Estate Tax Statement from Richard Rockefeller, M.D.

The following statement was delivered on Responsible Wealth's 12/11/12 Estate Tax Teleconference (printed here from transcription):

Thank you very much and it’s delightful to go after the three of you and hear how much concurrence there is in points of view and maybe I have a couple of more things to add. 

Just quickly by the way, I was Chair of the Rockefeller Family Fund.  I currently chair the Rockefeller Brothers Fund but the rest of this you have correct.  I’m also a great grandson to John D. Rockefeller and I’m a father and a grandfather myself, so the tradition continues. 

To me, the reasons for maintaining the federal estate tax are simple but they’re really compelling and some days I just don’t get it why this isn’t clear to everybody including people with wealth.  The first reason that moves me is a personal one and has to do with my own children and my grandchildren.  I care about their inheritance of course, but I don’t look upon that inheritance as a purely material thing.  The quality of the world they grow up in will contribute as much or more to their well-being as any amount of money and possessions that I could bequeath.  That is to say if the world I leave them is one of gated communities and growing inequality and misery among the have nots and downward mobility for the middle class and the degraded environment and a rotting social and physical infrastructure, then their inheritance will be a shabby one no matter how much money they get. I don’t see any way around that argument unless people like living in gated communities. 

So anyway, a strong federal estate tax will reduce inequality and prevent the rise of our hereditary aristocracy, help maintain the social and physical infrastructure that supports us all, and by doing so will provide as much to my descendants as I could provide them on my own just by passing money to them. 

The other reason I support the federal estate tax is that as Abigail said, it encourages individuals and families of wealth such as mine to direct significant portions of their estates to philanthropy and by a little more personal background, I do currently Chair the Board of Directors of Rockefeller Brothers Fund.  I’m former chair of the advisory board, not the board of directors, to Doctors without Borders.  I’ve served on a number of other boards.  Have founded and run three non-profits and my heritage and these roles keep me keenly aware of the importance of private philanthropy to addressing a host of societal humanitarian and environmental needs which neither the business nor the government sectors can meet nearly as effectively. 

There is moreover bipartisan agreement in the US that the non-profit sector contributes importantly to the health of our society and to our democracy.  Foundations and non-governmental organizations can generally think more creatively and take greater risks than can those in government.  Incentives in the non-profit world encourage NGOs to think and act with broader perspectives and longer time horizons when businesses generally can’t constrained as they are by the requirements of short term earnings report. 

Donating money philanthropically results in 100 cents on every $1.00 going to the cause that a donor chooses.  A strong federal estate tax would only allow $0.50 on each $1.00 or so to go to our heirs, and the difference between those two provides a great incentive to philanthropy. 

So again in closing, I just want to emphasize that as a great grandson of John D. Rockefeller, I’m perfectly happy that a portion of the wealth he made goes with each succeeding generation towards paying the estate tax, and this is echoing what others have said, that our family’s fortune would never have been made in the first place without the foundation of public laws, public education, and material infrastructure that underpinned the American industry in my great grandfather’s time and continue to do so today.  So, far from resenting a system which asks us to help pay for this infrastructure from one generation to the next, I believe that a strong estate tax makes sense for me and for the causes I support and for my children and my grandchildren and my country.  Thanks. 

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

"My name is Richard Rockefeller. I am a family physician living in Falmouth, Maine.

I happen also to be the son of David Rockefeller, and great-grandson to John D. Among other philanthropic activities I currently chair the Board Directors of the Rockefeller Brothers Fund as well as the Advisory Board to Doctors Without Borders-USA. My heritage and these roles keep me keenly aware of the importance of private philanthropy to addressing a host of societal, humanitarian and environmental needs, which neither the business nor the government sectors can meet nearly as effectively.

I am here today to attest that the Federal Estate Tax encourages individuals and families of wealth such as mine to direct significant portions of their estates to philanthropy.

The estate tax is of enormous benefit to the philanthropic community, and its loss would be commensurately harmful. A 2004 study by the Congressional Budget Office found that complete repeal of the estate tax would have reduced total annual philanthropic giving by between $13 and $25 billion in the year 2000, an amount roughly equal to all foundation giving in that year.

Let me illustrate why the estate tax provides an incentive for wealthy people to make philanthropic gifts. Let’s say my wife and I knew we were going to die soon, which we don’t fortunately, this is just a “for instance”. And imagine that we had an estate of $27 million. Our combined exemption would be $7 million, leaving a taxable amount of $20 million.

Every dollar of that $20 million that we direct to tax-exempt organizations would go 100% to those organizations. Meanwhile, every dollar we choose to direct instead toward our children would be taxed at 45%, so there’s a strong incentive for us to give more to charity and less to our children once we get beyond the exemption.

In any case, the $7 million exemption is already a hefty amount to give to our children, tax-free, and they’ve already received a lot of gifts and other advantages in their lifetime.

Let me close by saying that as the great-grandson of John D. Rockefeller, I am perfectly happy that a portion of the wealth he made goes with each succeeding generation toward paying the estate tax. The Rockefeller fortune could never have been created without the foundation of public laws, public education and infrastructure which undergirded American industry in my great-grandfather’s time and continues to do so today. Therefore, far from resenting our tax system, which allows this infrastructure to remain strong, I believe that a strong estate tax makes perfect sense."