Published on 21 September 2010 in the Huffington Post.
By Chuck Collins
Here are five good reasons for Congress to let them go.
1. Borrowing to Give the Rich Tax Breaks is a Really Bad Idea. We’ve already borrowed $700 billion since 2001 to pay for these tax cuts. Maintaining them for another decade would cost an estimated $700 billion, plus interest on the national debt estimated at $126 billion. Does it really make sense to send interest payments to China and millionaire bond-holders in the U.S. -so that we can cut taxes for U.S. millionaires and billionaires?
2. There are 700 Billion Better Ways to Use the Money. Consider the superior ways to spend $700 billion. We could use a portion to reduce budget deficits. We could make long overdue investments in infrastructure such as bridges, roadways, railroads, water treatment facilities, retrofitting buildings -things that make our economy strong and competitive. We could direct funds to make the transition to the new economy that is less dependent on foreign oil. In the short-term, all these investments would create millions of jobs. In the long term, it would put the economy on better footing for the future. There are a billion better ways to use the money.
3. Restores Balance to Tax Code. Over the last half century, Congress has steadily reduced tax obligations for the very rich and global corporations. Between 1960 and 2004, the top 0.1 percent of U.S. taxpayers -the wealthiest one in one thousand -have seen the share of their income paid in total federal taxes drop from 60 to 33.6 percent. Restoring the tax rates to pre-2001 levels would be a very slight increase, yet begin the process of rebalancing the tax code.
4. It Won’t Hurt the Economy. You’ve heard the blather about how taxing the rich is going to hurt the economy. But cutting the taxes for the wealthy are an ineffective way to help the economy. A recent analysis by the Congressional Budget Service ranked 11 strategies to spur the economy and create jobs. Cutting taxes for the rich was the worst ranked strategy. Here’ the reality: Taxing the rich is different than taxing the middle class. According to Moody’s, the rich save more of their tax cuts while working people and middle class spend it in the economy. Over the last decade, the top wealth holders have shifted trillions of dollars into speculative investments that have hurt the economy.
5. Reduces the Dangerous Concentration of Wealth and Power. We’re living in a period of unprecedented economic inequality. A recent series by Tim Noah in the online journal Slate examined the “Growing Divergence” of wealth and income. Taxes is one of the ways we reduce these inequalities.
A final reason is that the U.S. public supports letting these tax cuts for the rich expire. A recent Gallup Poll reveals that 59 percent of the population support letting the tax cuts for the rich expire -while 37 percent support extending them. Polls rarely reveal support for any form of taxation -which indicates that a majority of Americans -including those who will pay the hire taxes – recognize the imprudence of extending them. Alan Greenspan, who supported the tax cuts in 2001, has now reversed his position and believes the time has come to raise taxes.
Take action: Organizations such as Wealth for the Common Good and Americans for Responsible Taxes are working to build public support for letting the tax cuts expire.
| Congress returned to Washington this week. Shortly they will discuss the future of the 2001 and 2003 Bush tax cuts for the wealthy.
Polls show 57% of Americans support allowing these Bush tax cuts for the wealthy to expire at the end of 2010. They believe there is a better way to spend $700 billion over the next decade. President Obama believes the responsible thing to do is extend the tax cuts for the middle class but let the tax cuts for the wealthy expire. The Republicans want to extend the tax cuts for the rich without a plan to pay for them. So the future is in our hands. This week, your actions really can make a difference. Thanks for your support, |
| Take Action:
Here are a few ways you can help push Congress this week. 1. Sign the petition to urge Congress to let the Bush tax cuts for the wealthy to expire. If you’ve already signed up, please urge three others to sign. 2. Call in to Congress — right now! Call the U.S. Senate switchboard at 202-224-3121 or the U.S. House switchboard at 202-225-3121. Or you can call on Thursday as part of our larger coalition effort, through Americans for Responsible Taxes (ART). Tell your members: Let the Bush tax cuts for the wealthy expire. Tell them how you’d rather spend $700 Billion. 3. Send a letter to the editor. Use our nifty letter writing device to pick a newspaper and send a letter. A draft letter is provided.
4. Write an op-ed. Work with our team to draft/place. Contact Bob Keener at bob@wealthforcommongood.org. SMALL BUSINESS VOICES NEEDED Are you a small business owner? Small businesses are being used to justify retaining the Bush tax cuts, even though less than 3 percent of small businesses have incomes over $250,000 and many of these are boutique law firms and investment managers. Are you a small business owner? If you earn less than $250,000, tell your member of Congress — $700 Billion could pay for real help for real small business. If you earn more than $250,000, tell them a tax increase will not hurt your business. Please Take Action This Week! |
by Naomi Sobel
Originally posted by Yes Magazine, September 9, 2010
Why one wealthy American wants the Bush tax cuts to expire and the estate tax to be reinstated.
