Millionaires back higher taxes! It sounds like another April Fool’s joke or a story concocted by The Onion, but it’s not. Earlier this year, a group of America’s most wealthy individuals , improbably, called for the elimination of Bush-era tax cuts that benefit the rich. In light of the financial deal just cut between the Obama administration and Congressional Republicans, this remarkable, selfless statement is more intriguing than ever.
Responsible Wealth (RW) is a network of over 700 business leaders and wealthy individuals in the top 5% of wealth and/or income in the US who use their surprising voice to advocate for fair taxes and corporate accountability. The group is part of a larger organization called United For a Fair Economy (UFA), which describes its members as people who are concerned about growing economic inequality and are joining together to publicly address the problem. UFA also has been influential in the battle to maintain the estate tax. The group’s mission statement says:
“As beneficiaries of policies that are tilted in our favor, we feel a responsibility to speak out and change the system to benefit the common good. We believe it is also in our own best interest to do so… As our nation struggles amidst the Great Recession, we can no longer afford tax cuts built on the failed trickle-down philosophies of the past.”
This year is a particularly apt one for the organization, as the Bush tax cuts are set to expire at the end of 2010. Their demise, says Responsible Wealth, is not a foregone conclusion, as many in Congress and in the ranks of the wealthy are working hard to make the tax cuts permanent. Calling the tax cuts a train wreck that has reduced available funding for education, health care, infrastructure and other critical government services, Responsible Wealth is lobbying Congress and President Obama to let the tax cuts expire and restore fiscal sanity to the country.
“These tax cuts were irresponsible when they were passed in 2001 and 2003. In the midst of a deep recession, they are downright inexcusable,” said Mike Lapham, director of the Responsible Wealth project and one of the millionaire members. “To be clear,” he added, “low- and middle-income households only received a small portion of the Bush tax cuts. The overwhelming share of the income, capital gains and dividend cuts went to wealthy taxpayers.”
A report by Citizens for Tax Justice shows that nearly half of the Bush tax cuts went to the top 5% of income-earners, while the bottom 60% of income-earners received less than 15% of the Bush tax cuts. Responsible Wealth seeks to reverse the Bush era-cuts, the total cost of which, it says, will reach $2.5 trillion by the end of 2010.
Among its seemingly counter-intuitive activities, Responsible Wealth has created a Tax Fairness Pledge, in which members estimate their tax savings from the Bush tax cuts, and redirect those savings to support tax fairness efforts at the national and state level. The RW website even offers a confidential, 3-minute Tax Cut Calculator to make this process easy.
Far from an assemblage of kooks and outliers, Responsible Wealth’s membership roster boasts a who’s who of entrepreneurs and financial leaders who have signed the Tax Fairness Pledge, including:
- Jeffrey Hollender, the co-founder of Seventh Generation natural products
- Eric Schoenberg, whose wealth comes from the computer and telecom industries.
- Marnie Thompson, who accepted an inheritance from her father, an Ohio businessman, on the condition that she could give it away to charity.
Why would super-rich people voluntarily give back their tax savings and advocate for repeal of a law that serves their own self-interest? Lapham puts it this way:
“Members of Responsible Wealth recognize that their own prosperity and success would not be possible without the foundation of a strong public education system, an effective transportation network, a strong legal system and more,” he say. “Those are the kinds of foundational building blocks that we get through our tax system. Responsible Wealth members are more than happy to pay their share to support those public investments that they have benefited so greatly from.”
What could be more refreshing and hopeful, in a time when Tea Party rallies get massive publicity for their anti-tax, anti-government sloganeering, than a group of wealthy people who care for the common good and are actually doing something to promote it?
[Originally posted on Occasional Planet, April 15, 2010]