Keeping in mind that the "family businesses" Sen. Frist refers to are estates of greater than five million dollars in value, he apparently feels that multi-millionaire heirs who are not able to afford expensive tax shelters are victims, worthy of protection from the Federal government.
But is there another reason for the "third generation's" inability to hang onto their inherited estates?
The book, "The Millionaire Next Door", looks at self-made American millionaires. It identifies, among other things, the characteristics and differences between self-made millionaires and their heirs. It also looks at why many third generation heirs do not continue the wealth building success of the preceding generations, although they have every possible advantage handed to them on a platinum platter.
The second generation, raised during the wealth building phase, frequently carries on this tradition of thrift and hard work and further builds and consolidates the family wealth.
The third generation grows up already wealthy. Unlike the first generation, they generally do not live below their means. They feel entitled to their wealthy lifestyle and more frequently squander the family fortune instead of increase it. More than any other characteristic, they feel a sense of entitlement.
They seem to believe in their inherent right to a life of wealth and privilege, no matter how little they do to earn it themselves. They believe rules and even laws are for other people. Having always lived protected lives, they assume that they always should, and that their estates should also be protected, by law, if necessary. It is the natural order of their world.
Forget about Reagan's Cadillac-driving "Welfare Queens". Bill Frist, George W. Bush, and the Republicans in control of Congress want to create a permanent class of tax exempt, "Welfare Lords and Ladies"; multi-millionaire heirs, incapable of generating the kind of wealth their forebears generated, and protected from having to try. Who expects Paris Hilton to actually earn enough to maintain, let alone increase, the Hilton wealth? Who would be surprised to find that she feels completely certain that she is entitled to always have her wealthy lifestyle, even if she never works a day in her life?
When Bill Frist frets about third generation heirs failing to hang on to the family wealth, what he really seems to be saying is this: while the first generation - despite all obstacles - could build extraordinary wealth with little or no help, the third generation - despite all advantages - is incapable of growing sufficient wealth to maintain their inheritance, and therefore, the government must guarantee it to them tax-free, or, according to Sen. Frist's statistics, 90% of them will fail. And our "poor people should pull themselves up by their bootstraps" Republican leadership, the group that hates all things eco-friendly and conservationist, treat these heirs as though they are a fragile endangered species, and want to grant them Federal protection for their Lifestyles of the Eternally Rich.
But, if Grandpa could do it with nothing, why can't the grandchildren do it with everything? And, if they can't, why should the Federal government step in?
How pathetic is it to hear a multi-millionaire heir like Sen. Frist, who has had every advantage that great wealth can buy, whine about the cost of expensive tax shelters? Look at a few of the great wealth builders of Bill Frist's generation: Bill Gates, Ted Turner, Oprah Winfrey. They all started with little or nothing. Typical first generation wealth builders, their focus is on building wealth, not finding tax shelters for what someone else made.
Personally, I think a little economic "tough love" is needed for these multi-millionaire heirs. By bailing them out with tax free inheritances, we may actually be hindering their personal growth, enabling generations of developmentally delayed entrepreneurs to hide behind their trust funds. What a waste! Aren't we depriving them of the joy of building their own empires if we help them hide, tax free, behind the gates of grandpa's estate?
This country needs "first generation" hard working entrepreneurs and innovators a lot more than it needs a permanent class of "third generation" landed aristocracy, wilting at the thought of having to work as hard as their grandparents did.
Maybe Oprah should have an intervention with Bill.
