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Andrew Cassel and Dan Rottenberg

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from: Dan Rottenberg

The Estate Tax: A Blessing in Disguise?

Posted Wednesday, March 7, 2001, at 11:50 AM ET

Andy,

I've already pretty much done the survey that Noah suggests. Back in the '80s I compiled three lists of "The Most Generous Americans" for Town & Country; in the late '90s I did two similar lists for the late lamented American Benefactor; and in 1998 I assembled a list of Philadelphia's biggest givers for Philadelphia magazine. The bottom line: New money is bigger--and more generous--than old. Aside from Walter Annenberg, the Pews, Henry Rowan, and Leonard Abramson (none of whom really qualifies as an Old Philadelphian), Philadelphia is painfully short of philanthropists capable of dispensing $100 million gifts at a crack, a la George Soros or Bill Gates. While entrepreneurial donors elsewhere have learned to use philanthropy to leverage their business, social, and ego agendas, many Philadelphians still make their gifts anonymously in the quintessentially modest Quaker tradition. If American philanthropy today is symbolized by the egomaniacal Ted Turner--who pledged $1 billion to the U.N. but has so far dispensed less than one-tenth of that amount--Philadelphia philanthropy is embodied in the physician who anonymously gave $10 million to Penn's medical school in 1993.

On the other hand, Philadelphia seems to have a much stronger corps of midlevel donors than other cities. The local United Way lists 474 donors who give $10,000 or more annually--far more than any other United Way campaign claims. (Atlanta, the runner-up, has only 328.)

But I'm curious to know what you make of the current groundswell of interest--pro and con--in eliminating the federal estate tax. For years my readers at Family Business magazine--people who own and run family companies--felt like isolated voices crying in the wilderness on this issue. They believed the estate tax was the biggest impediment to the survival of family companies from one generation to the next. But nobody else much cared about this issue, until now.

I, in my customary contrarian role, have argued that the greatest threat to family companies isn't the estate tax; it's family members who are unprepared for or undeserving of the responsibilities they assume. I suspect the estate tax is really a blessing in disguise for them: It forces family business owners to seriously ponder just how badly they want to keep their company in the family and to plan accordingly. If the estate tax is repealed, this may be a case of "Be careful what you wish for--you may get it." What do you think?

Dan

the breakfast table
entries
12345678910111213141516
from: Dan Rottenberg

The Estate Tax: A Blessing in Disguise?

Posted Wednesday, March 7, 2001, at 11:50 AM ET
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Andrew Cassel writes a thrice-weekly column about the economy. He has been a columnist, business reporter, and national correspondent for the Philadelphia Inquirer since 1984. Philadelphia journalist Dan Rottenberg is a veteran of 16 years with alternative publications and the author of seven books, most recently The Inheritor's Handbook. He currently edits Family Business magazine.
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