Joseph Sabino Mistick: Take a page from Carnegie's 'gospel'
When Andrew Carnegie wrote his essay “Wealth,” he introduced the world to the notion that the super-wealthy have an obligation to share their good fortune with those who helped them earn that wealth.
In what was later dubbed “The Gospel of Wealth,” Carnegie condemned the passing of excess wealth to the children of the deceased, calling it “misguided affection.” While the kids deserved a healthy stipend, handing it all to them often led to their downfall.
One solution was not a new idea. Carnegie called for the expansion of a progressive estate tax, not on the meager savings of working families, only on great fortunes. That caught on in America.
And, according to Carnegie, another solution would be to convince the wealthy to treat their fortunes as “trust funds” and spend them “to produce the most beneficial results for the community.” That started a tradition of American philanthropy, which caught on, too.
Compare that to the so-called “tax reform” proposals that Republicans are fighting for in Washington. Both of Carnegie's solutions for the “unequal distribution of wealth” are targeted for elimination, and the propagandists are hard at work distorting the truth.
They call the estate tax a death tax, implying that all of us who share the common denominator of death will be taxed for the sheer act of dying. The truth is that 99.8 percent of Americans will never pay estate taxes when they die because they are exempt.
Only the wealthiest Americans — about two out of every 1,000 — will owe any estate tax. And, with the help of tax professionals, whatever is owed will be reduced further through loopholes and deductions.
Charitable giving, the philanthropy Carnegie favored, will also take a hit with the elimination or reduction of the estate tax. Some charity comes from the heart, but much is given just to reduce taxes. According to the Tax Policy Center, charitable bequests could drop by $4 billion.
Another $1.7 billion of charitable giving could be lost with a Trump proposal to allow tax-deductible church donations to be used for partisan political purposes. According to the Joint Committee on Taxation, this gift to the extreme right would divert charity away from the needy and into the coffers of politicians.
And the biggest blow to charitable giving will result from changes designed to garner average taxpayer support for “reform” tailored for the rich.
According to CNN Money, the Indiana University Lilly Family School of Philanthropy has concluded that doubling the standard deduction and reducing the top tax rate, all of which appeal to average taxpayers, could “decrease charitable giving by as much as $13 billion.”
This means that social services that are now provided by charities will have to be funded locally or by the state. And you can count on those taxes going up.
Carnegie believed that the most powerful Americans would want what is good for America, and not just the rich, and that his gospel would “solve the problem of the rich and the poor” and “bring peace on earth.”
It started as a prayer, and it makes no sense to change it now.
Joseph Sabino Mistick is a Pittsburgh lawyer (joemistick.com).