Comment: Dear President's Advisory Panel on Federal Tax Reform: As a self-employed business owner who spends half a week each year suffering over tax forms, I am convinced tax simplification is long overdue, so I wish you great inspiration and the best of political winds in completing your work. My suggestion is a trade-off: Eliminate the "death tax", yes -- but only for individuals who willingly decide to do without Social Security and Medicare benefits. While we shouldn't punish the elderly (or their offspring) for accumulating assets, nor do we want the wealthier among America's growing and unprecedentedly well-off hordes of retirees taking a free ride on social welfare programs that were never intended to be making 30-year payouts to multi-millionaires. In the days of the New Deal, when Social Security and Medicare were launched, many of our comfortably-off citizens would have felt a sense of "noblesse oblige", and most who could afford to would have refused "public assistance" -- because they didn't need it, while the poor did. (Yes, there was a stigma to taking "welfare" -- and, like so many stigmas that have gone by the boards in recent decades, we'd all be better off if we could revive that one.) Because so many who don't need benefits take them anyway, the estate tax should continue to be imposed (with the same or even a higher level of exemptions) against anyone who collects Social Security for more than a one-year trial period, or who collects Medicare benefits without paying premiums for more than three years. During those "grace" periods, recipients of benefits would be sent monthly opt-out forms with their Social Security checks, and quarterly opt-out forms with their Medicare statements. These forms, opting out of benefits in return for explicit protection from potential exposure to the estate tax, could be executed before two witnesses at their nearest SSA office; those needing transport could call an 800 number to schedule a free SSA pick-up to execute the forms, and there could be a requirement that those opting out show the means to pay a certain minimum level of medical costs. Any "death taxes" eventually collected -- mind you, only from those who insisted on getting their payroll taxes back in this life -- would be paid into the Social Security and Medicare trust funds. As any compassionate person would wish it, the elderly who have only a small nest egg would continue to opt to receive the Social Security and Medicare benefits that are provided for them. They would not fear the estate tax, because they would have been given time and information to understand that their net worth would not exceed the exemption levels. The public interest, meanwhile, would be vastly better-served, and Social Security and Medicare a good deal more solvent, if more wealthy retirees volunteered to lighten the public burden. People live longer and longer. While the well-off may sneer at how small Social Security payments are, it rarely seems to cross their minds to refuse the checks. Perhaps both political parties have reassured them too often that that they are entitled to get out what they pay in. Well, yes, true enough -- but why not offer them a choice: collect benefits, as is your right, or elect to keep your estate intact, which is much more debatable as a "right" and certainly shouldn't be a privilege open to someone who spends decades on the dole. This plan would influence most retirees to think of their family's interest as being in line with sparing the public coffers; too often, people these days seem to think their family's best interests are *opposed* to what will spare the public coffers. For America's finances to be healthy for the long term, we have to stop making the elder generation's choices seem to carry no price ticket, and we have to stop telling ourselves that what we individually choose is not the rightful concern of to our fellow citizens. Best wishes, JOHN D. CARROLL |