By Lynnley Browning

On Tuesday, hundreds of these businesses will join in the announcement of a grass-roots campaign against tax avoidance that has already drawn support from a prominent lawmaker.

The campaign, Business and Investors Against Tax Haven Abuse, is backed by Senator Carl Levin, Democrat of Michigan, who in recent years has investigated offshore tax havens and the large companies and wealthy investors that use them.

Senator Levin plans to announce the campaign with its supporters, a coalition of three nonprofit groups — the American Sustainable Business Council, Business for Shared Prosperity and Wealth for the Common Good.

They will release a 25-page report that contends that American multinational corporations use havens to avoid $37 billion in federal taxes each year, a figure the groups call conservative.

“This $37 billion could be used to fund initiatives to support America’s small businesses — the nation’s biggest job creators — by increasing their access to capital, increasing their opportunities to invest and rewarding entrepreneurship,” the report says.

With that money, the report says, “we could establish a $30 billion Small Business Lending Fund to provide capital investments to small community banks (those with less than $10 billion in assets) to increase lending to small enterprises.”

Bob Keener, a spokesman for a coalition member, Business for Shared Prosperity, said on Monday that 400 executives, investors and representatives of businesses had signed a petition in support of the campaign. They included a small shoe company in Maine, a consultancy in Virginia and cleaning services, he said.

The campaign is unusual because it is the first time that small businesses have organized to combat offshore tax avoidance and evasion in a significant way.

“The Business and Investors Against Tax Haven Abuse campaign represents the first time in recent years that business people who believe tax havens are bad for business are mobilizing publicly to end the abuse,” Mr. Levin said Monday in a statement.

The Treasury Department estimated in 2009 that the international gap between taxes owed and taxes paid ranged from $43 billion to $123 billion a year for corporations and individuals.

The report calls for laws that would block transfers of intellectual property designed to evade taxes; ban shell corporations that earn profits offshore, even when a corporation’s management team is based in the United States; repeal a rule that allows American corporations to reduce or eliminate their United States tax bills if 80 percent of their business takes place overseas; and set penalties for government contractors that use tax havens.

By Chuck Collins

A century ago this summer, Theodore Roosevelt gave his remarkable “New Nationalism” speech about the dangers of concentrated wealth and corporate power. After witnessing a decade of financial corruption and corporate malfeasance, Roosevelt called on the nation to “effectively control the mighty commercial forces which they have themselves called into being.”

Part of his vision was a “graduated inheritance tax on big fortunes, properly safeguarded against evasion and increasing rapidly in amount with the size of the estate.” Congress instituted an estate tax in 1916 that was in place until last January. For most of the last century, the estate tax was a single tax rate. A person with $5 million was taxed at the same rate as someone with $5 billion.

A century later, a group of Senate progressives have heeded Roosevelt’s call. On June 24, four US senators introduced the “Responsible Estate Tax Act,” which includes a graduated rate structure that taxes billionaires at rates significantly higher than it does multimillionaires. Preliminary estimates indicate the proposed tax would generate $319.2 billion over the next decade.

Led by Senator Bernard Sanders and joined by senators Sheldon Whitehouse, Tom Harkin and Sherrod Brown, the proposed estate tax reform would close loopholes, encourage conservation easements and exclude from the tax the minuscule number of small businesses that would otherwise be subject to the tax. This estate tax rate would range from 45 percent on estates under $10 million to a 65 percent “billionaire surcharge” on estates over $500 million ($1 billion for a couple).

The timing is great, because the Senate may deliberate the future of the estate tax in July.

Due to Senate inaction last fall, the estate tax expired last January 1. The absence of an estate tax for 2010 will cost an estimated $14.8 billion this year. Already, one Texas oilman, Dan Duncan, became the first billionaire in US history to die without any estate tax in place. Duncan was worth $9 billion and would have paid an estimated $4 billion in estate taxes.

Progressives in Congress are in an advantageous position to press for a good reform. If Congress takes no action, the estate tax law sunsets on January 1, 2011, and reverts to its year 2000 levels—with a wealth exemption of $1 million and a 55 percent rate.

Unfortunately, Senate Democratic leaders are like poker players with three aces in their hands but who are considering folding. They don’t view their leverage as an opportunity to press for a bold and creative reform. Instead, they are leaving the estate tax redesign to senators Blanche Lincoln and Max Baucus, politicians committed to weakening the law.

