by Rob Lever
AFP, Nov. 25, 2010
WASHINGTON (AFP) – With the US Congress hurtling toward a deadline on expiring tax cuts, a growing number of wealthy people are calling for higher taxes on the rich to help restore America’s fiscal health.
One effort gathered over 45 millionaires who signed an open petition calling for the end of the tax cuts adopted since 2001 on those with annual incomes exceeding one million dollars.
Tax breaks for the wealthy should expire “for the fiscal health of our nation and the well-being of our fellow citizens,” the letter said. It was signed by Ben & Jerry’s ice cream founder Ben Cohen, hedge fund manager Michael Steinhardt and others.
Guy Saperstein, a retired California trial lawyer who organized the effort, said he was “frustrated” that President Barack Obama appeared to be wavering on his pledge to end tax cuts for the wealthy.
“I think the country’s in trouble,” Saperstein told AFP. “In hard times, the top strata who have done fabulously well need to sacrifice a bit, and it’s not much of a sacrifice… We have among the lowest tax rates of any industrialized democracy.”
Saperstein said an estimated 1,500 people have signed the letter although some of them did not want to be publicly identified on the group’s website.
Philippe Villers, a French-born US businessman who founded Computervision in the 1960s and now heads Grain Pro, says he signed the letter even though it would mean higher taxes for himself.
“I don’t think (extending the tax cuts for the wealthy) are fair or in the interest of building a strong economy,” he said.
Villers argued that tax cuts enacted under former president George W. Bush gave a “disproportionate benefit to people with means” and contributed to the current economic woes.
Another 410 high-income Americans have signed a similar petition by Wealth for the Common Good, a network of business and civic leaders, calling for tax cuts to expire for families with incomes above 250,000 dollars.
“I’ve had a good run over the last few years. There’s no question that others now deserve to share in that prosperity,” said one of the signatories, Jeffrey Hayes, president of Stratalys Research & Consulting.
Similar comments have come from Warren Buffett, the investment guru who ranks among the world’s richest individuals.
“I think that people at the high end — people like myself — should be paying a lot more in taxes. We have it better than we’ve ever had it,” Buffett said in an ABC News interview.
The efforts come with Congress struggling in the face of tax cuts expiring at the end of this year.
If no action is taken by December 31, the current top rates of 33 and 35 percent would return to pre-Bush levels of 36 and 39.6 percent for the richest Americans. But taxes would also rise on all Americans if Congress fails to act.
Many Republicans are pressing to extend the tax cuts to stimulate a wobbly economy.
Obama and his Democratic allies are urging extended tax cuts for all but the wealthiest two percent of Americans — claiming this move would help raise 700 billion dollars over 10 years to ease a crushing deficit.
“I’m glad there is a group of people who are sticking out their necks to say, ‘Tax me more,’” said Mike Lapham of United For a Fair Economy’s Responsible Wealth project, which has recruited 700 people in high-income brackets to work for a more progressive tax structure.
“People complain that the government should do more for New Orleans (after Hurricane Katrina) and for the (Gulf of Mexico) oil spill, but the reality is we’ve cut back on a lot of the things our government could do.”
Jim Nunns, a senior fellow with the Tax Policy Center of the Brookings Institution and Urban Institute, said there is some momentum to raise taxes on the wealthy “because they’ve captured most of the growth in incomes over the last 30 to 40 years,” creating a wider rich-poor gap.
But Nunns said taxing the rich alone would not solve US fiscal problems.
The better solution is to “broaden the base” so that all taxpayers contribute more, he said.
Analysts also acknowledge a climate where any tax hike is politically unpopular, especially in view of the belief that increases could choke off the economic recovery.
Bruce Josten of the US Chamber of Commerce said in an open letter to Congress that all tax cuts should be extended to boost confidence and end uncertainty about tax policy.
