the money taxed from the estates of the very richest Americans goes to help the other 98 percent of Americans. It helps to build your roads, school your children, fund the army, etc.
posted by pracowity at 3:46 AM on February 14, 2001

The "rest of us" are not affected by current estate tax laws

So injustice is fine as long as it benefits you?

The rich have less right to the fruits of their labor because they have more, because they succeeded, because they achieve?

What would happen if the richest 2% decided that they didn't need anymore? What if they stopped producing? Who would you steal from then?
posted by Mick at 5:52 AM on February 14, 2001

The title for this link seems misleading to me; it implies that these guys are opposing the tax itself rather than the repeal of this tax.
posted by harmful at 6:23 AM on February 14, 2001

The rich have less right to the fruits of their labor because they have more, because they succeeded, because they achieve?

The rich have less need for these fruits.

Besides, it is not necessarily the fruits of their labour.
posted by palnatoke at 6:31 AM on February 14, 2001

And they got those fruits in part because of a system that supports their labor. That support creates value in itself--think of the tax as the repayment of a loan.
posted by rodii at 6:42 AM on February 14, 2001

The estate tax was implimented in order to spread wealth, which is necessary in a capitalist society. Since when is paying taxes to the communities that enable you to make your money a punishment, or an injustice? I think the real injustice is that there are so many poor people, largely becomes money tends to accumulate.
posted by Doug at 6:47 AM on February 14, 2001

It doesn't matter that they earned their money from our "system," that's how any of us earn anything we have. Property rights are the foundation of capitalism.
I've yet to see a justification for the estate tax that doesn't sound like plain ol' sour gramps.
posted by sonofsamiam at 6:59 AM on February 14, 2001

Another intended effect of the estate tax was to fight the establishment of a permanent "aristocracy" type class. I think the original arguments in the 19th century (not a time traditionally antagonistic to the wealthy) were couched in terms of the American Revolution. I wish I could find backup for this, but this is "half remembered from some college course over 10 years ago" material.
posted by trox at 7:05 AM on February 14, 2001

Since when is paying taxes to the communities that enable you to make your money a punishment, or an injustice?

My father, a small businessman, has paid taxes to the community. Property taxes. Federal taxes. State taxes. Social security taxes. Excise taxes. License fees. There have been years when the cost of compliance with government mandates have exceeded profits, and he still paid his taxes. And of course his workers; they got paid before he did.

The estate tax hits our family business particularly hard, and will have one of three results: selling equipment, which means laying off at least one long-time employee and possibly crippling the company’s ability to compete in that area; selling family land to real estate developers; at the very least, consuming a bequest he meant to leave to his grandchildren, which would enable each to go to college.

If people want to redistribute wealth, then show up at the funeral and pull the rings off the body. At least it’s more honest than having the state do it.
posted by lileks at 7:15 AM on February 14, 2001

I don't know, we're not the top 2%, my dad pays estate taxes, and as lilieks has said, property taxes, federal taxes and so on and so on. This effects me and the rest of my family. I care for I'm not in the top 2%. Am I getting something wrong, or?
posted by tiaka at 7:29 AM on February 14, 2001

Little melodramatic, huh Lileks? Most people in America will never, ever, see $600k. Many families, in a lifetime of work, will not see that amount of money. Ever. So for someone to complain that they have to pay 37% on any money over $675,000 after they die...I think some perspective is needed. Maybe, I dunno, people who this effects should consider things like, ya know, working for their money. Just a thought.
posted by Doug at 7:48 AM on February 14, 2001

Tiaka: Unless your dad has recently died, yes, you're getting something wrong. The estate tax definitely is in need of reform -- I offer the example of two brothers, family friends, as anecdotal support for this position. They were the last two surviving members of a family that owned a small farm in what has become the Twin Cities suburbs. They were, therefore, "land rich but cash poor," owning land that was considered very valuable yet wanting to raise pigs instead of selling out. When one of the brothers died, the other was forced to sell half the land to pay the estate taxes, because of this high valuation. Now he doesn't have enough land to really farm it anymore, and he has sold the rest; another family farm bites the dust in favor of development.

That being said, easing the property tax minimum is a far easier fix than getting rid of it altogether. The tax is a useful way to prevent permanent accumulation of assets in a small percentage of the population. Getting rid of it just makes it easier for the Moneybags Juniors and IIIs of the US to never have to lift a finger; why should we support that?
posted by norm at 7:50 AM on February 14, 2001

> [Your] father, a small businessman...

must be in the top 2 percent of the wealthiest people in the US if this applies to him, right? That's wonderful for him, you, and the rest of your family. He has accumulated great wealth (cash, property, etc.) despite taxation.

Taxes -- all taxes -- are a way of redistributing wealth. All countries do it. If taxes are not a valid way to fund the running of a country, how do you expect to run a country?
posted by pracowity at 7:52 AM on February 14, 2001

It's my understanding that family businesses and sole proprietorships may avoid being hit hard by the state tax by reorganizing as a corporation (check incorporation laws in your state). Certainly, there are a few more stringent regulatory requirements one must meet to do this, and there may be some transfer tax on corporate assets, but I should think it would be less than the estate tax.

Of course, I'm not a lawyer. Your mileage may vary. :)

On the tax itself, Dubya's disdain for it and Buffet's support are quite easy to reconcile. Dubya's never had to work a day in his life, and would probably be selling used cars somewhere without the Bush dynasty's cash. Buffet, however, had an ability and did something with it, and would want his children to similarly make something of themselves.
posted by Vetinari at 8:06 AM on February 14, 2001

As Justice Holmes said in 1904, "Taxes are what we pay for civilized society." As a tax practitioner, I see who pays the estate taxes and that with some very simple planning (unfortunately requiring a lawyer to do right) a married couple can pass on an estate worth upwards of $1.2 million tax-free to their heirs. Under the current plan, this will increase to $2 million by 2006.

I interpret Justice Holmes' statement to say that 'without taxes, the poor will be force to act uncivilized and strike out violently in order to survive.'

