Estate Tax Teleconference 2009

Estate Tax Teleconference 2009

Thank you for your interest in our December 15, 2009 Estate Tax Teleconference, featuring Bill Gates, Sr., Vanguard Founder John C. Bogle, Richard Rockefeller, SEIU International Secretary/Treasurer Anna Burger, Lee Farris (UFE), moderated by Mike Lapham (RW/UFE).

We thank all of our speakers for their support and the wonderful and unique contributions they made, and all those who joined as participants on the call.

The teleconference was attended by journalists from the Associated Press, Newsweek, the Wall Street Journal, Bloomberg News and many others.

Written statements from our featured speakers:

Read a message of support from New York City Mayor, Michael Bloomberg.

Listen to the teleconference (M4V 72.7MB)

IF YOU ARE A MEMBER OF THE PRESS and would like to speak with UFE staff or the other speakers about the estate tax, please contact Mazher Ali at or 617-423-2148 x101. For other inquiries regarding the estate tax, please contact UFE’s Estate Tax Policy Coordinator, Lee Farris, or 617-423-2148 x133.

Thank you again for your interest in this event, and keep checking our website for news updates on the estate tax.

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Estate Tax Statement from Michael Bloomberg

Estate Tax Statement from New York City Mayor Michael Bloomberg

December 17, 2009

Michael Bloomberg“Congress should act immediately to extend the estate tax at its 2009 levels. If Congress doesn’t act – and act soon – the estate tax will disappear completely in 2010, costing the federal government critical revenue at a time it desperately needs it. Extending the 2009 levels for a year would also give Congress time to develop a fair, permanent solution next year.

I happen to support the estate tax. Not only do we need the revenue, I think Warren Buffett gets it right when he argues that a meaningful estate tax puts a check on dynastic wealth, promoting the value of meritocracy in the process.”

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Strengthening the Estate Tax to Strengthen the Country (Huffington Post)

"If [the estate tax is] abolished or weakened, there are only three ways to make up the resulting shortfall: cut spending, raise taxes on the middle class, or pile it on to the national debt and leave it to our children and grandchildren who will inherit the consequences of the decisions we make now. This [is] why I and thousands of other wealthy individuals have joined a campaign led by United for a Fair Economy to call on Congress to strengthen the estate tax.

[W]e must acknowledge that the person who accumulates wealth in this country was not able to do that independently. The simple fact of living in America, a country with stable markets and unparalleled opportunity fueled in part by government investment in technology and research (something my family has plenty of firsthand experience of), provide an irreplaceable foundation for success and have created a society which makes it possible for some men, women and their children to live an elegant life. [...]

I believe that those of us who have benefited so greatly from our country's investment in our lives should be asked to give a portion of our wealth back to invest in opportunities for the future.

Society has a just claim on our fortunes and that claim goes by the name 'estate tax.'"

Read the full op-ed by Bill Gates, Sr. on


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Estate Tax Statement from John Bogle

Estate Tax Statement from John C. Bogle, Founder of the Vanguard Group

The following statement was delivered on UFE's 12/15/09 Estate Tax Teleconference.

John Bogle"Thank you and good morning everybody. First, to explain my biases, I should tell everyone, and make it very clear, that I am a life long Republican a dedicated member of a Republican party. Maybe not quite today’s Republican Party but certainly the Republican party of Theodore Roosevelt and the party of Abraham Lincoln.

And if you want some enlightenment, Theodore Roosevelt gave a wonderful speech called the New Nationalism back in 1910, in which he quoted Lincoln at some length. So you can pick up both of their philosophies about how America should work and the burden that should be bourn by those most able to bear it and things of that nature.

So I’m a classical Republican, classic Republican [sic] and just trying to explain how my Republican values fit into my demand as much as I can demand that we continue the estate tax at substantial levels as long as we can and into the future. I have made nice money in my day. Although I’ve never made any capital gains or anything out of Vanguard because when I created the firm Vanguard it was truly a mutual fund company, which is actually owned by the Vanguard shareholders. So my only participation in our profits is as a shareholder in the funds at the reduced costs we offer. That has been a very enlightened response that has served investors, our Vanguard shareholders, extremely well.