“The Chamber believes that no one should have their taxes raised during a time of economic weakness — not individuals, not small businesses, not large businesses,” he said, adding that this “would only hinder the already too weak recovery.”
by Joseph DiStefano
Philadelphia Inquirer, Nov. 28, 2010
“In a spirit of Thanksgiving,” as they put it, more than 400 U.S. business owners and professionals last week signed a petition circulated by a Boston group, Wealth for the Common Good, that called on Congress and President Obama to let tax cuts for high-income earners expire Dec. 31.
The cuts, implemented under President George W. Bush, are set to expire for all taxpayers, but efforts are under way to extend them. The petition signers say there should be no extension of the cuts for those with taxable incomes of more than $200,000 for individuals and $250,000 for joint filers.
Citing government estimates, they wrote that letting rates return to the high-30-percent range would raise “an estimated $700 billion over 10 years” to invest in “education, health, job creation, renewable energy, transportation,” and you get the picture.
The idea has support in some surprising places. “People at the high end – people like myself – should be paying a lot more in taxes,” the second-richest American, Berkshire Hathaway boss Warren Buffett, told ABC News in a program scheduled to air Sunday night.
The idea that money will “trickle down” from the rich to workers “has not worked the last 10 years, and I hope the American people are catching on,” Buffett said.
The Boston group is taking the case to the working rich at local levels.
“It’s damaging to the economy, both short-term and long-term, to continue the tax cuts for the top income rates,” especially for “unearned” investment income, petition-signer Joe Magid, owner of Gryphon Systems, a Wynnewood info-tech consultant, told me.
“Your hedge fund managers . . . they’re paying just 15 percent,” said Magid, while mid-six-figure incomes are charged more than twice as much. “That’s sort of insane.”
But don’t low taxes promote investment and job growth? “Ridiculous,” Magid said. “An ‘S’ corporation [that passes both income and losses on to shareholders, who then report income or losses in their individual tax returns] like my business, whatever isn’t spent to hire people and improve the infrastructure of my company goes to me, the owner, as personal income that I’m paying a lower tax on.
“That [incentivizes] me not to hire people. If the marginal tax rate on the 10-millionth dollar of my income is the same as on my first $1 million, I have no incentive to invest in my company. If I had to pay higher taxes it would be easier to decide I should invest more in my company and make more money.”
Magid cited a 2002 article in the Harvard Business Review by scholar Mark Buchanan, subtitled “Wealth Distribution and the Role of Networks,” that associates lower tax rates with greater wealth disparity, and vice versa.
“The bottom line is, if you tax work over investment, you concentrate wealth,” Magid told me.
“Hello! Look what’s happened in this country since [President Ronald] Reagan’s tax cuts.”
Magid is for low taxes on venture capital investments and other financing for early-stage companies. But why, he asks, should hedge funds and buyout-fund managers and other wealthy Americans be “subsidized” if they’re just “going to use the money for offshoring jobs” through foreign investments?
Steve Weinberg, who is the second-generation owner of National Foundry Products Inc., a Philadelphia manufacturers’ rep agency, says he signed the petition “out of a basic sense of fairness.”
The way Weinberg figures, “We have to invest in our future. I want to see our country succeed. If we don’t invest, we’re not going to succeed.
“In my work, I go around the world. I know what happens in countries where there’s no national infrastructure to support hardworking people.
“India is emerging. They’re moving in the right direction because they have invested in their national infrastructure. Meanwhile, we’re cutting back. It’s a moral decision, and it’s a business decision, and it’s wrong.”
Weinberg and Magid both admitted their own incomes haven’t always stayed above the $200,000 threshold in the recent recession.
And even in the low- to mid-six-figures, says Weinberg, “It’s hard to give more [in taxes]. If you send your kids to private schools, it’s easy to run up expenses. I have empathy.
“But we have to invest in education, in energy, in R&D. It makes more sense for people who are a little more able to make due to do their part.”
by Chuck Collins
Huffington Post, Nov 23, 2010
A Mighty Mobilization to Prevent a Democratic Cave-in is Underway
After the mid-term elections, the Obama Administration and some Democratic leaders signaled that they might compromise on extending the Bush-era tax breaks for wealthy households. Compromises include extending them for several years — or raising the income threshold higher to $1 million.