And as for selling the farm to pay the taxes, there are other options. Why not take out a loan with the land as collateral? Sounds like your friend didn't enjoy farming that much.
posted by OneBallJay at 8:16 AM on February 14, 2001

Comments Warren Buffett made at Columbia University last year:

"I hear friends talk about the debilitating effects of food stamps and the self-perpetuating nature of welfare and how terrible that is. These same people are leaving tons of money to their kids, whose main achievement in life had been to emerge from the right womb. And when they emerge from that womb, instead of a welfare officer, they have a trust fund officer. Instead of food stamps, they get dividends and interest."

" [I consider myself] very undertaxed. I hear this Republican message that we're rich as hell and we're not going to take it any more. That doesn't make a lot of sense to me. I'm paying taxes at a lower rate than my secretary ... and frankly I think that's crazy."

posted by terrapin at 8:21 AM on February 14, 2001

The richest 1% in the US already pay twice the income taxes that the bottom 75% do. The idea that they're not contributing their fair share is rather ludicrous. As for Buffett, if he thinks he's paying too little in taxes, he is free to donate as much extra money to the United States Government as he wishes. The instructions for doing so are printed in the instructions of every 1040 form.
posted by aaron at 8:45 AM on February 14, 2001

Estate taxes of course aren't taxes upon the person who earned, worked, etc. -- they are taxes upon the heirs, who, by definition, did nothing to get that money than what we all should do free of compensation ... i.e., be kind enough to our parents not to be disinherited.

The rich can already give extraordinary benefits to their children -- paying for a first class education, supplying connections, supplying employment, etc. I know plenty of super-wealthy kids and none of them (being honest) would fail to attribute a significant portion of their life success to their parents' resources.

Even though I am a conservative, I am very, very comfortable with saying that I'd much rather incentive everyone to work by lowering their marginal income tax rates than incentivize a fraction of society's wealthiest not to donate to charity and not to foster self-sufficiency in their children by eliminating the estate tax.

Where people truly have "earned" a piece of the estate, for, by example, working as part of the family business, their are a variety of appropriate steps that a family can take to transfer equity ... stock options or ESOPs, for example, so that Sonny gradually accumulates his own stock in Dad Inc.

In addition to such measures, I am very sympathetic to the case of small business and farmers -- and, if you read the article, both Buffett and Bill Gates, Jr. (MSFT Chairman's dad) make clear that they support reforms which will go a lot farther than the current exemptions there. I think it would be right to dramatically reduce estate tax (say, to 10%) for the first $5 or $10 million dollars of estate value attributable to the operating assets of a privately-held business in the case of estates which aren't also transferring large amounts of liquid assets
posted by MattD at 8:50 AM on February 14, 2001

Nineteen messages already and not a single accusation of ulterior motive among some of America's wealthiest men? Surely someone can muster a remark about Gates only taking this stance for public relations purposes. Or did someone replace my usual MetaFilter with dark, sparkling Folger's Crystals? ;)
posted by kindall at 8:57 AM on February 14, 2001

andrew cooke: "Who's being forced here? The wealthiest 2%? Can't say my heart is bleeding"

Sour grapes, perhaps? An injustice upon a wealthy person is still an injustice.

palnatoke: "The rich have less need for these fruits. Besides, it's not necessarily the fruits of their labor."

Regarding the first sentence: Great. So you're going to be going out and giving away all of your income to the homeless until you're living right at the poverty line? That would be the honorable thing to do -- you have less need for those excess fruits than they do! get rid of them!

Regarding the second sentence: So then they had someone else working for them, in which case they either built or ran a business. For anyone who has never tried this, it is a significant endeavor, and does require no small amount of labor, in and of itself. More sour grapes.

Doug: "The estate tax was implemented in order to spread wealth, which is necessary in a capitalist society."

No. Spreading wealth is necessary to the survival of a socialist society. What is necessary to a capitalist society is free, unrestricted, unhindered flow and accumulation of money, of capital. When you are paying a hired gunman to go on some Quixotic Robin Hood mission to take from one person and give to another, you're taking money out of the system, and limiting capitalism.

Doug (again): "Maybe, I dunno, people who this effects should consider things like, ya know, working for their money. Just a thought."

Doug, in a capitalist society you do not make any money unless you are doing something that others find valuable -- barring, say, robbery, but we already have punishments instituted for such things. To say that someone who makes N million dollars has done anything less valuable than the steel worker who brings home $25,000 a year is plain reverse snobbery. If he weren't performing a function that many people in society found valuable, he wouldn't be wealthy. There is no need to artifically "correct" these imbalances, because they are there to show the sucess of the system.

pracowity (again): "Taxes -- all taxes -- are a way of redistributing wealth. All countries do it. If taxes are not a valid way to fund the running of a country, how do you expect to run a country?"

I don't know. Perhaps you could ask, say, Thomas Jefferson who, as president, repealed all internal taxes, which put more money into the hands of the consumer, accelerating the income rate from tariffs. By the end of his presidencey, the governmen actually ran a surplus, and was repaying the federal debt at an accellerated rate -- without the need for internal taxation.

Taxes -- all taxes -- are a way of forcing one person, at gunpoint, to pay for what another person uses. In my mind, user fees are a much more effective way of paying for things: if you use it, you pay for it. If you don't, you get to keep your money, rather than having it taken from you anyway. Again, capitalism flourishes, and everyone benefits, when more money is left in circulation.

accountingboy: "with some very simple panning... a married couple can pass on an estate worth upwards of $1.2 million tax-free to their heirs."

Here we should read "with some very simple planning" as "exploiting loopholes in the tax code". If taxes are, as you say, "what we pay for civilized society", then shouldn't you be opposed to helping people pay less in the way of taxes? And why should someone who has an estate of, say $1,200,001 be punished more than the person with an estate of $1,200,000? Arbitrariness is merely one sign of unfairness in our tax code.

