Originally aired 5 August. Linked from Maine Public Broadcasting Network.
Listen to the full segment here.
By Irwin Gatz
The White House has been pressured this week into affirming it does not plan to raise taxes on anyone earning less than $250,000 a year. But the President offers no similar guarantee to those with higher incomes, and Chuck Collins says that’s as it should be.
Collins is heir to the Oscar Mayer hotdog fortune. He’s also co-founder of “Wealth for the Common Good”, a network of business leaders and other wealthy individuals that, last week, urged President Obama and Congress to immediately reverse the Bush-era tax cuts on the wealthy.
Published on 13 August 2009. Linked from The Wealth Report in the Wall Street Journal.
By Robert Frank
Diogenes, the famed beggar-philosopher of ancient Greece, supposedly roamed the streets of Athens, lamp in hand, trying to find an honest man.
Chuck Collins, the politically liberal heir to the Oscar Mayer fortune, is engaged in a more curent Diogenian quest. His goal: to find 1,000 wealthy people willing to petition for higher taxes on the rich.
The group seeks an immediate increase of the top tax rate to 39.6% from 35%, which could raise an estimated $43 billion in tax revenue a year. “We believe high-income households want President Obama to move our country toward stability, fiscal responsibility and sensible taxation and investment,” the group states. “We should not wait.”
Mr. Collins’ task won’t be easy. First off, the pool of rich people with the ability to sign the petition has dropped considerably. Finding 1,000 people with incomes of $235,000 is tougher with 9.4% unemployment.
Second, the wealthy–like many Americans–don’t really like paying taxes. Just ask the 52,000 offshoring UBS clients (or the 8,000 to 10,000 whose names will be turned over).
Still, Mr. Collins has succeeded before in finding people anxious to give the government more money. Working with George Soros and William H. Gates Sr., he got 4,702 signatures for a petition opposing a repeal of the estate tax.
Even if Mr. Collins doesn’t meet his new target, he will likely see his broader goal of having the wealthy pay a larger share of the country’s tax burden realized. Congress, it seems, has already ruled in his favor.
The scion of the Oscar Mayer family supports a House panel’s healthcare plan that would boost taxes for families earning more than $350,000 a year. He also advocates ending the Bush tax cuts for the rich right away, rather than when they expire at the start of 2011, and closing foreign tax havens to Americans.
Although the financial burden would be sizable, Mr. Collins is busy urging other wealthy Americans to sign a tax-me petition.
“The good news is there are still people out there willing to pay for the common good,” says Collins, whose nonprofit Wealth for the Common Good is collecting the names.
As of July 21, some 210 wealthy people had signed. Collins hopes to get more than 1,000 signatures before delivering it to President Obama and House leaders.
The idealist wealthy are “not as small a minority as one might think,” says Eric Schoenberg, an investor and Columbia University Business School professor, who also signed the petition.
It is “reasonable and fair” for “the people who have done best out of the economic system in the last 20 years” to pay in extra taxes the bulk of the cost of healthcare reform, says Mr. Schoenberg. “Healthcare ought to be a basic right of citizenship.”
His research suggests the really rich are more willing than the modestly rich to share their wealth for the common good.
There are other indications of idealism among business people and the well-to-do:
•Responsible Wealth, a nonprofit group that includes several wealthy members, has been advocating for years that the estate tax be retained.
•A group of business owners and leaders called Business for Shared Prosperity welcomed the July 24 rise in the federal minimum wage from $6.55 to $7.25 an hour, although it costs their firms more money.
“It is an unsustainable and dangerous downward spiral to push American workers into
poverty and expect taxpayers to pick up the bill for the consequences,” states Margot Dorfman, CEO of the U.S. Women’s Chamber of Commerce.
But wait! Don’t these taxes on the rich burden the very people who start the most firms and create the most jobs? Statistics suggest the burden is not overwhelming. Households with incomes over $250,000 have saved more than $700 billion from the Bush tax cuts of 2001 and 2003. The proposed graduated surtax under the House Ways and Means Committee’s healthcare plan would take back $544 billion over the next 10 years, providing about half the cost of the entire plan, calculates the Joint Economic Committee of Congress.
What that means is that even after digging deeper to help pay for expensive healthcare reform, the wealthy would still be paying less in taxes than during the Reagan administration – and far less than in President Eisenhower’s time.
In 1955, the top 400 US taxpayers paid 51 percent of their average income of $12.3 million (adjusted to 2006 dollars), according to Sam Pizzigati, a fellow at the Institute for Policy Studies in Washington. In 2006, the most recent data available, the top 400 paid 17.2 percent of their average income of $263 million in federal taxes.
That 17.2 percent rate is also “much lower” than tax rates for the rich in Britain, France, Germany, or Japan, he adds.