Two years ago, President Obama took enormous lumps for his campaign pledge to let the Bush tax cuts for higher income households expire (Remember “Joe the Plumber”?). And the polls consistently indicate that the public supports letting the tax cuts for the rich expire, even after Tea Party anti-tax campaigning and a drum beat of misinformation alleging that tax hikes will decimate small business.
Right after the election, the Obama Administration signaled that they would meet with GOP leaders on November 18th to capitulate. Fortunately, the meeting was postponed until November 30th. In the meantime, progressives have mobilized with unusual force and clarity.
Americans For Responsible Taxes is coordinating a national mobilization of organizations pressing to extend the middle class tax cut and let the income tax cuts for the wealthy expire.
Net roots groups such as Moveon.org and Progressive Change Congressional Committee, have gathered hundreds of thousands of signatures to petitions urging the President not to cave in. The Other 98 percent put up a clever graphic campaign illustration, “The $700 Billion Question,” juxtaposing choices such as “Fix every substandard bridge in America,” vs. “Fix America’s Gold-plated foot rests.” There is a plan to publicly display these petitions in Lafayette Park after Thanksgiving.
The small business community has pushed back against claims that letting the tax cuts expire would hurt small business. Coalitions of businesses, including Business for Shared Prosperity and Main Street Alliance have made the business case for letting the tax cuts expire. Business for Shared Prosperity issued a report demonstrating how few small enterprises would pay the tax increase. Thoughtful accountants like Brian Setzler have pointed out in op-eds that small businesses make hiring and business reinvestment decisions before their income is taxed.
Even some of those who would pay the higher taxes are stepping up to. Over 415 high income individuals, those who would pay the higher taxes, have signed a “Let Our Tax Cuts Go” petition at Wealth for the Common Good. And a new effort, a group of 45 “Patriotic Millionaires for Fiscal Strength” have issued a call to President Obama to let their tax cuts expire.
The lesson for progressive activists is we can’t depend on President Obama to do the right thing without substantial pressure. He still may compromise, but at least it won’t because progressives didn’t fight for the right thing. We knew that already, didn’t we?
Boston, MA, November 23, 2010– In a spirit of thanksgiving, a group of 410 high-income Americans have signed a petition sponsored by Wealth for the Common Good, a network of business and civic leaders, wealthy individuals and partners promoting fair and adequate taxation to support public investment in a healthy economy.
These high-income earners join thousands of others to “Call on Congress and President Obama to allow the Bush-era tax cuts for those with taxable incomes over $200,000 (individual) and $250,000 (couple) to expire on Dec. 31, 2010. The increased revenue, an estimated $700 billion over 10 years, should go toward making long overdue investments in education, health, job creation, renewable energy, transportation and other infrastructure.”
Included among the petition signers are bankers, lawyers, doctors, financial professionals, business owners and civic leaders.
Jeffrey Hayes, president, Stratalys Research & Consulting signed the petition “Because my success owes as much to luck as hard work, and much of that luck is a function of the social, political, and economic structures that the government makes possible. I’ve had a good run over the last few years. There’s no question that others now deserve to share in that prosperity.”
Peter Heegaard, retired banker and former Managing Principal of Lowry Hill, a subsidiary of Wells Fargo says: “I’m a big believer in the importance of mentorship, of helping the next generation of business and community leaders find their way. But I also view efficient government and adequate tax revenue as essential ingredients in fostering the fertile soil for business development and healthy communities. Just as a healthy farm or garden needs a balance of nutrients, our country needs a balanced and fair tax system.”
Bryan Kirschner, VP at a global opinion and strategy consulting firm says: “Recently, I took a new job as an executive in a consulting company. We compete for clients all over the world. To grow my business, I need new employees with great critical thinking and analytical skills. I want the United States to invest in education, making it possible for every child to receive quality early childhood education, and ensuring the same federal financial aid that helped me is available to every family working hard and making sacrifices to pursue higher education. As Congress begins debate over whether to extend the Bush-era tax cuts for the wealthy or let them expire at the end of the year, I hope our elected officials have the courage to let my tax cuts expire.”