We need a mighty mobilization to pressure the Senate to take up the Responsible Estate Tax Act. Fair tax advocates are mobilizing, including Wealth for the Common Good, a network of business leaders and wealthy investors. They are backing the legislation and have compiled fact sheets and other resources.

Theodore Roosevelt had nothing against the wealthy. “We grudge no man a fortune,” he said, “which represents his own power and sagacity, when exercised with entire regard to the welfare of his fellows.”

But Roosevelt understood that concentrations of wealth undercut the common good—and threatened democratic institutions. “The really big fortune, the swollen fortune,” Roosevelt intoned in his “New Nationalism” speech, “by the mere fact of its size acquires qualities which differentiate it in kind as well as in degree from what is possessed by men of relatively small means.”

A century later, as we live through our Second Gilded Age, we must rally for a progressive estate tax as a way to raise urgently needed revenue, create real jobs and thwart plutocracy.

By David Kocieniewski

When Congress passed a law that eliminated the estate tax for people who die this calendar year — with plans to bring it back with a vengeance in 2011 — the joke among estate planners was that 2010 might go down as the year of
“Throw Momma From the Train.”

The estate tax is one of those hyper-combustible issues where emotion, and shrewd lobbying, can loose an outsize uproar. That point was made last week with news that the multibillion-dollar fortune of a Texas oil tycoon, who died this year, would pass to his children and grandchildren free of the federal estate tax.

But before railing against the wealthy — or encouraging your rich relatives to take up cliff diving — it might be wise to look at what the real-world effects might be next year, when the estate tax of up to 55 percent might be levied on any estate worth more than $1 million.

At first blush, that policy sounds destined to take big chunks out of estates across a broad swath of the population. While supporters say the estate tax affects only the richest members of society and helps counteract the concentration of wealth, that million-dollar limit would seem to ensnare many people who consider themselves decidedly middle class — especially in the Northeast and California where home values are high.

What is the dividing line between wealthy and upper middle class? Or between someone who owns an estate and someone lucky enough to have bought a home decades ago and watched its value grow to seven figures?

According to the Tax Policy Center, a research group, unless Congress revises the law by Jan. 1, the number of estates affected in 2011 would increase to 44,200 next year from 5,500 in 2009.

Even so, that figure represents less than 2 percent of the 2.5 million Americans expected to die next year, and is far below historical levels. In 1976, 139,000 estates representing 7.6 percent of all deaths were taxed when the exemption was set at $60,000 (nearly $230,000 in buying power today).

And these figures also don’t take into account the world of estate planning, where numbers can be fungible. With a bit of planning, tax lawyers say, most families can legally shelter significant portions of their estates. In addition, the law contains provisions that allow owners of small businesses and farms to take additional exemptions.

Such caveats offer little comfort to those who call the tax the “death tax” and have fought for repeal, saying it is a form of double taxation.

“The proper exemption should be everything,” said Dick Patten of the American Family Business Institute, a lobbying group that says the estate tax stifles job creation. “These people have already paid a lifetime of taxes to build the businesses they own.” (Estate tax supporters say the levy helps the government capture a portion of capital gains that have never been taxed at all.)

But with the federal deficit soaring and Democrats in control of Congress, even the most ardent advocates of repeal have resigned themselves to trying to limit the estate tax this year rather than eliminate it. Last Thursday, Senator Jon Kyl, Republican of Arizona, said he was close to a deal that would raise the exemption to $5 million and lower the rate to 35 percent. President Obama has said he favors restoring the 2009 levels of $3.5 million for individuals and $7 million for couples, but it is unclear what, if any, changes might make it through Congress by year’s end.

The lurching debate in many ways reflects the country’s historical ambivalence about the issue. For most of American history, inheritance taxes were imposed on the wealthiest citizens only as a temporary measure in times of war. By the early 20th century, as the Industrial Revolution led to a growing gap between rich and poor, leading figures like President Theodore Roosevelt and the steel baron and philanthropist Andrew Carnegie began promoting estate taxes as a way to diffuse a concentration of wealth that they considered a threat to democracy.