I find it really disappointing how many people here are basically saying "they deserve it", or "they're rich, they don't need to keep they're money". I would like every single person who says such a thing to do as I suggested above: figure out what, for your family, the poverty line is, and give away all your income and posessions until you are living just above the poverty line. Who gave you the right to take more than you need to survive? Don't other people deserve that extra money more than you do? You're comparitively wealthy, you should be stripped of everything that's not necessary to survive -- for the betterment of society. Right? Hello?


posted by jammer at 9:12 AM on February 14, 2001

Walter Williams: [Some people seem to believe that] somewhere in the country there is a pile of money. The reason some people are rich while others are not is because greedy rich people got to the pile of money first and took their unfair share. [... But in] a free society, income is earned by pleasing our fellow man. The greater our capacity to please, the more willing our fellow man is to voluntarily give his money -- and the higher our earnings will be, whether it's in the form of wages, rent, interest or profit.
posted by dagny at 9:13 AM on February 14, 2001

Actually, it's things like this that restore my faith in the USA. The New York Times ran a front page story (registration free but required) on this. Some choice quotes include:

- The billions of dollars in government revenue lost "will inevitably be made up either by increasing taxes on those less able to pay or by cutting Social Security, Medicare, environmental protection and many other government programs so important to our nation's continued well-being," the petition says.

- "The estate tax," it says, "exerts a powerful and positive effect on charitable giving. Repeal would have a devastating impact on public charities."


- Mr. Buffett said repealing the estate tax "would be a terrible mistake," the equivalent of "choosing the 2020 Olympic team by picking the eldest sons of the gold-medal winners in the 2000 Olympics. We would regard that as absolute folly in terms of athletic competition," he said.
"We have come closer to a true meritocracy than anywhere else around the world," he said. "You have mobility so people with talents can be put to the best use. Without the estate tax, you in effect will have an aristocracy of wealth, which means you pass down the ability to command the resources of the nation based on heredity rather than merit."

They're all good points, I think
posted by TNLNYC at 9:21 AM on February 14, 2001

Sour grapes, perhaps? An injustice upon a wealthy person is still an injustice.

I don't think taxing the rich is unjust. Believe it or not, tax money funds things like schools for the poor. Seems like a good idea to me.

posted by andrew cooke at 9:43 AM on February 14, 2001

My tax money also funds things like the War on Drugs, which I don't believe in. Wouldn't it be better if I could choose to give *all* of it to schools for the poor, if I thought that was important, rather than having some beaurocrat take my money from me, and then decide what I should think is important?

Is it insulting to the idea of a free society.
posted by jammer at 9:53 AM on February 14, 2001

Excellent, excellent post, jammer!
posted by aaron at 9:54 AM on February 14, 2001

jammer: "they're rich, they don't need to keep they're [sp] money"

Yes, they're rich, and yes they should have their money. The estate tax is on their estate - i.e. they're dead. The dead have no use for their money.

As has been pointed out before in this thread, the tax is paid by the heirs, which haven't done anything other than come out of the right womb to deserve the money.

jammer: "To say that someone who makes N million dollars has done anything less valuable than the steel worker who brings home $25,000 a year is plain reverse snobbery. If he weren't performing a function that many people in society found valuable, he wouldn't be wealthy"

Again, what valuable function have the heirs provided to society? Flaunted wealth they did nothing to create? Used daddy's (or mommy's) wealth and influence as a shield to protect them from responsibility for themselves/their actions?

And by the way, I am opposed to people paying less than their fair share of taxes. My job is to make sure they're not paying more than Congress has decided they should. The planning I'm talking about is not "exploiting loopholes," it's understanding the law.
posted by OneBallJay at 10:07 AM on February 14, 2001

Jammer, you seem to have lapsed into the all-too-common problem these days of conflating capitalism with democracy. Yes, America is a capitalist society, but before that we are a democratic republic. And, as anyone from Thomas Jefferson to Teddy Roosevelt would tell you, democratic values should trump capitalist desires in our nation if the Democratic experiment is going to work.

For democratic institutions to function properly, two conditions must be fulfilled: 1) All citizens must have a means of satisfying their most basic needs (food, water, shelter), and 2) Social mobility must be relatively fluid. Both of these conditions are currently facilitated by the estate tax.

I have no doubt that the tax could be reformed and better implemented to avoid the small business and family farm horror stories listed above. But I think the idea of progressive taxation is basically sound and inherently necessary to curb the antidemocratic influences that arise under extreme capitalism. As Buffett notes in the article, a permanently monied caste in US Society is antithetical to our founding values.

That doesn't necessarily mean soak the rich. Saying that Americans (and Metafilterans) should "be stripped of everything that's not necessary to survive -- for the betterment of society" is a reductionist argument that doesn't really get us anywhere. Obviously, we all enjoy the fruits of our luck and our labors, or we wouldn't be spending our work days jawing at this site. There's obviously a middle ground where those with means can pay slightly more on a graded scale than those who don't, without resorting to extreme redistributive measures.

That being said, Aaron, perhaps the top 2% is paying twice as much as everyone else, but that doesn't change the fact that, under the current system, factoring in payroll taxes, working Americans pay a higher percentage of each dollar to the Government than the wealthy do. This is an injustice that should be rectified - through payroll tax reform, not capital gains handouts.

As for Jammer's user fees idea, it's implausible in practice. Do you use roads much? Take your kids to school? What about sidewalks or public parks? Drink (hopefully) clean public water, breathe (hopefully) clean air? I'm not saying the government owns the water you drink and the oxygen you breathe, but it does employ some very necessary regulatory agencies to ensure that they're safe for you. Civic externalities aren't covered in the "capitalist society" you outlined.

Finally, I agree with you on the Drug War tip, but that's a discussion that should be carried out in the political sphere with our voices and votes, not our dollars (In fact, that's the main problem in Washington right now.) If you don't like the Bureaucrat in question, run or vote against him. The government is us. The more we realize that, the more change can be effected on every level of governance.

posted by kevincmurphy at 10:11 AM on February 14, 2001

"The estate tax," it says, "exerts a powerful and positive effect on charitable giving. Repeal would have a devastating impact on public charities."

This is a commonly-believed myth, with little empirical support. There is no correlation between charitable giving and estate tax rates; there is a very strong correlation between charitable giving and economic strength. In other words, the more you have (and get to keep) the more you want to give away.

A second myth about the estate tax is that it adds any significant revnue to the federal treasury. Actually, less than 2% (closer to 1%) of all federal revenue comes from federal estate taxes - less than $20 billion annually. Of that money, 65% goes to enforcement and collection - leaving a net revenue of less than $7 billion. Of course, that doesn't even count the enormous cost society pays for tax-avoidance behavior, such as reduced savings, increased consumption, etc.

