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.”