The group is delivering the petition to Congress and President Obama after Thanksgiving, as the debate about the expiring Bush-era tax cuts for high-income households is expected to heat up.
For a list of petition signers, visit www.wealthforcommongood.org. To arrange interviews with petition signers, contact Bob Keener or Chuck Collins.
by Sally Jones
Posted on American Forum, Nov 23, 2010. Augusta Free Press, Nov 24, 2010.
By Sally Jones
“Cut My Taxes!” Americans have heard this cry for years — and we’ve heard it shouted angrily in recent months. We hear that we pay too much in taxes, that government makes poor use of our money, and that our prosperity would rise if only taxes would fall.
But in reality our taxes have fallen steadily in recent years. In 2001 and 2003 Congress passed temporary tax cuts which will expire at the end of 2010. We must now decide what good or bad has come of that experiment and what tax law we want for the future.
Most of us recognize that one size doesn’t really fit all — and this holds true for income tax rates. Maintaining a lower level of taxation for the vast majority of Americans makes sense in today’s hard times. But why should we do the same for the tiny percentage of citizens — a minority to which I gratefully belong — whose annual earnings exceed $250,000? The American people borrowed $700 billion to give people like me a tax cut over the last decade. Why should they borrow an additional $700 billion to extend the tax breaks?
Congress should let our tax cuts expire for the sake of the country, especially in this economy. Who would lose by this step toward tax fairness? Only those among us who can afford such a loss. Who would gain? All Americans — including those few of us who would pay more taxes.
We cannot sustain our nation — not its defense; not its essential infrastructure such as roads, rails, bridges, dams and communications; not its economic place in the world; not the health and education of its people; not its ability to respond to natural disasters such as earthquake, flood or hurricane; not the protections we expect it to provide against man-made disasters, toxins (domestic and imported), buccaneering corporations or hazardous products — without securing for our government the funding it must have to accomplish all of these things.
Recognizing our shared responsibility — in the present instance by payment of taxes — we might live up to the example of earlier generations who left for us a remarkable system of institutions and infrastructure. By abandoning that responsibility, we would betray both our predecessors and our descendants, and we would gain nothing but a temporary self-indulgence, at a price that will impose itself on present and future generations.
Do we bear any collective responsibility? I think so. Consider the example of the season.
On Thanksgiving Day most of us will gather with family or friends or both. We will sit down to tables crowded with the various dishes that speak to us of this special occasion, and indulge ourselves more than we usually do. However much or little else we feel thankful for on that day, we will heartily thank the one or more cooks who toiled in the kitchen to prepare this dinner for us.
We thank the cooks because we have seen their effort first hand. But how many others have contributed to make our feasts possible — others whom we never think about or credit? Who taught our cooks their skills or created our recipes? Who grew, harvested, preserved or transported the foods? Who built our ovens, plumbed our kitchens, and made our utensils, dishes and tables?
Those of us with high incomes ought to ask similar questions about the plenty we enjoy daily. We could hardly enjoy our success without assistance we hardly notice: the infrastructure that allows businesses to grow and prosper, the law enforcement that protect patents and copyrights, and the productiveness and purchasing power of publicly-educated fellow citizens. Without national investments supported by our taxes no wealth would be sustained in this country and those at the top would not have the extraordinary lives they have today. Let us remember to be grateful.
Let’s make sure those outside of the top two percent of Americans can live and thrive. Unless we foster prosperity for our country and for every citizen, all of us will suffer the consequences of living in a society of the ailing, the untrained and inefficient, and the unruly. Let’s pay the taxes — those of us who can afford them — to sustain the America that has offered opportunity since its founding. Unless we restore strength to its economy, institutions, and structures, our country will decline – and everyone’s prospects with it.
Jones is a member of a high-income household in Minneapolis who supports Wealth For The Common Good and its goal of promoting shared prosperity and fair taxation.
