Billionaires oppose Bush plan to abolish death tax

A tax concession to the very richest Americans, worth at least $326 billion over the next decade and a cornerstone of the Bush manifesto, is now being opposed by the people it is destined to help.

A petition signed by 120 US billionaires, including names such as Gates, Soros and Rockefeller, will appear in this weekend's New York Times, opposing the abolition of death duties as an attack on America's meritocratic society.

One of the country's richest, Mr Warren Buffet, the Omaha investor who ranks fourth in the Forbes magazine list of the wealthiest, has refused to sign the petition because he feels it did not go far enough in defending the "critical role" of estate tax in promoting efficiency in the economy.

Repeal, he told the New York Times, would be a "terrible mistake", like "choosing the 2020 Olympic team by picking the eldest sons of the gold-medal winners in the 2000 Olympic games."

The petition has been organised by the father of Microsoft's Mr Bill Gates, Mr William H. Gates Snr, who said he was furious at the idea and were he not so busy would have created a group called "Millionaires for the Estate Tax". A wealthy lawyer in his own right, Mr Gates Snr is also president of the Bill and Melinda Gates Foundation, which has an endowment of $20 billion.

The petition argues that repealing the tax "would enrich the heirs of America's millionaires and billionaires while hurting families who struggle to make ends meet." In addition to the loss of government revenue the abolition would hurt charities which depend heavily on the tax advantages of legacies.

Among the others to sign are the financier Mr George Soros; the philanthropist and former chairman of Rockefeller and Co Mr David Rockefeller jnr; the chairman of the Rockefeller Foundation Mr Stephen C. Rockefeller; the philanthropist Ms Agnes Gund and the founder of Ben and Jerry's icecream empire, Mr Ben Cohen.

The petition acknowledges that the estate tax causes some problems to farmers and small businesses and says, "Let's fix the tax, not repeal it."

US estate tax is levied on wealth at death over $675,000, an exemption that in current law rises to $1 million in 2006. (Farms and family businesses already have a $1 million threshold). Tax is then payable at rates rising from 37 per cent to 55 per cent for estates worth than $3 million.

Annually, fewer than 2 per cent of those who die are liable for any duty, with nearly half of all duty paid by one-twelfth of that number, the 4,000 or so who leave more than $5 million.