Finally, the death tax is a significant factor contributing to develppment of farmland. "Land-rich" folks like those mentioned above often lack the cash to pay the tax on family farms when the original owner dies; they have to sell all or part of of the family farm to pay the taxman. Who do you think buys that land?

Society as a whole suffers from the effects of the death tax, and very little benefit can be seen. It's time to end it.

posted by mikewas at 10:26 AM on February 14, 2001

blah blah blah blah blah

can't the estate tax be very easily avoided if one passes on one's estate before one dies?
posted by jpoulos at 10:30 AM on February 14, 2001

Nope, gift tax >$10,000.
posted by Mick at 10:50 AM on February 14, 2001

"I find it really disappointing how many people here are basically saying "they deserve it", or "they're rich, they don't need to keep they're money". I would like every single person who says such a thing to do as I suggested above: figure out what, for your family, the poverty line is, and give away all your income and posessions until you are living just above the poverty line."

Jammer: I don't think anyone but you is saying that the rich should give away their money untill they are at the poverty line. I don't where that line of reasoning came from. That certainly isn't the goal of taxation, no matter what critics say.

I don't think taxes are taking away all of the money from the rich, they still get to keep a tidy share that will keep them rich, I'm sure. Especially the wealthiest 2%.
posted by Hackworth at 10:56 AM on February 14, 2001

jammer>Here we should read "with some very simple planning" as "exploiting loopholes in the tax code". If taxes are, as you say, "what we pay for civilized society", then shouldn't you be opposed to helping people pay less in the way of taxes? And why should someone who has an estate of, say $1,200,001 be punished more than the person with an estate of $1,200,000? Arbitrariness is merely one sign of unfairness in our tax code.

I find it really disappointing how many people here are basically saying "they deserve it", or "they're rich, they don't need to keep they're money".

Why should a person who has an estate of $1,200,001 be punished more than a person who has an estate of $1,200,000? First, let's be clear about this -- the first million (or so, I don't know the exact number) is exempt. That means the person is paying taxes on one dollar. Not exactly much of a punishment.

But it's funny how people (not to single out jammer) are talking about the estate tax taking away rich folks' money. If someone makes a million dollars, he pays taxes on that money. If someone is given a million dollars, he pays taxes on that money. If someone inherits a million dollars, he should have to pay tax on that as well. All this talk of the taxman coming to the funeral and stripping rings off of the deceased is ridiculous.

And the point about estate planning was meant to get across the point that the estate tax simply is not as much of a burden as its opponents are making it out to be.

Mick>The rich have less right to the fruits of their labor because they have more, because they succeeded, because they achieve?

Well, the rich people you're talking about are dead. When they give their hard-earned money away, the recipients should have to pay taxes on the gifts they have received.

aaron>The richest 1% in the US already pay twice the income taxes that the bottom 75% do. The idea that they're not contributing their fair share is rather ludicrous.

Why focus on income tax alone? Factor in sales taxes, local and state income taxes, payroll taxes, Medicare, etc. and I imagine that the tax burden becomes more evenly spread out.

An ideal tax code, according to free-marketers, is one which doesn't penalize or promote any given activity. It should treat capital gains, gifts, and income the same as much as possible. Yes, there are a lot of inequities in the tax code, and it certainly could be simplified. But people who are arguing that an estate tax is particularly unfair are wrong.
posted by UrineSoakedRube at 11:02 AM on February 14, 2001

jpoulos: "can't the estate tax be very easily avoided if one passes on one's estate before one dies?"

Mick: "Nope, gift tax >$10,000"

Additionally, if you try to give it all away right before you die, the IRS can retroactively deem it to have been in your estate and collect the tax on it. And if I recall correctly, if you use the $10,000 per year gift tax exemption it decreases your estate tax exemption by the same amount.

MikeWas, I'm not saying it's incorrect, but where did you get your $20 billion/65% figures? I hadn't seen anything like that.

To those of you talking about the surplus - don't forget that we have a multi-trillion dollar national debt that must be paid down before the baby boomers get on social security. If not, additional taxes will need to be levied or social security will have to be drastically modified. I realize that our economic system (this is for those of you who understand US economic policy) is regulated by having a large amount of debt, but it would work just as well if it were considerably smaller.

And to correct UrineSoakedRube, the recipient of a taxable gift pays nothing, the giver pays it all.

Boy, this post is all over the place.
posted by OneBallJay at 11:20 AM on February 14, 2001

Is it insulting to the idea of a free society.

Maybe it's insulting to your idea of a free society, but personally, I don't find it offensive. I prefer a society that takes care of the poor, even if that means some coercion of the rich. I'm not saying that the rich should be taken out and shot, or that they shouldn't stay richer than me, just that life is a little more equitable.

If you're interested, check out "Development as Freedom" by Amartya Sen. You might be surprised...

posted by andrew cooke at 11:31 AM on February 14, 2001

An injustice upon a wealthy person is still an injustice.

Heh. I think that comment sums up the top priority of the Bush presidency nicely -- we must all be more sympathetic to the rich.

Anyone with an adjusted yearly gross income of $108,048 is in the top 5 percent in the U.S. and pays a disproportionate share of taxes. The idea that this government is funded on the involuntary largesse of millionaires is not true.

The wealthiest one percent in the U.S. pays 20 percent of all taxes and is due to receive 40 percent of Bush's planned tax cut (source). When you couple this with the planned abolition of the estate tax, it's hard to view Bush's plans as anything other than a big giveaway to the rich.
posted by rcade at 11:36 AM on February 14, 2001

Jammer, actually, that is why it was implimented, you should look into it.
Any economist will tell you, if he's sane, that we must have safe guards against the unfair accumulation of wealth. This is why we have laws against monopolies. Your weird laisse faire philosophy just doesn't work.
And I think, for instance, that a steel worker does a lot more for society than I do. I work at an advertising agency. And yet, I make more than most of them. My pay check has so little to do with my contribution to society it's almost laughable.
posted by Doug at 12:00 PM on February 14, 2001

An injustice upon a wealthy person is still an injustice
rcade said Heh...we must all be more sympathetic to the rich

You should be sympathetic to no one. If the result of something is unjust people do not need sympathy, they need justice. If the result is just, there is no need for sympathy.
posted by Mick at 12:23 PM on February 14, 2001

accountingboy>And to correct UrineSoakedRube, the recipient of a taxable gift pays nothing, the giver pays it all.

