[ExI] The Dogs of Immortality

[Damien Broderick]

This line of argument might rise up to bite 
cryonics and perhaps other attempts at indefinite life extension:

===============

<http://www.nytimes.com/2008/07/09/opinion/09madoff.html?th&emc=th>


Dog Eat Your Taxes?

By RAY D. MADOFF
Published: July 9, 2008

THE latest news from the Palace, that Leona 
Helmsley left instructions that her charitable 
bequest of as much as $8 billion be used for the 
care and welfare of dogs, rubs our noses in the 
tax deduction for charitable gifts and its common 
vehicle, the perpetual private foundation. 
Together these provide a mechanism by which 
American taxpayers subsidize the whims of the 
rich and fulfill their fantasies of immortality.

The charitable deduction enables people to donate 
as much of their assets as they like for 
charitable purposes without paying a tax. While 
some choose to contribute to broad public goals, 
the law does not require it. In recent years, 
charitable status has been recognized for 
organizations with purposes as idiosyncratic as 
promoting excellence in quilting and educating 
the public about Huey military aircraft. Indeed, 
Mrs. Helmsley might have limited her beneficence 
to the Maltese breed of dogs she favored, and 
that, too, would have been allowed as a “charitable” purpose.

If this were only a matter of Leona Helmsley 
wasting her own money, no one would need to care. But she is wasting ours too.

The charitable deduction constitutes a subsidy 
from the federal government. The government, in 
effect, makes itself a partner in every 
charitable bequest. In Mrs. Helmsley’s case, 
given that her fortune warranted an estate tax 
rate of 45 percent, her $8 billion donation for 
dogs is really a gift of $4.4 billion from her 
and $3.6 billion from you and me.

To put it in perspective, our contribution to 
Mrs. Helmsley’s cause equals approximately half 
of what we spend on Head Start, a program that benefits 900,000 children.

What will we get for our $3.6 billion? An eternal 
monument to Leona Helmsley’s generosity toward 
dogs. Even the dogs will not benefit as much as 
one might think, because Mrs. Helmsley elected to 
disburse her bequests through the Leona M. and 
Harry B. Helmsley Charitable Trust.

Most such foundations perform no charitable work 
but only give money to organizations that do. The 
law requires foundations to spend a minimum of 
just 5 percent of their assets a year, thus 
helping ensure their perpetual existence, and 
their donors’ immortality. In meeting this 
requirement, foundations are allowed to count 
fees paid to their trustees and other administrative expenses.

In 2003, legislation was introduced in Congress 
that would have required private foundations to 
devote the full 5 percent to charitable 
expenditures. But the foundations complained that 
this would threaten their perpetual existence, and the bill did not pass.

Some people who establish perpetual charitable 
trusts may assume that their philanthropic 
dollars will go further if the trust distributes 
only its investment income and preserves its 
principal. Anyone familiar with the story of the 
goose that laid the golden eggs knows the 
importance of not spending principal. However, 
because a dollar spent today is worth more than a 
dollar spent several years from now, in many 
cases, the sum of payments made over time ­ even 
in perpetuity ­ never equals the value of the 
original principal. The true beneficiaries of 
perpetuity are the banks and trust companies that 
receive annual fees for managing foundations’ assets.

There are other reasons the law should not 
encourage people to tie up their resources ­ and 
ours ­ for all time. The perpetual foundation is 
based on the assumption that people can make 
intelligent decisions about the use of resources 
far into the future. But a look back shows how 
flawed this thinking is. Would it really make 
sense for current policy to be dictated by the 
vision of someone living in 1930? 1630? 1230?

By setting aside assets for the uncertain needs 
of the future, we deprive ourselves of resources 
for addressing the obvious and compelling needs of today.

We should not give a blank check to support the 
whims of the wealthy. There should be a limit ­ a 
dollar amount or a percentage of the estate ­ on 
the estate tax charitable deduction. People could 
still give to charity as they like, but after a 
point they would be giving after-tax dollars. The 
deduction should be lower for bequests to private 
foundations than for money given directly to good causes.

We should also stop subsidizing immortality. 
Private foundations should be required to spend 
more of their assets on charitable work, even if 
it threatens their perpetual existence.

Until Congress makes these changes to the tax 
code, it is not just Leona Helmsley’s fortune 
that is going to the dogs; it is our tax dollars as well.

Ray D. Madoff, a professor at Boston College Law 
School, is writing a book on immortality and the law.