I speak, in a sense, this morning from the heart because I had my first attack in 1960 and had a heart transplant in 1996. So I now had almost 14 extra years of life. So I, like most people who have had modest wealth, which is kind of my category compared to the giant grown up money that sits up there. I got time to plan my estate with some care. And I’m taking care of my wife of course first, and I’m taking care of my children, I have 6 children and those 12 grandchildren which were mentioned in my introduction. And I’m leaving a substantial amount to Philanthropy. But I’m still left with a very substantial estate tax of what remains and I’m proud and pleased to pay it. And I think it’s a fair amount, it’s in the multi-millions of dollars.

But I have had a blessed life and I have benefitted from something that hasn’t been mentioned so far, and that is in my retirement plan, which I have been dollar averaging in since 1951. It’s my largest asset and 100% of that return is tax differed! So I’ve gotten a great advantage from the lack of taxation on those earning, which will have to be paid on my death/debt. So that’s why much of that is going is going on my philanthropy. But I’m going to have a substantial inheritance tax on it and I’m happy to pay it.

Even though this modest wealth, this wealth at large that I’ve accumulated, it wouldn’t be there, as Mr. Gates said, if I had not been born in the USA. It’s not only what Bill Gates said about all the advantages our society creates, it goes all the way back to fundamentals like the Declaration of Independence, the Constitution of the United States of America and the Bill of Rights. This is a nation founded on preserving domestic tranquility and justice for all. And we’ve all benefitted from it.

I’ve known many people in the financial business who’ve said, ‘I’m really proud because I did it all myself.’ And when someone has the temerity to say that to me, and a lot of people do, the first thing I say is ‘isn’t that wonderful, you did it all yourself. And I think that’s terrific, I don’t know many people who’ve done that. But how did you arrange to be born in the United States of America?’ - the very point that Bill Gates made just a moment ago.

Our first right has created enormous wealth and stability of property and for us to think, us who owe these taxes that we don’t want to pay our fair share of the cost of running this nation. When our young citizens, let us not forget, are dying in wars out there trying to protect democracy and the nation that we’ve built up. And it seems to me, for lack of another word, quite outrageous.

I haven’t even tranced on the fact in these comments on how I so strongly favor the inheritance tax and the estate tax that we, who are privileged to pay the taxes, that we should. If we don’t, someone else will. And they will pay it either through a burden on the middle class, far less able to bear that burden than we are, or be shifted in terms of inflation, to those even less able to bear it, if we don’t keep this tree-influx of revenues.

We need every penny we have to reduce the federal debt. So let me be very clear, I support the McDermott compromise, I think its reasonable. And I will be very happy to pay my share of whatever it takes when the time comes for me to go to my reward.

Thank You."

Return to UFE Estate Tax Post-Teleconference Report

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Estate Tax Statement from Bill Gates, Sr.

Estate Tax Statement from Bill Gates, Sr.

The following statement was delivered on UFE's 12/15/09 Estate Tax Teleconference.

Bill Gates, Sr."In the Fall of 2000, riding in an elevator in Seattle, I overheard a conversation between two fellow lawyers, one of whom was proudly proclaiming that they were 'very close to repealing the estate tax.'  It hit me like a ton of bricks, and I decided at that moment to do something about it. 

A century ago, President Theodore Roosevelt expressed alarm about the dangerous concentration of wealth and power in the U.S. and called on the incoming 60th Congress to establish a federal estate tax on large fortunes. Its primary objective, Roosevelt said, 'should be to put a constantly increasing burden on the inheritance of those swollen fortunes which it is certainly of no benefit to this country to perpetuate.'
A century later, after a 12-year assault, the federal estate tax is here to stay. The anti-tax organizations and wealthy families that spent millions in lobbying funds to avoid paying billions in taxes have conceded they don’t have the Congressional votes to abolish the tax. But that doesn’t mean they won’t continue trying to erode it.

The estate tax cuts enacted under President Bush suspends the tax in its entirety for the year 2010 creating a bizarre incentive for wealthy people to prematurely die. Then in 2011 the estate comes back into effect under 2001 rules. Congress must act in this month to avoid such foolishness. The House of Representatives has acted by extending the 2009 rules through 2010. The Senate has just days within which to do something.