Huh. My mistake. I'd definitely be in favor of changing that tax law so that the recipient pays the taxes. I do still think that the most reasonable tax code is one that treats all the money one obtains equally, whether it be from gifts, income, interest, capital gains, or what have you.

posted by UrineSoakedRube at 12:29 PM on February 14, 2001

jpoulos: "can't the estate tax be very easily avoided if one passes on one's estate before one dies?"

Mick: "Nope, gift tax >$10,000"

But that's per child (and child's spouse). You have 6 kids and they're all married, you can give all 12 of them $10,000 per year. (My source for this is a Slate.com column on the estate tax, so if I'm wrong, blame Michael Kinsley).

posted by UrineSoakedRube at 12:32 PM on February 14, 2001

accountingboy>And if I recall correctly, if you use the $10,000 per year gift tax exemption it decreases your estate tax exemption by the same amount.

Aha! Now I get to correct you -- unless you exceed the $10,000 yearly amount, you don't decrease your lifetime exemption at all:

The rules let you give a substantial amount during your lifetime without ever paying a gift tax. The current amount (2001) is $675,000, and that amount is scheduled to increase to $1,000,000 over the next several years.

You don't use up any of this amount until your gift exceeds $10,000 to one person in one year. For example, if you make a $14,000 gift, you have used up only $4,000 of your lifetime limit.
- Kaye Thomas, Tax Guide for Investors

So there.

posted by UrineSoakedRube at 12:54 PM on February 14, 2001

lileks's point is all too valid: farmers are especially badly affected by inheritance taxes, and it'd be good to see specific exemptions. It's one of the reasons why rural communities in the UK are being broken up by the encroachment of the commuter belt.

I'm not even sure that, as it stands, a strict inheritance tax even works to redistribute the accumulated wealth of the ultra-rich. When Rupert Murdoch shuffles off to the afterlife, I'm pretty sure that his kids won't face a bill from the tax man; Jimmy Goldsmith flew from France to Spain in order to die out of the reach of the French treasury; and so on.

But when I look at the current incumbent of the White House, it makes me wish that dumb children couldn't benefit disproportionate to their abilities from the munificence of their parents and associates.
posted by holgate at 1:15 PM on February 14, 2001

I stand corrected. There's another guy here at the office that deals with tax on the dead. My primary trade-in-stock is with the living.

And just so you guys know why it costs so much to have your taxes prepared, someone is getting billed for the time I spend here on MeFi. That person has their own trust fund, had to pay eight figures (excluding those after the decimal point) in estate taxes when their parents passed away, hasn't worked a day in their life, is incredibly arrogant and irresponsible, and whines to me at how much tax they pay (as a percentage of total income, they pay less than I do, and my wife and I combined are sub-$75k with bay area cost of living).
posted by OneBallJay at 1:16 PM on February 14, 2001

holgate>lileks's point is all too valid: farmers are especially badly affected by inheritance taxes, and it'd be good to see specific exemptions. It's one of the reasons why rural communities in the UK are being broken up by the encroachment of the commuter belt.

Yes, but those exemptions would have to be very carefully tailored in order to avoid creating giant loopholes. Say I have 2 million dollars. I want to give it all to my son, without paying taxes on any of it.

If a blanket exemption were made for all farms and businesses, I could just buy 2 million dollars worth of farmland, hire a manager and farm laborers so that I can make a little money and legally claim that it's a farm, then give it to my son upon my death, tax-free. Then he can sell it a couple of months later. Voila, 2 million, estate tax free.
posted by UrineSoakedRube at 1:22 PM on February 14, 2001

Whoa. I don't pay attention for a while, and the post explodes. Waaaaaaay back up there, Accountingboy said:
And as for selling the farm to pay the taxes, there are other options. Why not take out a loan with the land as collateral? Sounds like your friend didn't enjoy farming that much.

Ah yes, the common MeFi curse of talking Out of One's Ass. My friend in question had no credit rating, whatsoever. He dealt in cash or barter his entire life, and his brother was the one who had a real job (i.e., non-farm).

Another amusing anecdote to illustrate this point: After the estate was settled, he went to get a cell phone. He was told that because no credit reporting agency can find anything about him, he'd have to leave a $1,000 deposit to even get a cell phone. Think he'd get a six figure loan? Boy, I don't. Think he wants to be in debt? Wrong.
posted by norm at 1:24 PM on February 14, 2001

I agree that talking out of one's ass is a serious problem, but if the land that was owned was worth enough that half of it caused this brother to go into an estate tax situation, I think it's very unlikely that a financial institution wouldn't issue a loan with said land as collateral. There's a big difference between getting a secured-by-property loan and being able to activate a cell-phone account without a credit rating. By the way, you throwing in facts after my post that a normal person wouldn't assume to be the case does not constitute me talking out of my ass. Most farmers I know deal with farm credit bureaus and the like, and don't live their lives in economic isolation from what is becoming the norm of life in America ($8,000 per family in credit card debt and rising).

And as for "Think he wants to be in debt?", well that's what planning is for. If you want to stay out of debt completely you have to prepare to pay known expenses. It's not like estate tax just popped the day before the brother died. It may seem absurd to save up cash for your estate tax, but you do know that the money will be required, and it wouldn't be hard to estimate how much it would be. You could just put it in a special "estate tax" piggy bank (it would have to be a big one) and your heirs could just send it in to the IRS along with a Form 706.

Think of it this way: if there was no withholding, we'd all have to save up cash to pay our income taxes every April.
posted by OneBallJay at 1:44 PM on February 14, 2001

I don't have any problem with adjusting the estate tax upward to, for example, recognize the skyrocketing value of residential property in many urban areas. (A friend's house bought 2 years ago for $255K was just re-appraised at $320K!) And I'm glad to hear Mike being suddenly anti-suburban-development. (Or was that just sarcasm?) The farm example is a good one where the policy could be adjusted. For those worrying about a hard hit, estate planning can often avoid it, from corporations to trusteeship to joint property. You just have to think about this stuff well in advance. The fact that so few people still pay is evidence that most of them are doing this planning.