Nor, some economists note, did the US economy grow more slowly when taxes on the rich were far higher in the 1950s and 1960s – or grow more swiftly after the Bush tax cuts.
Upper-income earners who actually want to pay higher taxes have launched a public campaign calling for an immediate rollback of the tax cuts enacted under President George W. Bush.
The group, which calls itself Wealth for the Common Good, believes that people who have taxable income of more than $235,000 a year should support restoring their top federal income tax rate to 39.6 percent from 35 percent - and now, not in 2011, when the higher rate is scheduled to return anyway.
From their Web site:
“Our country is facing the worst economic challenge since the Great Depression and an urgent need to make a long overdue investment in bringing jobs and stability back to our communities. This investment should be paid for, in part, by repealing the Bush-era tax cuts our country cannot afford.
“Those of us with taxable incomes over $235,000 benefited from the upside of the economy during the last decade and profited for eight years from a 2001 tax cut. Now is the time to give back.
“We would see a minimal tax increase - from 35 (percent) to 39.6 (percent), a rate still far lower than the one under President (Ronald) Reagan - but the increased revenue would raise an estimated $43 billion per year.”
The group’s founders include Chuck Collins, who inherited some of the Oscar Mayer meat fortune and who has long been involved in agitating on income-inequality issues.
He may be best known for co-writing the 2003 book “Wealth and Our Commonwealth: Why America Should Tax Accumulated Fortunes” with Bill Gates Sr. The book made the case for retaining the federal estate tax.
This month, Wealth for the Common Good sent its request, including a petition with more than 1,000 signatures, to President Obama and to House and Senate leaders.
Published 5 August 2009. Linked from the Cleveland Plain Dealer. Also published in The Progressive, The Vindicator, Press of Atlantic City, Colorado Daily, National Post (Canada) and Financial Post (Canada).
By Arul Menezes
In recent weeks, there has been a lot of discussion about raising taxes on the wealthy. As a higher-income person who would pay such taxes, I have no objection.
I grew up in India and came to the United States in 1988. I attended graduate school at Stanford and have since had a successful career in the technology industry. There is no other country in the world where this could have happened.
I could choose to tell my story this way: “I arrived with $250 in my pocket, and got where I am based entirely on my hard work.” This is true, but it’s not the whole truth.
A more honest reckoning would take into consideration that I received an excellent engineering education paid for by the taxpayers of India, and that my graduate education at Stanford was funded by National Science Foundation grants and other U.S. government investments in scientific research.
My professional success — and that of the technology industry as a whole — was enabled, in part, by the advent of the Internet, itself a creation of public investments in research and development and by the available pool of talent, trained and nurtured by our public education system.
A more accurate telling of my story would consider that every day I benefit from schools, hospitals, roads, bridges, parks and civic amenities that were built and paid for by previous generations. They were much less well off than we are today. Yet they had the collective will to invest in their future and the future of their children.
I am worried, though, that things are changing in America. The kinds of public investments that made my success possible are vanishing.
Two decades ago, the United States was unique in its meritocratic system and the depth of infrastructure that enabled individuals to succeed.
But during the last decade, taxpayers in my income group received significant tax breaks.
The Bush-era tax cuts gave $700 billion in breaks over eight years to those of us with annual incomes more than $200,000. The United States borrowed money to make these tax cuts possible, even as our schools, infrastructure, research institutions and social services were in need of new investments.
This is extremely shortsighted. Our investment as citizens in our collective “commons” lays the foundation for our individual wealth and success. That’s why I’ve joined hundreds of other high-income taxpayers in calling for a reversal of these tax cuts. This would generate roughly $43 billion in annual federal revenue, which could be used to make investments in public education, health care and revamping our nation’s energy system.
Taxes are the price we pay to live in a civilized and healthy society. Those of us who have disproportionately benefited from public investments have a responsibility to pay back our society so that others can have similar opportunities.
It is only just and fair that our generation make comparable investments in our future to ensure that America continues to offer our children and grandchildren the same kind of opportunities it offered me.
Arul Menezes is a member of Wealth for the Common Good, a network of business leaders and high-net-worth individuals that advocate for shared prosperity. He wrote this for Progressive Media Project, a source of liberal commentary on domestic and international issues; it is affiliated with the Progressive magazine. (McClatchy-Tribune)
John Burbank, Executive Director of the Economic Opportunity Institute in Seattle and member of Wealth for the Common Good talks about the campaign with Pete Dominick on the POTUS satellite radio channel.
Aired 29 July 2009. Linked from FOXBusiness.com. Watch the clip.
Wealth for the Common Good member Eric Schoenberg, professor at Columbia Business School, talks with Neil Cavuto about our campaign.
Aired on 11 August. Linked from WCHS 6 in Portland, Maine.