The current estate tax generously exempts the first $3.5 million of a person’s estate and $7 million for a couple.  The option taken by the House is to freeze the tax at these 2009 levels. Other options include establishing a progressive rate structure so that smaller estates pay lower rates while larger estates —those with over $50 million — pay higher rates. Whatever Congress does, it should not dilute the tax from its 2009 current level.

A one year patch is required to avert this fiscally and morally problematic scenario.
The facts are clear: the estate tax raises substantial revenue from those with the greatest capacity to pay. Abolishing the estate tax would cost more than $1 trillion. There are only three ways to fill that shortfall: cut spending, raise taxes on the middle class, or, the current favorite, pile it onto the national debt. A national debt which will register deficits expressed in trillions of dollars.
Instead of leaving a prodigious national debt for our children and grandchildren we should retain a robust estate tax and avoid the unprecedented interest costs of that debt.
Yet, a central criticism of the estate tax is the view that anyone who works hard and saves his money should be able to leave the results of his labor to his family.

Now I’m not against hard work, saving money, or taking care of your family—in fact I believe strongly in all of those things.  But I also believe that the person who has worked hard, saved money and accumulated wealth to take care of their family was NOT able to do that independently. 

A more careful look would disclose another fundamental factor in wealth creation—being born in America.  (What Warren Buffett refers to as winning the game of ovarian roulette.)

What is so special about place of birth? 

First off, economists agree that the presence of a stable market for goods and assets adds 30% to the value of everything we own—we have that in America, and that increases wealth. 

Second, economists tell us that 50% of the annual growth in our economy is a function of the introduction of new technology—we have that in America, and my family knows first-hand about how new technology can increase wealth.

But the benefits of being an American don’t stop there. 

In no other country in the world is the federal government spending more money on research.  The United States spends some $96 billion every year on fundamental research in universities and laboratories all over this country. 

And what comes of this research?  Well for starters how about things like jet engines, integrated circuits, the human genome, or the Internet.  Clearly the largest and most generous venture capitalist in the universe is Uncle Sam.

It is clear that the folks who have become wealthy from this significant social investment did not do it alone.  I believe their estates owe something back to the society that enabled the creation of that wealth.

Lester Thurow sums it up well. He says: 'The payoff from social investment in basic research is as clear as anything is ever going to be in economics.'

So again, how do people manage to get so rich in this country? It is because:

  • We have working and stable markets that maximize value;
  • Our science and technology keep producing new products and ways to get things done;
  • We have a government continuously and gratuitously injecting money into new and useful research;
  • And this is all topped off with a work force of ingenious graduates from an education subsidized by our government.

Warren Buffett says it, as usual, so very well:

'I personally think that society is responsible for a very significant percentage of what I’ve earned.  If you stick me down in the middle of Bangladesh or Peru or someplace, you’ll find out how much this talent is going to produce in the wrong kind of soil.  I will be struggling thirty years later.  I work in a market system that happens to reward what I do very well—disproportionately well.'

Can there be any question about the rectitude of this society recovering from the heirs of its most successful citizens, a portion of the fortune they leave at the time of their death? 

American society has made it possible for these men, women and their families to have an elegant life, first class education, and virtually unlimited options about where to go and what to do. 

Society does have a just claim on these fortunes, and it goes by the name of the Estate Tax."

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Estate Tax Statement from Anna Burger

Estate Tax Statement from Anna Burger, SEIU Secretary/Treasurer

The following statement was delivered on UFE's 12/15/09 Estate Tax Teleconference.

Anna Burger"Just yesterday, President Obama met with CEOs of the nation’s biggest financial institutions. His message to them, one I think we can all agree with, was: we need an economy that works for everyone, not just for Wall Street and the wealthiest Americans.

I don’t need to tell all of you how dire the situation is for most working families right now: the unemployment rate is at 10 percent. Twenty-seven million Americans are unemployed or underemployed. One in seven mortgages are delinquent or in foreclosure.