But the bottom line position for me is that Warren Buffett is right. The America of the 20th century was one built on the continued hard work of people motivated to get ahead. If we decide that instead we want to reward the children of hard workers, the United States will stagnate as a center of innovation. It's a recipe for becoming a second-class economic power.
posted by dhartung at 2:04 PM on February 14, 2001

Question for the anti-estate-tax gang: I'm going to wave my magic wand and raise the estate tax exemption to $5 million -- heck, I'll go so far as to raise it to $10 million when dealing with family-owned, working farms. The specter of losing the farm to the tax man is now no longer an issue to the overwhelming majority of family farmers. Do you still object? (I've felt for some time that the exemption should be cranked up for family businesses and family farms, but [unsurprisingly, given my political beliefs] I don't see anything wrong with the idea of the estate tax.)

Question two: If I were to win $10 million in the lottery, do you object to the fact that I'll have to pay taxes on my gambling winnings?
posted by snarkout at 2:14 PM on February 14, 2001

Think of it this way: if there was no withholding, we'd all have to save up cash to pay our income taxes every April.

You mean you don't have to save up cash to pay your income tax every April?

I've been doing that since I was 16, and as often as not I still can't cover the bill.

-Mars
posted by Mars Saxman at 2:25 PM on February 14, 2001

Just a reminder for those who scanned the article: the Gates mentioned is "Bill Gates' father, William Gates, Sr." (And someone needs to update their numbers -- on this Gates Foundation page, our favorite Chief Software Architect is "William Gates III," but his father is "William H. Gates, Sr." Unless there's a William Henry Gates, Jr. who mysteriously disappeared....
posted by tregoweth at 2:33 PM on February 14, 2001

snarkout: yes and yes (although the lotto one is a bit slippery).

I am against taxes based on gain. I believe consumption & usage based taxes are the best way to go.
posted by Mick at 2:36 PM on February 14, 2001

Mars,

Being as how I'm a tax accountant, I'm quite anal about making sure my withholding is adequate for my income. I try to have it come out pretty close - never have I paid more than $200 or received a refund more than $300. Of course, I'm not self-employed and have very little taxable investment income. But if you have taxes taken out of your paycheck, and still come up short on 4/15, and this arrangement is not to your liking - have your withholding adjusted upwards by (your average tax bill/# of pay periods in a year). Talk to whoever you get your check from to change this.

Some people like paying all of it in April cause they can make interest on the money during the year, but Uncle Sam tries to minimize that (and their collection costs) by requiring estimated payments from these folks.
posted by OneBallJay at 2:44 PM on February 14, 2001

The title for this link seems misleading to me; it implies that these guys are opposing the tax itself rather than the repeal of this tax.

You're right, harmful, it should have said "fight the estate tax repeal."

It was late.

Wow, this item really struck a chord.
posted by aflakete at 3:09 PM on February 14, 2001

No one has yet mentioned that the majority of assets taxed under the estate tax - stock, bonds, etc. - have NOT been taxed during the decedant's lifetime. These are considered capital gains (and constitute the majority of actual wealth held in the U.S. as compared to the yearly income of any one person. The consequence of this is that if the estate tax was repealed you would have a large chunck of assets and wealth that would NEVER be subject to taxation. The consequence of that would be a permanent aristocracy as the accumulation of wealth by the upper 1-2% accelerated at breakneck speed.

posted by edlark at 3:15 PM on February 14, 2001

I just have to say: kevincmurphy is my hero. There are a lot of great arguments in this thread, but kevin really said what I wanted someone to say.

Also, Mick: I agree with you, I'd love to see the income tax supplanted by increased sales taxes. That way we're taxing consumption rather than value-production. But somehow I doubt it will ever happen.
posted by wiremommy at 4:55 PM on February 14, 2001

Mick>I am against taxes based on gain. I believe consumption & usage based taxes are the best way to go.

wiremommy>I'd love to see the income tax supplanted by increased sales taxes. That way we're taxing consumption rather than value-production.

So why is it better to tax usage and consumption than to simply tax income from all sources? And wiremommy, can you give me an instance where "value-production" occurs independently of "consumption"? Why discourage "consumption" and encourage "value-production" via the tax code?

posted by UrineSoakedRube at 6:17 PM on February 14, 2001

This has been some interesting reading. It seems as if there are two groups of posters here: Those who have read Atlas Shrugged, and those who haven't. So for all you folks who think we should steal from the rich and give to the poor, I have just three words for you...

Read Atlas Shrugged.

posted by attitude at 7:04 PM on February 14, 2001

Why discourage "consumption" and encourage "value-production" via the tax code?

Sustainability. The idea is that you should be taxed based on the amount of stuff you consume (i.e., buy and benefit from) rather than taxed based on the work you do. That way people who produce a lot of value but live within their means are rewarded, whereas people who make the same amount of money but purchase more goods, i.e. derive more benefit from the material largesse of our society, are taxed at a higher rate.

I think moving to sales tax is impractical at this point for any number of reasons, but I do think it's an interesting idea to consider and it gives us a new perspective on taxation and consumption.

Read Atlas Shrugged.

Did. Three times. Ayn Rand's philosophy works great in the enclosed fictional system of her novel, but she conveniently leaves out a few little things that might impair her vision of a totally laissez-faire world. Correct me if I'm wrong, but I seem to recall that Atlas Shrugged contains no children, no senior citizens, no sickness, no handicapped individuals, no racial prejudice, and no environmental repercussions for anything, ever. Businessmen are always noble and true and act out of enlightened self-interest. They are always far-sighted and they never make a poor decision or have a bad day. It's an interesting world she creates, but it's nothing close to the real world.

I agree with Rand that self-interest and selfishness are powerful economic motivators, and when capitalism works, it works largely predicated on that fact.

But I think most of us are not willing to wait for the invisible hand of the marketplace to catch up with businessmen when, out of short-term self-interest, they do something potentially dangerous to the public good, like dumping toxic waste or selling tainted meat.

That's why we regulate industry. Not because we're a bunch of parasites who just want to leech off the people who create value in this world. But because we recognize that the people who create value in this world are still human beings who make mistakes. Rand doesn't allow for that fact in Shrugged. Dagny and Reardon and Galt are interesting characters, but they are barely recognizable as human. Their only errors are philosophical. You can't imagine Dagny flubbing up a railroad schedule because she's PMSing; it's not allowed in Rand's hermetic A=A world. Value-creators are ALWAYS totally dedicated to creating value. Parasites are ALWAYS parasites. It'd be comforting if the world really was that absolute, but it's just... not.