By Bryan Kirschner
Washington Forum, posted October 18, 2010
When Congress debates whether to extend the Bush-era tax cuts for the wealthy or let them expire at the end of the year, I hope our elected officials have the courage to let my tax cuts expire. Sure, I would pay less in taxes if Congress extended my tax cuts, but as a citizen and business executive, I think that would be shortsighted and irresponsible.
My family was not affluent. Growing up, I never worried about middle-class basics like a new pair of shoes every year for school or whether we’d have a roof over our heads next month. But luxuries I take for granted today — like taking vacations in Europe— were outlandish things people like us didn’t do.
But my parents, neither of whom went to college, did make one thing clear from as early as I can remember. They were committed to giving their kids the chance to pursue as much education as they wanted at the best possible schools to which they aspired.
I attended an Ivy League university. This laid the groundwork for a successful decade in the technology industry. In my career, I’ve made more money than I or my parents could have ever expected or imagined.
While I worked hard for all my academic and professional achievements, I couldn’t have gotten to square one without my parents’ commitment and federally subsidized student aid. For all their willingness to sacrifice, there just wasn’t enough money in the bank to make college work without Stafford loans and Pell grants.
Back in 2001, Congress voted for President Bush’s tax program, including substantial tax reductions for households with incomes over $250,000.
Letting the tax cuts that apply to only the richest 2.5 percent of taxpayers expire will restore our taxes to the same rate we paid in 2000. It would be an exaggeration to say I wouldn’t notice, but I can guarantee it won’t change my lifestyle one bit. But that change would generate an estimated $700 billion in revenue over the next decade.
That’s money that can be invested in our nation’s future, including infrastructure and education.
Recently, I took a new job as an executive in a consulting company. We compete for clients all over the world. To grow my business, I need new employees with great critical thinking and analytical skills. I want the United States to invest in education and make it possible for every child to receive quality, early childhood education. I want our country to ensure that the same level of federal financial aid that helped me is available to every family working hard and making sacrifices to pursue higher education.
I am appalled that, even though research has clearly shown that hunger impairs a child’s ability to learn in school, millions of American children are living in households that struggle to afford enough nutritious food and less than half of eligible children are receiving school breakfast each day, according to the Food Research and Action Center.
I could tell you my only motivations to insist that Congress let my tax cuts expire are public spirit and compassion. But that wouldn’t be the whole story. I think it’s a competitive necessity in a global market to ensure those of us enjoying tremendous financial prosperity today pay our fair share to make the long overdue investments in our nation’s future.
That’s good for my business. It’s the right thing to do for the next generation. It’s the smart thing to do to grow the U.S. economy. And the good news is–people like me can afford it.
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Kirschner is a VP at a global public opinion and strategy consulting firm and a member of Wealth for the Common Good, a network of business and civic leaders, wealthy individuals and partners promoting fair and adequate taxation to support public investment in a healthy economy. He lives in Seattle.
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Copyright (C) 2010 by Washington Forum. 10/10
by Beverly Caruso
Minnesota Editorial Forum, posted Oct. 26, 2010. Stillwater Gazette, Nov. 11, 2010.
There’s heated debate over whether to extend the Bush-era tax cuts for families with incomes over $250,000.We’re hearing the argument that letting the high-end tax cuts expire will hurt business. Yet I’ve seen first-hand how well-designed tax policy is critical for spurring innovation and business development. It plays a very different role than the anti-tax crowd leads us to believe.
CyberOptics, a leading high-tech company in the area of electronic inspection, was founded by my husband, Steve Case, in 1984, and now employs 180 people in Minnesota and around the globe. How this business came about tells a very different story about the role of our tax dollars – and the public investments they support – in job creation. This is an important story to tell if we want to recreate the fertile ground that allows new companies to start up and become successful, sustainable job creators.
Steve was a physicist and entrepreneur, whose education was financed totally by National Science Foundation grants and scholarships. Later, as a young professor he would again gain our government’s support through a Fulbright Scholarship. The scholarship led us to Germany where Steve deepened his scientific knowledge and met executives in Europe who would become major clients of his new business. Steve always said that fellowship year had a profound impact on his creativity, confidence, and skills. As a professor at the University of Minnesota, his partnership with a government contractor made it possible to conceive of and establish CyberOptics.