And yet, while average Americans are worrying simply about whether or not they can keep their home, estate tax legislation right now in Congress would lavish $230 billion in tax cuts on a few extremely wealthy families who have already inherited millions of dollars.
Why? Because a few extremely wealthy families and George W. Bush—yes, that guy—said so.
This year, only 3 out of every 1000 estates will be large enough to be subject to any estate tax. The remaining 997 out of a thousand of us get nothing from this tax cut bonanza.
Want to know how the legislation works? Consider a wealthy family with two children. Each child could inherit $3.5 million, tax-free. That means each child would receive more, tax-free, than the average worker would earn in two lifetimes. And the worker would be paying taxes on their earnings.
Each of these children would receive more, tax-free than 240 minimum wage workers would receive in a year.
So who’s behind this unfair legislation?
United for a Fair Economy has documented that 18 families that stand to gain $70 billion if the estate tax is repealed have spent tens of millions of dollars lobbying to weaken or repeal the estate tax.
During the Bush years, the richest one percent of Americans received $550 billion in tax cuts. The richest 1 percent in the U.S. hold more wealth than the bottom 90 percent.  
Yet here we are considering how we can continue to extend Bush-era policies that favor a few rich families at a time of record deficits, and while millions of Americans struggle to keep a roof over their head and put food on the table.
It’s fiscally and morally irresponsible.
We need Congress to say no to the demands of 18 wealthy families, and to stand up for the other 305 million of us."


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Do the Rich Owe America for Their Fortunes? (WSJ blog)

"United For a Fair Economy, the left-leaning policy group, held a press call Tuesday to argue for preserving the estate tax before it temporarily expires in 2010.

During the call, Vanguard-founder [John] Bogle made an interesting argument for why the wealthy should pay the tax. In short, he said the wealthy owe a large part of their fortune to the country and its government.

[Bogle stated,] 'Our birthright has created enormous wealth and stability of property and for us to think that we don’t want to pay our fair share of the costs running this nation when our young citizens, let us not forget, are dying in wars out there trying to protect democracy and the nation we built up, it seems to be quite outrageous.'

Bill Gates Sr., father of the Microsoft founder, made a similar argument. He cited economists who estimate that the nation’s stable market for goods and assets adds 30% to the goods we own.

He said 50% of the annual growth in our economy is a function of new technology...often created with government support [...]

'The largest and most generous venture capitalist in the universe is Uncle Sam,' he said. 'And it’s clear that those who become wealthy did not do it alone. The people owe something back to society that enables them to create that wealth.'"

Read the full blog by Robert Frank on Wall Street Journal Blogs.

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Why Shouldn't Paris Hilton Pay Her Fair Share? (UFE Op-ed)

"In the decades before our nation was born, colonists came to America to escape the tyranny of the crown and the powerful aristocracies that dominated much of Europe. Carving out their space on new soil, these colonists sought to create an economy built on merit and the equity of one’s own sweat, not the aristocratic bloodlines of one’s predecessors. [...]

[B]y the dawn of the 20th Century, America began to see vast sums of wealth concentrated into the hands of a very few industrialists and railroad barons. [...]

It was in this environment that President Theodore Roosevelt led the charge for a federal estate tax [...] Almost 100 years after its creation, Congress is poised to cast a crucial vote on the estate tax, a vote that could either weaken or strengthen what is left of the estate tax [...]

At the same time, the revenue raised from the estate tax supports vital public structures and systems – transportation and energy infrastructure, education and healthcare, among others. These essential structures lay the foundation of broad-based prosperity and economic stability for the next generation.  In the end, the estate tax is fundamentally about recycling opportunity for all."

Read the full op-ed by UFE's Executive Director, Brian Miller, on AlterNet.

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Estate Tax Expiration Sets Up Battle on Retroactive Restoration (Bloomberg)

"The imminent expiration of the federal tax on multimillion-dollar estates and a pledge by congressional Democrats to renew it retroactively next year marks a new phase in an ongoing battle over the levy.

Senate Finance Committee Chairman Max Baucus yesterday said Congress will seek to restore the tax retroactively in 2010 after Republicans objected to his efforts to adopt a stopgap measure to extend the current law for three months.