In the coming months, Congress will be decide the future of the federal estate tax and whether or not to continue substantial tax cuts for the very wealthy.
As someone who would personally benefit from these tax cuts, I believe Congress should act responsibly and reverse the generous tax breaks they gave to wealthy families in 2001 and 2003, letting income tax cuts for those with annual incomes over $235,000 expire at the end of this year.
They should also reinstate the federal estate tax, our nation’s only levy on inherited wealth. I believe the estate tax, which temporarily expired this year, is a fair and responsible way for those of us who have grown wealth in the U.S. to pay back the society that created the fertile ground for wealth creation.
My conservative friends ask: Why do you feel you have an obligation to society? My progressive friends ask: Why don’t you give more money to charity instead of the government? My answers to both questions are rooted in the history of public investments that directly and indirectly benefited my family.
Paying Back Public Investments
In 1900, my great-great-grandfather co-founded a mining and construction business in Utah. Shortly after the business was created, it received a number of federal grants for large infrastructure projects, including the Hoover Dam, the largest construction project ever tackled at the time.
My family’s business was built upon a common wealth of public resources, scientific knowledge, and shared institutions. Those of us who have benefited from these investments have an obligation to reinvest in the common good.
During the 1930s, our family enterprise expanded thanks to Depression-era public works projects. By mid-century, the company, under my grandfather’s leadership, had become one of the most profitable mining and land development firms in the country.
Our family business was strengthened by a public infrastructure of roads, ports, and bridges that allowed us to easily transport materials. We also benefited from our nation’s unparalleled system of property laws and legal remedies, designed to protect private property and investment.
These public inputs have benefited the majority of enterprises. Where would today’s technology companies be without public investments in scientific knowledge, computer research, and the Internet? Where would many businesses be without our education system, transportation system, and the millions of direct and indirect subsidies that create the fertile ground for a healthy and vibrant economy?
My family’s business was successful thanks to hard work. But it was also built upon a common wealth of public resources, scientific knowledge, and shared institutions. I believe that those of us who have disproportionately benefited from these investments have a corresponding obligation to reinvest in the common good.
Why Taxes, Not Charity?
I’m a strong believer in charitable giving, which when done well can advance innovative approaches to social problems. Maintaining a progressive tax system will not diminish charitable giving—in some cases, it will encourage it. Many of the wealthy households touched by the proposed higher taxes already give substantially to charity, and a return to a fairer level of taxation on those households is unlikely to substantially reduce their level of giving.
What is Real Wealth?
We’ve been measuring happiness in all the wrong ways.
More importantly, taxes and charity pay for different things. The public investments that have built our infrastructure and ensured greater opportunity were made mostly with tax dollars, not charitable contributions.
Our tax dollars pay for big public investments such as water treatment systems, rail links, food stamps, environmental protection, national defense, bridges and roads, registries of deeds, and more. Philanthropic dollars contribute to a different infrastructure, often in the form of hospitals, cultural institutions, and colleges and universities.
We need both of these types of investments. But there are many things that philanthropy is not equipped to do—and yet are critical to the functioning of our society. Wealthy individuals should not aggressively avoid paying their fair share towards the commonwealth in the form of taxes.
This is one of the main reasons why I believe we should rebalance the tax code and allow the Bush tax cuts expire at the end of this year. This would represent a small increase on my taxes, but could raise an estimated $45 billion a year for the nation as a whole.
Toward a Fair Estate Tax
We should also reinstate the federal estate tax, which was allowed to expire at the beginning of 2010. I support the Responsible Estate Tax Act, which would reinstate taxes on the estates that wealthy individuals leave behind. It would also exempt farms and small businesses, institute graduated rates on larger estates, close loopholes, and encourage conservation easements. The Act also imposes a “billionaire surcharge” rate of 65 percent on estates over $500 million.
Reinstituting a progressive estate tax would be reasonable and fair. The Responsible Estate Tax Act would exempt estates below $3.5 million, so it would be paid by fewer than one in two hundred estates. It would generate at least $264 billion over the next ten years.
Raising taxes on middle income households will have a negative impact on the economy, but maintaining the estate tax will not. As former Treasury Secretary Robert Rubin and venture capitalist Julian Robertson recently wrote in The Wall Street Journal, “An estate tax can provide revenue—with little, if any, adverse supply-side economic impact—to fund deficit reduction, additional public investment or added assistance to those affected by the economic crisis.”
More importantly, maintaining a fair estate tax is the right thing to do. It disperses concentrations of wealth and power that undercut our democratic society. It encourages charitable giving and also raises substantial revenue for public investments that will enable future generations to share prosperity. For my family, it is one of the important ways we pay back the society and commons that make private wealth possible.