While much of the anti-estate-tax movement has been financed by a handful of wealthy families, there are also billionaires who have spoken out in favor of the tax, most notably Bill Gates and Warren Buffett. Mr. Buffett warned Congress in 2007 that without an estate tax, the United States runs the risk of becoming a “dynastic plutocracy.”

But where does that dynastic plutocracy begin? There is an astronomical gap between Mr. Buffett’s fortune, which Forbes estimated at $47 billion, and two retirees in Marin County, California, whose life’s work might have allowed them to leave their heirs $3.5 million in assets, mostly in the value of a house.

Even some strong supporters of an estate tax would say that the couple in Marin is not wealthy, and support the 2009 exemption of $7 million for couples, saying that it offers a dividing line between the upper middle class and the wealthy. And then there are those who would say that at least relative to the rest of the population, that couple is rich. “If a couple has $7 million to leave to their three children, their kids could conceivably never have to work again,” said Chuck Collins, co-founder of Wealth for the Common Good. “I don’t think most people would consider that middle class. Or think that creating a generation of dilettantes is a good thing.”

By Chuck Collins & Sam Pizzigati

How can a civilized nation afford to hand the heirs of the super-rich billions of dollars tax-free and not afford to keep teachers in classrooms?

Dan Duncan died at the end of March. The Houston gas pipeline mogul left behind a spouse, four children, four grandkids, and a fortune worth $9 billion.

Duncan, a prominent philanthropist who supported cancer research and the Boy Scouts, left behind another distinction. He was the first American billionaire to ever leave his heirs a tax-free fortune.

America’s first-ever billionaire, John D. Rockefeller, died in 1937. His heirs faced a 70 percent estate tax on the bulk of his estate. Duncan’s heirs are enjoying a zero percent estate tax. When he died, his son and three daughters became instant billionaires.

If Duncan had died last year, his heirs would have had to share their new billions with the rest of America. But for the first time since 1916, no estate tax graces the tax code. That’s because it’s been suspended for the duration of this year, thanks to a 2001 Bush administration maneuver and an impasse in Congress.

Heirs to billion-dollar fortunes, if they sell the assets they inherit this year, will have to report whatever windfalls they rake in as taxable capital gains. But analysts don’t expect this new capital gains rule to raise nearly as much money as the estate tax would have.

How much will the absence of an estate tax this year cost the Treasury? It’s impossible to say. No one knows how many other billionaires may pass to the great beyond between now and New Year’s Eve. We do know that in 2008, the latest year with figures available, the federal government collected $25.7 billion in estate tax revenue.

That sum, by coincidence, would be enough to fully fund the $23 billion Rep. George Miller (D-CA) and Sen. Tom Harkin (D-IA) want Congress to appropriate to avert the nation’s worst teacher layoff crisis since the Great Depression. Without additional federal funding, our schools may lose 300,000 teachers, causing class sizes to balloon across the country.

But getting that help seems to be a long shot. The 2009 stimulus legislation saved tens of thousands of teacher jobs. But stimulus dollars are running out, and deficit hawks in Congress say we can’t afford more.

How can a civilized nation afford to hand the heirs of the super-rich billions of dollars tax-free and not afford to keep teachers in classrooms?

We can trace our current budget inanity back to when the Bush White House put on a full-court press to repeal the federal estate tax. The administration lacked the votes needed for a permanent repeal. However, it did manage to pass lower estate tax rates over the rest of the decade and a repeal in 2010. Under that legislation, the estate tax would reappear in 2011.

White House strategists never expected to see this reappearance. They counted on a future Congress to extend the repeal beyond this year. But by 2007, the GOP had become a minority in the House and Bush lost his shot at permanently scrapping the tax.

Meanwhile, estate tax supporters were confident the 2008 election results would make it possible to overturn the 2010 repeal. But in 2009, lawmakers deadlocked over many issues.
The year ended without any congressional estate tax action.

Apparently no one in Congress expected a billionaire of Dan Duncan’s magnitude to actually go and die without an estate tax on the books.

There’s hope that Congress will bring the estate tax back for the remainder of the year, and apply it retroactively. But with so much at stake, lawyers for Duncan’s heirs would likely battle that kind of action in the courts. The longer we go without the tax on the books, the higher the chances the courts will agree with them.