The tax now yields about $25 billion in revenue annually. The levy, on the books since 1916, is scheduled to lapse for a year on Jan. 1 under the provisions on a tax-cut bill enacted in 2001. It then would be reinstated in 2011.

The collapse of a last-ditch effort by Democrats to pass even a temporary extension surprised those on both sides of a debate that has raged for more than 15 years over whether to end what opponents term the “death tax”.

Lee Farris, senior organizer on estate tax policy for United for a Fair Economy, a Boston-based advocacy group lobbying for retention of the estate tax, said she hadn’t expected talks over a stopgap measure to collapse this week.

'I think it’s an outrage that with eight years notice, Congress couldn’t get its act together and prevent repeal of the estate tax,' Farris said.

The pledge to renew an estate tax retroactively presents both a legislative and a legal challenge, [...] [but] Farris said if Congress can resolve the issue quickly in 2010, the ramifications may be limited because most estates don’t file estate tax returns until about nine months after someone dies. [...]

For now, as of Jan. 1 the estate tax will give way to the capital gains tax when heirs sell bequeathed assets.

The tax, with a rate between 15 and 28 percent, would apply to estates in excess of $1.3 million and would be calculated on gains accrued since the asset was purchased. It would cover homes and land, stock certificates, collectibles such as art, and businesses."

Read the full article by Ryan J. Donmoyer on

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Bill Gates, Sr. and UFE in London's Wealth Bulletin

"A group of the world's wealthiest individuals are lobbying the US Senate to introduce tougher estate tax rules. The protestors, including Microsoft's Bill Gates, fund manager John Vogle and Richard Rockefeller, are calling on the Senate to act before the holiday break to strengthen the US estate tax laws. [...]

According to a statement from national nonprofit United for a Fair Economy today, the billionaires say low estate tax will result in significant losses for the federal government.

This revenue supports the vital public structures and systems - transportation and energy infrastructure, education and healthcare, among others.

'In making the 2009 estate tax cut permanent, the House of Representatives would give a huge tax-break to the wealthiest 1% of Americans over ten years, at a time when economic inequality has skyrocketed,' said Lee Farris, UFE's estate tax policy coordinator.

Bill Gates said: 'No one accumulates a fortune without the help of our society's investments. How much wealth would exist without America's unique property rights protections, public infrastructure, and academic institutions? We should celebrate the estate tax as an 'economic opportunity recycling' programme. It's our turn to pass on the gift.' [...]

In Germany, a similar lobby group has been gaining prominence. The German initiative, the Vermögende für eine Vermögensabgabe (wealthy people in favour of a wealth tax), was launched last spring, according to UK newspaper The Times."

Read the full article in The Wealth Bulletin (London).

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Estate Tax on the Radio

Talk Radio MicrophoneEstate Tax on the Radio

Below are radio news reports on the estate tax, featuring commentary from UFE staffers Mike Lapham and Lee Farris, and our partners, including Bill Gates, Sr., Vanguard founder John C. Bogle, and SEIU Secretary/Treasurer Anna Burger.

These reports have been widely broadcasted in the key battleground states of Maine, Washington and Montana, as well as the and surrounding regions.



December 17, 2009

"Service Employees International Union (SEIU) Secretary-Treasurer Anna Burger says the tax affects very few estates, and the current terms are generous. Burger noted that a wealthy family with two children can pass on $3.5 million to each child tax-free. She puts that in perspective for the more than 99 percent of Americans who are not affected by the estate tax.

'That means that each child will receive more tax-free than the average worker in America would earn in two lifetimes. And that worker will be paying taxes on their earnings.'"

Listen to our 12/17/09 Maine radio story on Public News Service.

November 30, 2009

"With so many big-ticket items on the table, such as health-care reform and climate policy, it's easy for an issue like the estate tax to get lost in the shuffle. That's the tax paid on the estates of multi-millionaires when they die. But the devil is in the details, says Mike Lapham of United for a Fair Economy, a Boston-based nonprofit group. He says several powerful groups have been working to repeal the estate tax for quite some time and, according to Lapham, one of the biggest misconceptions about the tax such groups have perpetuated is that it affects everyone."

Listen to our 11/30/09 Maine radio story on Public News Service.