Rand was, at least, intellectually honest enough to write it so that two of her four main characters had inherited their wealth and positions of influence. I give her props for that, I guess.
posted by wiremommy at 7:39 PM on February 14, 2001

The only potential problem I see with consumption taxes is that it's a lot easier to stop buying things you don't really need than it is to stop working for a living. Increasing the tax would lead to some people putting off big purchases, just like an interest rate hike leads to people putting off buying a house. And that means you need even higher tax rates to make your budget, which even further depresses people's inclination to buy. Then, when they do have to buy something they actually need, they get all disgusted about how much cheaper it would be if the government didn't take a cut.

Like it or not, consumption is what drives demand, which is what keeps most people in this country employed. It seems to me that a sizable tax on consumption could lead, possibly, to an economic slowdown.
posted by kindall at 9:11 PM on February 14, 2001

What mick said.

GST. Goods and services tax. You want to save money stop buying goods and services that aren't needs and you have saved money. Your rich and want to buy lots of things to keep you happy, you pay tax on all those goods and services.

In Australia the only problem with the GST is that it was not implemented across the board. There are goods and services which do not get taxed.
posted by Zool at 9:18 PM on February 14, 2001

Actually the increase in cost of goods would be negated by the increase in take-home. Also if payroll taxes were abolished the cost to manufacture would decrease as well.

Just imagine if you got 100% of your paycheck. Kinda sickening that you have to imagine what that's like.


posted by Mick at 5:20 AM on February 15, 2001

Is there any way to set up a consumption-based tax so that it's not a regressive tax system (that is, one where the rich are not taxed proportionally less than the poor)? Can anyone site some research into whether just eliminating the payroll tax would do it?

And is encouraging a markedly sharper savings rate automatically a good thing? I know the high savings rate is one of the things that's been giving Japan's economy fits the last ten years (although it sure worked well for the thirty years before that).
posted by snarkout at 7:29 AM on February 15, 2001

Read Atlas Shrugged.

No.

Having hairshirted my way through "The Fountainhead," which dares to ask the question, "What if they held a novel, and only terrible assholes showed up?" I'll have to pass.

Rand doesn't write about people, she writes about Dogma and Big Ideas (tm) and Pontificating Horseshit Merchants. Hers is an airless universe where the not-so-hidden message seems to be: There are some people who just know best, and you're not one of them, so get in fucking line and shut up.
posted by Skot at 8:46 AM on February 15, 2001

not-so-hidden message seems to be: There are some people who just know best, and you're not one of them, so get in fucking line and shut up.

Wow, did you get some bizzarro copy of the book? That's the exact opposite of objectivism:

Man — every man — is an end in himself, not the means to the ends of others. He must exist for his own sake, neither sacrificing himself to others nor sacrificing others to himself. The pursuit of his own rational self-interest and of his own happiness is the highest moral purpose of his life.
posted by Mick at 10:00 AM on February 15, 2001

Just imagine if you got 100% of your paycheck. Kinda sickening that you have to imagine what that's like.

At the same time, imagine getting paid 40 percent less.

When we accept jobs, we do the math, do we not? It's not like income taxes are a big surpise, the tax man a masked burglar who breaks in and "takes" his share.

Here's how it works: We get offered a job and are offered $100,000 a year. We do some math and arrive at, oh, $60,000 take-home pay. "Great! I'll take it!" we say, and we have made it known that we are willing to do the work for $60,000 take-home.

So, in a world without income taxes, our employer -- whose biggest expense is payroll and tries to pay the absolute least he can, not the most -- knows that we are willing to do the work for $60,000 take-home. Poof! That $100k job offer becomes a $60k job offer, and we take it. Or, if income taxes are cut in half, that $100k job offer becomes a $80k job offer. And we take it.

It is a myth that, if income taxes go down, our take-home pay will go up. Our pay will instead go down or not rise as quickly, and we net out. Such is the peril of the free market and the elastic cost of labor. Damn you, Adam Smith!
posted by luke at 10:01 AM on February 15, 2001

No, I understood Rand's message just fine. I just don't think she believed it applies to anyone except to the Elect that are worthy of the Message. Save for about seven people in the book, everyone on earth is just a self-immolating pack of reactionaries who keep picking on poor, iconoclastic Howard Roark, whose ideas of "rational self-interest and happiness" include raping women who apparently just really need it and dynamiting buildings. Rand cloaks her special brand of totalitarianism-lite with just enough individualist gauze to make it look vaguely pretty. But there's nothing human at all under the veil. It's repellent.
posted by Skot at 10:28 AM on February 15, 2001

Wow, did you get some bizzarro copy of the book? That's the exact opposite of objectivism: Man — every man — is an end in himself, not the means to the ends of others. He must exist for his own sake, neither sacrificing himself to others nor sacrificing others to himself. The pursuit of his own rational self-interest and of his own happiness is the highest moral purpose of his life.

Mick, maybe the disagreement here is that, the way Rand writes the characters in her books, the people who follow her philosophy "just know best, and" if a character holds another philosophy-- ANY other philosophy-- Rand's attitude toward that character seems to be "get in fucking line and shut up".

I can't get with any ideology that claims definitively that anyone who doesn't follow that ideology is literally deficient for choosing an alternative path.

Luke: I agree with your points about going to sales taxes rather than income taxes. That why above I mentioned that it's probably functionally impossible to implement at this point. The effects you mention would theoretically equalize out over time, but I wouldn't want to ride through that particular rough patch myself. Another stumbling block would be sticker shock-- when the prices of goods go up drastically due to increased sales tax, people would panic and freeze spending. It would take a while for them to realize that it's okay for things to be more expensive because they now have more money actually in their pockets. Also, I'm not sure what dramatically increased sales tax would do to inflation. But like I said before, I think it's a useful concept to give us a different perspective on taxation.
posted by wiremommy at 10:51 AM on February 15, 2001

Hers is an airless universe where the not-so-hidden message seems to be: There are some people who just know best, and you're not one of them, so get in fucking line and shut up.

