Where are the prophetic voices on the topic of taxation this April 15?
In 2001, President Bush pressed for massive tax cuts including abolishing the federal estate tax, our nation’s only levy on inherited wealth. The highlight of that April 15, eight years ago, was learning that 2,500 multi-millionaires and billionaires had signed a public call to retain the estate tax rather than abolish it. Led by Bill Gates, Sr. and Warren Buffett – what Newsweek dubbed the “billionaire backlash” – they changed the moral conversation about taxing inherited wealth.
Today, the economic crisis has led to state budget cuts that hurt the most vulnerable.
Our government is borrowing money at a furious pace to provide stimulus funds to states to forestall some budget cuts and make long overdue investments in education, health care, and green energy infrastructure.
There is nothing wrong with borrowing during an economic downturn. Unfortunately, we’ve just lived through eight years of “borrow and squander.” The previous administration added over $5 trillion to the national debt to pay for war and give tax cuts to the wealthy and bailouts to Wall Street. The national debt now tops $11 trillion and we’re facing an annual deficit of close to $2 trillion, in part because President Obama refuses to play hide and seek with budget numbers.
We need a plan for how to pay. We should cut obsolete weapons systems and Pentagon cost overruns, as Jim Wallis wrote recently. But how many poor and disabled people will suffer before we can have a moral discussion about taxation?
For three decades, we’ve shifted tax responsibilities off of the wealthy and onto wage earners. A new study that I co-authored, “Reversing the Great Tax Shift,” examines the declining percentage of taxes paid by the wealthiest one percent of taxpayers. Since 1955, the effective tax rate paid by those with incomes over $2 million (in 2006 dollars) has declined by half. If this top earner group today paid at 1955 tax rates, our Treasury would have collected $202 billion more – enough to alleviate the cruelest cuts at the state level and contribute to global poverty efforts. The silence over these trends is troubling.
The good news is an emerging network, Wealth for the Common Good, is collecting input from business leaders and high net worth individuals as to what tax proposals they publicly support. They are enlisting support for a petition to repeal tax breaks for households with incomes over $250,000 – and plan to go public later this spring.
Edgar Bronfman, former chair of the World Jewish Federation, is one of those who has called on President Obama to “Raise My Taxes” and go forth with his campaign promise to raise taxes on those with incomes over $250,000. “For the past eight years, the wealthy have benefited from both the reduced taxes and failure to regulate that made so many fortunes balloon while bringing disaster to our economy,” wrote Bronfman. “The poor and the middle class now are disproportionately suffering the effects. The rich now should pay disproportionately for the corrections that are needed.”
Indeed, over 52 percent of those with incomes over $250,000 voted for President Obama – who made no secret of his intention to rebalance the tax code. Perhaps there is a silent majority among most affluent households that support rolling back the Bush tax cuts of 2001 and 2003. But we could use a few more like Edgar Bronfman to change the stale conversation about taxes. Silence condones the status quo of borrowing and budget cuts.