After his death, a close friend of Duncan’s noted “he really wanted to help everybody.” If Duncan’s heirs want to help everybody, they’ll troop over to Capitol Hill and demand the immediate reinstatement of a meaningful federal estate tax.

Chuck Collins directs the Institute for Policy Studies Program on Inequality and the Common Good. Sam Pizzigati edits Too Much, the Institute’s online weekly newsletter on excess and inequality. This column was distributed by OtherWords.

By Kenneth Lewis

I don’t love taxes, nor am I impressed with everything government does with my money. But at the end of this year, Congress should let the 2001 and 2003 federal tax cuts sunset for households with incomes of more than $250,000.

I have a responsibility to my country to pay my fair share so that we can make investments for future prosperity. My 30 years in business taught me the importance of orderly markets, an educated work force, public infrastructure and a functioning legal system.

I’m troubled by how two distinct tax systems have emerged in our country over the last three decades. One tax system contains loopholes and special provisions that enable wealthy individuals and global corporations to shift and hide taxable income and receive special treatment. The other tax system, applicable to everyone else, has few loopholes and is fairly straightforward: A portion of a working person’s earnings is simply withheld from his or her paycheck to ensure tax payment.

America’s premier investor, Warren Buffett, recently described his own experience with our two tax systems when he revealed that he pays a lower rate of federal income tax than his secretary. Buffett said he pays 17.7 percent in taxes because most of his income comes from investments, which are taxed at the lower capital gains rate of 15 percent. But his secretary pays more than 30 percent because her income comes from wages. Our tax system gives a preference to income from wealth, while income from work is taxed at higher rates.

Large global corporations also benefit from the privileged tax system with a wide array of loopholes and dodging schemes. For example, General Electric generated $10.3 billion in pretax income in 2009 but ended up paying nothing toward national security, infrastructure and property rights protections.

How did the company do that? One way is that global corporations like GE set up subsidiaries in foreign countries such as the Cayman Islands that have low or no corporate income tax. They claim their profits are made there and their losses are made in the U.S., thereby avoiding paying any U.S. taxes. A small business, anchored in our country, has to unfairly compete against companies with such loopholes.

According to a report by Wealth for the Common Good, a network of business leaders, high-income households and partners working together to promote shared prosperity and fair taxation, America’s middle class pays the same percentage of its income in taxes as it did in 1960. But over the same period of time, the wealthiest 0.1 percent of households, with average incomes of more than $7 million, watched their taxes decline by half. Income inequality in the U.S. has reached historic proportions.

The federal tax rate for the wealthiest people is at a historic low. Today, it is 35 percent, whereas between 1936 and 1980, it never went below 70 percent.

These tax shifts dramatize the urgent need to fix a political system warped by campaign cash and lobbying influence. As wealth and power concentrate in the hands of the few, the gulf between the two tax systems grows wider. To illustrate this point, the Wealth for the Common Good report shows how the richest 1 percent’s share of total personal income in the U.S. more than doubled from about 10 percent in 1979 to 23.4 percent in 2007.

I have certainly benefited personally from the privileged person’s tax system, but considering the federal deficit, I want to blow the whistle on it. As an individual and business leader, I believe we need to move toward having one tax system where everyone pays his fair share.

As Congress begins debate over what to do about the Bush-era tax cuts for the wealthy, I hope lawmakers have the bravery to let mine expire while extending the tax cuts for the middle class.

Between 2001 and 2009, the federal income tax cuts for households with incomes of more than $250,000 added $700 billion to our national debt. If we extend them, they will add an estimated $826 billion over the next decade. That would be very irresponsible.

In my global travels, I’ve seen that societies that do not have functioning and fair tax systems have lower standards of living, poorer public services and less economic mobility and opportunity. Taxes pay for roads, infrastructure, health, education and other essential services and public institutions that create the foundation for economic prosperity.

Taxes are the way we make investments to pass on prosperity and healthy communities to the next generation. Those of us who have greatly benefited from this amazing society have a special obligation to pay our fair share. I want all young people to pursue their dreams as I was able to.

Kenneth Lewis is former president of Lasco Shipping Co. of Portland and former president of the Port of Portland Commission. He is also former national chairman of the I Have a Dream Foundation and is a member of Wealth for the Common Good.