December 18, 2009

"A familiar name here in Washington, Bill Gates, Sr., says the estate tax is only fair. He believes the "richest of the rich" are in that position because they have benefitted from living in the U.S., where taxpayers fund more than $90 billion a year worth of research and technology.

'Clearly, the largest and most generous venture capitalist in the universe is Uncle Sam. And it's clear that the folks who have become wealthy because of significant social investments did not do it alone.'"

Listen to our 12/18/09 Washington radio story on Public News Service.

November 30, 2009

"They say you can't take it with you and, in December, Congress must decide how much estates should be taxed when someone dies. The federal estate tax expires at the end of this year.

It doesn't affect most people - only one in a hundred is wealthy enough for their estate to be taxed - but some of the super-rich are lobbying to eliminate it. Groups such as United for a Fair Economy (UFE) disagree; its Responsible Wealth Director, Mike Lapham, points out that the tax averages 17 percent of a multimillion dollar estate, and he believes paying it is the right thing to do."

Listen to our 11/30/09 Washington radio story on Public News Service.


December 17, 2009

"Senate Finance Committee Chair Max Baucus has called for keeping the estate tax in place, and he is being echoed by some of the richest families in the country this week, including Bill Gates, Sr. The Senate may vote Friday on closing the one-year gap in the tax that is looming for next year.

John Bogle, founder and retired CEO of The Vanguard Group and one of the "richest of the rich," is pulling for extending the tax for next year and beyond. Bogle explains that the way tax law works, most of his wealth has not yet been taxed, and it won't be taxed until his death. He also says he resents the fact that a few rich families are fighting the tax.

"For us, who owe these taxes, to think that we don't want to pay our fair share for the cost of running this nation, when our young citizens are dying in wars out there trying to protect democracy, seems to me quite outrageous."

Listen to our 12/17/09 Montana radio story on Public News Service.

November 30, 2009

"Death and taxes are on the docket for Congress in the next few weeks. The lawmakers need to bridge the one-year gap in the estate tax looming next year, and possibly decide what the tax should look like in the future. Montana Senator and Finance Committee Chair Max Baucus has called for keeping the tax, although some want to eliminate it.

Lee Farris, senior organizer with the non-profit group United for a Fair Economy, points out that the anti-estate tax campaign has been funded by a few super-wealthy families, including those who own Gallo Wines and Wal-Mart. She puts it in perspective under the current law. 'Married couples can pass on $7 million tax-free. If a person won $7 million in the lottery and then complained that it wasn't enough, I think we'd all call it ridiculous.'"

Listen to our 11/30/09 Montana radio story on Public News Service.

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Estate Tax May Expire as Congressional Impasse Clouds Extension (Bloomberg)

"Key Democrats predicted the federal estate tax will expire after Dec. 31 because an impasse among lawmakers will prevent an agreement on extending the current levy before Congress takes its holiday break.

The lawmakers said Congress would likely seek to restore it retroactively next year. [...] A temporary expiration would hand a victory to congressional Republicans who enacted legislation in 2001 to phase out what they call the “death tax.” It also would subject tens of thousands of heirs who otherwise wouldn’t owe taxes to capital gains rates if they liquidate inheritances. [...]

Unless Congress acts, the estate tax would be replaced next year by a capital-gains tax on all but the first $1.3 million in inherited assets, including homes, stock certificates, stamp collections and livestock.

Heirs who sell those assets would pay from 15 percent to 28 percent in taxes on any appreciation in value since the assets were acquired. Current law imposes capital-gains taxes only on any increase in value after the assets are bequeathed.

[Rep. Earl] Pomeroy [D-ND] said some 61,000 Americans would face taxes under the capital gains regime, versus about 6,000 estates that would face a tax under an extension of the current law. [...]

A prominent proponent of taxing large estates, Bill Gates Sr., father of Microsoft Corp. founder Bill Gates and co- chairman of the Bill and Melinda Gates Foundation, urged Congress to retain the tax.

“Society has a just claim on these fortunes,” Gates told reporters yesterday on a conference call organized by United for a Fair Economy, a Boston-based advocacy group in favor of keeping the estate tax."

Read the full article by Ryan J. Donmoyer on

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