Every step of the way, programs funded by our tax dollars paved the way for Steve and CyberOptics’ success. The return on our tax dollars through these investments has been high.
While it’s easy to think that companies like Google and Sun Microsystems are the result of one or two people with the intelligence, creativity, and entrepreneurial spirit to take a risk and win big, the truth is more complex.
Like CyberOptics, these businesses rely on the court systems that enforce patent and copyright laws, roads, railroads and bridges that bring raw materials and deliver finished product, as well as the research and development grants to institutions of higher education, the high-quality primary and secondary public schools that educated generations of American students, and the grants and scholarships to those students during college and graduate school.
I would argue that the reason the United States has been so economically successful since the 1940s, is the combination of regulated capital markets and thoughtful, well-funded public institutions and structures. Steve’s story, like the story of so many American entrepreneurs, illuminates the role that public investment and public institutions play in creating the small companies that are the job engines we so desperately need.
Our country’s problems are large and complex, and we must attend to them now and cease putting them off. According to a report by Wealth for the Common Good, between 2001-2008, tax cuts for the wealthy cost the U.S. Treasury $700 billion, directly adding to the national debt. Retaining these tax cuts will likely cost another $700 billion over the next decade.
One thing we can do is to tell Congress to let the Bush-era tax cuts on the wealthy expire this year. The rise in incremental tax rates on people like me would be modest but the $700 billion in savings over 10 years would be a wonderful investment in the next generation. For those who have benefited enormously from our country’s investment, it’s time to share that opportunity with others. Letting tax cuts for the wealthy expire at the end of 2010 is a good and necessary first step.
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Caruso is a psychotherapist, community volunteer and civic leader in the Twin Cities. Her late husband, Dr. Steven Case, is the founder of CyberOptics, a high tech firm in Minnesota. Dr. Case was killed in a plane crash in June 2009.
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Copyright © 2010 by Minnesota Editorial Forum. 10/10
The political landscape has changed and that makes our message on taxes as relevant as ever: progressive tax reform will strengthen our economy.
The President has called for a White House summit on the tax cuts on November 18th and has signaled that he may compromise by temporarily extending the higher-income cuts.
We all need to keep up the pressure and broadcast the message that instead of spending $700 billion on tax cuts for those of us with the highest incomes we should use that revenue to build a stronger, more sustainable and equitable economy.
Wealth for the Common Good is now preparing for a big push during the “lame duck” session to restore the top tax rates, but we can’t do this work without your continued advocacy and support.
• Join the briefing call on Monday, November 15th at 2:45 PM. We are co-sponsoring a briefing with Business for Shared Prosperity, American Sustainable Business Council and other partners to hear from Steve Wamhoff, Legislative Director of Citizens for Tax Justice and Frank Knapp, President of the South Carolina Small Business Chamber of Commerce about the current legislative environment and tips for taking action. Call in #: (760) 569-7676, access code 818215.
• Participate in our call-in day on Tuesday, November 16th. Click here to reach members of Congress through our toll-free call back service. We’ll send a reminder on Tuesday.
• Write an op-ed. It’s not too late! Contact Bob Keener at bobkeener@businessforsharedprosperity.org. The voices of business people and those who would pay the high-income tax are particularly needed right now.
• Submit a letter to the editor. You can use our tool to access newspapers across the country. See samples for incomes over $250K, under $250K, and small business.
Also, please consider making a gift to Wealth for the Common Good. It’s a critical time to get our message out, and we rely on individual support to do this work.
Take a look the summary of our recent accomplishments, and what’s ahead. Contact Alison Goldberg at alison@wealthforcommongood.org or Chuck Collins at chuck@wealthforcommongood.org for additional information. Together we can shift the public debate about taxes. Now’s the time to turn up the volume!
Thanks for your commitment to tax fairness,
Alison Goldberg, Chuck Collins, Bob Keener, Ann Manning, Bill Lyons & Scott Klinger