By Eric Schoenberg

I am a wealthy American who supports higher taxes on wealthy people. I realize that agitating to pay more taxes is unusual. When I appeared on Fox News recently, the host, Neil Cavuto, opposed my position but also called me an altruist with a good heart, because I favored a policy against my own self-interest. I thank Neil for his kind words, but I disagree with him. I believe higher taxes on myself are in my own self-interest. Although repealing the Bush tax cuts for the wealthy will cost me a lot, I think doing so is necessary to address a looming national debt crisis that could severely harm me and my family. In the face of this threat, I consider it perfectly self-interested to worry more about the state of the overall national economic pie than about my own particular slice.

I’m hardly alone. According to a recent poll, 64% of high-income Americans who would be affected support repealing the tax cuts. But even if you agree with me that the deficit represents a serious threat to our collective well-being, I bet you’re surprised and even a bit skeptical that so many rich folks would favor taxing themselves more.

Consider research conducted by two psychologists, Dale Miller and Rebecca Ratner. They told a group of Princeton students that the Red Cross would be coming to campus for a blood drive. Because blood supplies were dangerously low, the organization was considering paying $15 for donations, and it wanted to get a sense of how much difference that would make. The students estimated that 63% of their classmates would donate if they got paid, almost double the 33% they predicted would donate without pay. But when asked whether they themselves would donate, those students were only slightly more likely to donate for $15 than for nothing: 73% vs. 63%. In other words, they thought their classmates would be more influenced by money than they actually were.

I believe this error reflects a powerful tendency in American culture to falsely equate self-interest with selfishness. Heirs to a long Western tradition of individualism, we view our lives as our own personal creations, and we think it both natural and morally appropriate to put our own individual goals first. Other cultures, however, have emphasized an alternative view of human nature that stresses the centrality of the group. A growing body of research suggests that human behavior cannot be understood without both perspectives. We don’t behave as if we were lone athletes in the game of survival but rather as team players who care as much about collective success as about our own performance.

Opponents of higher taxes offer a wholly individualistic view of motivation when they claim that people won’t work hard unless they themselves directly benefit. As a psychologist, I consider that claim dubious but also potentially self-reinforcing: If people think other people act selfishly, they’ll be likelier to do so themselves. A number of researchers have found, for example, that undergraduates who major in economics, which proclaims the primacy of self-interest, behave more selfishly than other students. That might happen just because selfish people choose to major in economics, but one study has found that the gap in behavior is larger for upperclassmen than for underclassmen, suggesting that economics majorslearn to behave more selfishly.

Some Americans seem to make a virtue of selfishness. For them individualism describes not merely the way humans are but also the way they should be. I disagree. I enjoy the luxuries my money can buy, but I also want public goods that can only be created collectively: a strong national defense, clean air and water, quality schools. To me, rational self-interest requires caring about the social groups to which we belong. We will all suffer if our national government can’t pay its bills.

This is why I think that with the threat of national insolvency looming, it is particularly important for as many people as possible to proclaim loud and clear that we don’t think selfishness is in anyone’s self-interest. And I am willing to put my money where my mouth is. Closing our budget deficits will require sacrifice by everyone, so I think it only fair to start by raising taxes on the group that has benefited most directly from the policies that lead to those deficits: wealthy people like me.

Eric J. Schoenberg is a former investment banker who now teaches behavioral economics at Columbia Business School. He is a member of Responsible Wealth, which brings together high-wealth and high-income individuals in support of progressive tax policy.

May we all thrive
by Libbey Goldberg

If all of us are to thrive in the United States, we need accountability and support from our public systems of education, health, and transportation —the very systems that we invest our hard-earned tax dollars in.

Unfortunately, the 2001 Bush-era tax cuts gave $700 billion in breaks over eight years to those with annual incomes more than $250,000. The government borrowed money to make these tax cuts possible.

These cuts are due to expire at the end of 2010, but Congress is considering a proposal that would extend them. I come from a family that will pay more if the cuts expire, and I’m urging our lawmakers and President Obama to allow let this happen. We can’t allow these irresponsible tax breaks for the wealthiest Americans continue.

If restored, these taxes could bring in an estimated $45 billion in annual revenue. That is money that could be far better spent on investments in our schools, infrastructure, research institutions and social services.