Has anyone else intentionally avoided Ayn Rand after being beaten into submission with ham-handed Randian philosophy on the Internet for years?
posted by rcade at 11:12 AM on February 15, 2001

And as for selling the farm to pay the taxes, there are other options. Why not take out a loan with the land as collateral? Sounds like your friend didn't enjoy farming that much.

Er, well most family farmers have already mortgaged their land about as much as possible. Farming is an expensive and risky undertaking. It's not as simple as getting some more debt to pay taxes. And that doesn't even touch on the real question: should they have to?

My father-in-law runs a small dairy farm and he also raises a few hundred acres of corn and soybeans. He, his son (who's actually an employee), and one hired hand do all the work. The value of the estate (the property, equipment, and buildings) easily exceeds the estate tax limits. They're also mortgaged for several hundred thousand dollars, and the required payments pretty much rule out taking on significantly more debt. When my father-in-law dies, should the family be forced to sell large portions of the farm just to keep it? There won't be cash available to pay the taxes. The son has worked just as hard as the father during school and full-time now that he's been out of college (for the past seven years or so) and will probably continue to do so all his life just like his father has and his father before him and his father before him. Incorporation would be too expensive and would likely require hiring more people to deal with all the increased trouble.

Maybe the estate tax is fair on some estates, but this isn't one of them.
posted by daveadams at 11:17 AM on February 15, 2001

Well, your father-in-law is in fine shape, dave. The estate tax is on assets valued over ~600k minus debts and expenses (his employees count as expenses). So, if he’s mortgaged for “several hundred thousand dollars” he won’t pay any taxes or a very slight amount.

Plus, most Reps with a sense of equity or trying to raise the exemption amount to one million. If your father-in-law has some more years left, it’ll be alright. That, and other reforms to help small businesses, goes along the line with the sanity descending on Washington from Gates Sr.
posted by capt.crackpipe at 12:08 PM on February 15, 2001

USR>Why discourage "consumption" and encourage "value-production" via the tax code?

wiremommy>Sustainability. The idea is that you should be taxed based on the amount of stuff you consume (i.e., buy and benefit from) rather than taxed based on the work you do. That way people who produce a lot of value but live within their means are rewarded, whereas people who make the same amount of money but purchase more goods, i.e. derive more benefit from the material largesse of our society, are taxed at a higher rate.

I think moving to sales tax is impractical at this point for any number of reasons, but I do think it's an interesting idea to consider and it gives us a new perspective on taxation and consumption.

Why is a tax on consumption more sustainable than a tax on "value-production"? One does not occur without the other. If you mean sustainability in the sense that we might run out of resources, well, that's what market forces are for. And why does someone who purchases more goods obtain more from society than someone who creates more value? If I sell a plot of land that has appreciated in value solely due to external economic forces, haven't I obtained the capital gain due to "the material largesse of our society"?

posted by UrineSoakedRube at 12:40 PM on February 15, 2001

So for all you folks who think we should steal from the rich and give to the poor, I have just three words for you... Read Atlas Shrugged.

Your use of the term "steal" indicates that you are not open to rational discussion. Why don't we call the arbitrary convention of nonresident property ownership theft? How about use of the patent and copyright system - stealing from the public domain! Let's see, use of public resources for private gain, how about we call that theft too?

This is not a game you can win.

-Mars
posted by Mars Saxman at 12:54 PM on February 15, 2001

So, in a world without income taxes, our employer -- whose biggest expense is payroll and tries to pay the absolute least he can, not the most -- knows that we are willing to do the work for $60,000 take-home. Poof! That $100k job offer becomes a $60k job offer, and we take it.

Well, no. Because your employer's competition has $100,000 to hire someone where he once had $60,000. And this competitor might be willing to spend the extra, even if your employer is not.
posted by kindall at 1:13 PM on February 15, 2001

Why in the world would she pay $100k when I've already established I'm willing to work for much less? Employer B offers me $65k, and Employer A finds someone with my same skills and pays him $60k.

The numbers are really irrelevant. It's the purchasing power that matters. So long as I am paid enough to pay my bills and have a little extra for X cans of Schlitz each week, I'm happy. It doesn't matter whether I'm paid $100k minus taxes, $60k minus no taxes, or $500 trillion gazillion but cans of Schlitz, thanks to a regressive consumption tax, cost $50 million per.

Really, we could end all these games if my employer would simply pay my bills and leave a case of Schlitz by the door each Friday.
posted by luke at 1:26 PM on February 15, 2001

Why in the world would she pay $100k when I've already established I'm willing to work for much less?

Same reason CEOs and athletes get millions of dollars. Because if she doesn't, someone else might.

Employer B offers me $65k, and Employer A finds someone with my same skills and pays him $60k.

And then Employer C offers you $70K... eventually, of course, since everyone but Employer A has hired all the best people, even they will be forced to increase their salaries.
posted by kindall at 1:42 PM on February 15, 2001

Unfortunately, I'm a copy editor, not a basketball player, at least not a good one, and I already work for Employer B in a market with only two employers.


posted by luke at 1:48 PM on February 15, 2001

You can also tell a Randian by the repeated use of the words "men with guns" as in "you only pay your taxes because if you don't men with guns will show up and take it from you". If you say that you pay your taxes simply because it's the law, however much disliked, you get insulted as a sheep etc. I suppose men with guns are also the only thing keeping us from driving on the sidewalk, which might be a shortcut in keeping with a Randian rational self-interest (though I'm sure one of them will pipe up with an exception in that case). We don't drive on the sidewalk because there is a community interest in having separate spaces for automobiles and pedestrians, just as there is a community interest in having public and private property. We pay part of our income in taxes because there's a community interest in having government provide certain services. When pressed, Randians will admit that national defense is the only one of these services they'll support, which merely means they are quibbling about where the line must be drawn; they've already admitted the logical inconsistency.

I'd love to see a scheme implemented for user fees for city streets. Technologically I could see it done (micropay system tied to GPS or sensors) but how would it be applied? Busy 4-lane arterials would be richer? Residential dead-ends wouldn't earn enough money for asphalt? Cost-conscious consumers would move to cheap-road exurbia? Talk about your complicated solutions to relatively simple problems.
posted by dhartung at 1:50 PM on February 15, 2001