Ray Madoff, my colleague at Boston College during my spring visit there, has written a wonderful op-ed in the New York Times about Leona Helmsley's bequest for the dogs. Ray Madoff's op-ed, Dog Eat Your Taxes? (July 9, 2008).
For background information, readers should know that Helmsley left $12 million to her trusty canine companion, Trouble, at her death. Here's a 2007 description of Leona Helmsley's will. At that time, people talked a lot about the wacky idea of providing $12 million to support a single dog, when people all over the world and right here in this country struggle to support families and could use just another $10,000 a year apiece to make a real difference. Here are excerpts from two comments on the 2007 NYTimes blog about the will that capture some of the concerns we all likely feel about such misguided "generosity."
I do admire her for giving so much to charity before she died but I wonder if people with this type of money know what it means? My family of 4 lives on about 25,000 a year gross income and she gives 12 million to a dog! How ridiculous! I really don’t understand the world. ... my husband and I will give our last $20 to a man on the street needing to feed his starving children and we will come home and eat a supper of peanut butter and jelly sandwiches, but someone with all of that money leaves 12 million dollars to a dog. ... don’t people with a blatant overabundance of money even once think about the homeless, the poor, the lower middleclass, etc.? (by "Julie")
Leaving the money to her personal Helmsley ‘Charitable Trust’ is just the way to preserve her money long after she’s rotted away and forgotten. It should be taken and given to the Hotel and Restaurant workers she victimized all those years when she earned her true reputation for being an unmitigated B _ _ _ _ ! ... There should be a legal limit to how much some dead woman can control wealth after she can no longer enjoy holding it over people and control them. (by Ed Burke)
But those comments were just when the public learned of the $12million bequest. Now we know that she left $5-$8 billion, her entire estate, to a trust to care for dogs. See New York Times International Herald Tribune, Leona Helmsley's Will Goes to the Dogs (July 2, 2008).
As Ray Madoff notes, the creation of the trust ensured that the Helmsley estate avoided billions in estate taxes. So the main losers in the trust deal are the vast majority of ordinary taxpayers who will have to pay more (since she paid so much less) in a country where institutional and infrastructure needs are glaringly underfinanced. Who are the main winners? As Madoff says, it really isn't the canine population. It's the banks and bankers who tend those assets in perpetuity for huge fees. They, my friends, will be living on the easy street paved by Leona Helmsley. (No wonder they fought Congressional efforts to force such "charitable" endeavors to count only money spent on charity as their required disbursements.)
By the way, anybody remember what line Helmsley is famous for --Only the little people pay taxes.
Ray Madoff is right. Congress needs to eliminate this loophole for the wealthy. We probably ought to eliminate all charitable deductions beyond some minimal amount, like $3000 (that's the amount of capital losses that ordinary taxpayers get to write off against their ordinary income). At least we ought to eliminate this boondoggle for the wealthy to spit in the faces of all the "little people" upon their death.
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