The story that I was told about how my family accumulated its wealth is a common one: “My grandfather grew up poor, the son of produce peddlers, Jewish refugees from Poland. He made his own fortune through sheer will, hard-work, shrewd business sense and intelligence.”

I know that this story is in large part true, but there are gaping holes. The truth is that my grandfather would never have achieved his success without the public education system, not to mention his white skin privilege, albeit Jewish. He would never have achieved this success without the community of Jewish professionals who had also depended on public infrastructure for their success. Attending the University of Texas opened all the doors to upward class mobility for my Papa Billy.

By allowing our public institutions to wither away without proper funding, we are closing the door for others to achieve success. The idea of the American Dream, pulling ourselves up by our bootstraps, is always an incomplete story.

Those of us who have disproportionately benefited from public institutions have a special responsibility to make sure that others can also benefit. Unless all of us are thriving, none of us is truly thriving. It is immoral and short sighted for wealthy families to evade paying their share of taxes so that their wealth accumulates more and more, being passed on through the generations. For this reason, I also urge Congress to restore the estate tax, which is suspended for the duration of this year, thanks to a 2001 Bush administration maneuver.

The wealth that I inherited is supposed to be “just for me,” according to my father. I see it differently. In order to take care of myself, I must also take care of my community. By investing in public institutions and community organizations, I am helping to create a society where everyone has enough, not just a select elite.

May we all thrive.

Libbey Goldberg is a chef and social justice activist living in Oakland, California

Listen on Free Range Longmont’s website.

By Dane Smith

Don’t blame — or favor — the rich: A new report (by rich people!) finds that the wealthy are earning much more and paying much less in taxes. 

As the rhetorical wars on tax policy escalate, let’s allow right up front two important points about rich people and their taxes.

First, most wealthy and successful people in Minnesota and the United States can be celebrated. They should not be blamed, individually or as a class, for growing economic inequality and our increasingly regressive federal and state tax systems. They are not entirely responsible for the no-new-taxes orthodoxy and the public disinvestment that is threatening our quality of life and our prosperity in Minnesota.

Second, raising taxes on top-income households can only be part of a solution to our long-term budget crisis. Here in Minnesota, more revenue should be raised from ending overseas tax havens, modernizing and overhauling our entire state-and-local tax systems — and we can still actually reduce some unfair local business taxes.

Savings from redesigning and reforming government also must be realized.
But a highly regarded collection of billionaires and millionaires — including Warren Buffet, Bill Gates Sr., and hundreds of wealthy Minnesotans — have been trying for years to tell us that their taxes have been cut too much and they can indeed pay more.

In Minnesota, my own organization, Growth & Justice, earned a lot of attention four years ago with a full-page newspaper ad, signed by about 200 affluent and successful Minnesotans, declaring that “WE CAN AFFORD TO PAY MORE IN TAXES And We Can’t Afford Not To.”

This group is equally focused on a “smart investment” policy agenda for Minnesota, and reinvesting in education, transportation, a cleaner environment, public health and other good public stuff that builds community and human capital.

The good news is that at the national level, conscientious wealthy people themselves are speaking up about growing inequality and the growing national debt, and framing their obligation as a patriotic duty.

“Previous generations of upper-income Americans paid a much higher share of their income in taxes,” says Chuck Collins, an heir of the Oscar Meyer meatpacking fortune and co-founder of a new organization of wealthy individuals and business leaders, Wealth for the Common Good, based in Boston. “The taxes they paid, in the middle of the 20th century, became the investments in everything from scientific research to schools that laid the foundations for a vibrant economy and an expanding middle class.”

That statement appears in a report written by Collins and released by his group this month, titled “Shifting Responsibility: How 50 Years of Tax Cuts Benefited the Wealthiest Americans.”

The report lays out a case that has been made by many reputable research organizations, including Growth & Justice. It shows that effective tax rates on the income of those in the top one percent have declined from 45 percent to 30 percent since 1979, while the same group’s share of total personal income has risen from about 10 percent to about 25 percent.

Let’s put it another way: The richest Americans now have a 250 percent larger share of the nation’s personal income, and their effective federal tax rates have been cut by one-third.

Meanwhile, as the federal tax system has become less progressive, the state-local systems continue a traditional pattern of increasingly regressive taxation.

