A Commentary On Wealth And Our Commonwealth
One of the best known citizens of Tucson, Arizona, was the late Ettorino “Ted” De Grazia (1909-1982), a world-renowned impressionist artist and sometime musician.
He was born in Morenci, an Arizona mining town, of Italian immigrant parents. He worked his way through college as a musician and later paid his way by painting murals in bars in the United States and Mexico. He studied art in Mexico in the late 1930s and early 1940s, returning to Tucson in 1947. Legend has it that his first “home” in Tucson was in a culvert under one of the citys streets–a testimony to his humble beginnings.
His specialty as a painter was of angels and faceless Indian and Mexican children with large eyes. In time his work became very popular, and copies of the thousands of works he produced were sold by the millions around the world. As his wealth from these sales accumulated, he was soon made aware of the federal estate tax. He became so enraged over the likelihood that the paintings still in his possession would be taxed at his death, he burned them in protest of the tax. Some have estimated that the paintings he burned were worth millions.
De Grazia was generous in lending the use of his paintings as fund-raisers for UNICEF, the American Cancer Society and other charities, but he was adamant in his objection to paying taxes. It is worth noting that his cost basis for the paintings he burned was near zero, and since they had never been sold, they had never been subjected to any kind of tax, despite their great value.
I was reminded of this incident, which received a great deal of attention at the time, during a recent discussion. About two weeks ago, I was invited to participate in a conference call hosted by Bill Gates Sr. and Chuck Collins. Gates and Collins are the co-authors of a book entitled “Wealth and Our Commonwealth.” The main theme of the book centers on why America should tax accumulated wealth.