In Minnesota, the highly regarded Tax Incidence Study shows that the wealthiest one percent pay less than nine percent of their income in state-local taxes, while all other income groups pay an average of about 12 percent.

The report notes that this tilt toward favoring higher-income folks has been accomplished under presidents and governors and Congresses and legislatures of both political parties.

“Many conservative critics of our current federal tax system are calling for a ‘flat tax,’ a system that applies the same rate to all taxpayers, no matter how high their income may be,” the Shifting Responsibility report notes. “To a distressing degree, our overall tax system — federal, state and local — has already ‘flattened.’”

Wealth for the Common Good offers these solutions at the federal level to reduce the debt and restore at least some fairness to the tax structure: Sunset the Bush tax cuts as scheduled in 2010, restore a graduated estate tax on inherited wealth, end laws that permit overseas tax havens, tax financial transactions, or restore tax rates on capital gains.

Dane Smith is president of St. Paul-based Growth & Justice, a progressive research organization that focuses on economics and state-and-local budget issues.

By Bill Collins
Pay my share,
But it’s a shame;
Wish the rich,
Would do the same.

Some serious and high-minded rich people calling themselves “Wealth for the Common Good” think they might ought to pay higher taxes. Not only themselves of course, but all upper-income Americans as well. Got bucks? Pony up! As you might expect, this feeling is not rampant among the prosperous set, so it is good for their personal safety that the “Wealthers” cannot be readily identified by hair color, tattoos, or other insignia.

The burr under their saddle is that the rich actually pay a lower percentage of their total income in taxes than do the poor. In my state, Connecticut, this inequity plays out as a 6 percent rate for the richest vs. 12 percent for the working poor. These calculations lump in sales, property, income, excise, service, phone, electric, and all other manner of public levies.

Appropriately then, the heaviest Washington in-fighting just now is the hand-to-hand combat over the humongous tax breaks the rich received during George W. Bush’s presidency. They expire at the end of this year, and include both income and estate taxes.

You won’t be astonished to hear that aside from the “Wealthers,” the fat cats want to keep those breaks. Or that most Democrats want to reclaim that lost revenue for higher purpose. But the rich, while few in number, are many in lobbyists who make colossal campaign contributions. Who knows what will happen?

More subtle is the question of what should be taxed in the first place. The current hoopla in Washington is over adding a few cents in sales tax to soft drinks, a reasonable health as well as revenue proposition because of the empty calories. But what about the heavy stuff — say, stocks and bonds? There’s no tax on them at all, even though we pay plenty for almost every other kind of transaction. A five-tenths of 1 percent levy on the purchase of basic securities, and maybe two-tenths on those yummy credit default swaps, would raise big bucks and hinder our current bent for wild speculation.

As would a similar tax on traffic in foreign currencies. That is one of the most speculative arenas in all investment and can have a thunderously devastating effect on the economies of small nations. Billions are made and lost, but transactions go totally unassessed. Taking a tiny cut for government would dampen world financial game-playing, while boosting both our Treasury and those of the small countries that need help the most.

The Obama administration opposes any such new levies because, like most other world capitals, Washington is deeply influenced by Wall Street and its equivalents around the globe. Bankers and brokers don’t want anyone rocking their boat.

Neither do online retailers, the ones you order from on your computer. They have a fat deal going too by not charging the same tax on their goods that you would have to pay downtown. These tax-free transactions, even when the law says you’re supposed to pay, have helped impoverish states, cities, and Main Street merchants. Again, lobbyists for the big online companies and retailers have deterred Congress from ordering an effective collection and monitoring system.

Corporations play a similar decadent game with their own books. They shuffle profits from high-tax states to low-tax ones, or to ones with no corporate tax at all, or even to other countries. Not long ago The New York Times ran a photo of Ugland House, a palm-fringed office building in the Cayman Islands where 19,000 separate companies are registered in order to avoid taxes back home.

In this season of budgetary trauma, politicians and media are more inclined to focus on which painful service cuts we must regretfully endure. Those that injure the poor are most popular. New taxes, rules, or enforcement aimed at squeezing a fair share out of the rich are less often mentioned. That’s one big reason our country is in such a financial mess.

OtherWords columnist William A. Collins is a former state representative and a former mayor of Norwalk.