The Tax Clock Is Ticking
The clock is ticking. And not just for last-minute
tax filers. The Bush tax cuts are set to expire at the end of the fiscal
And you know what that means. As Congress takes up the FY2011 budget this summer, tea-sipping fiscal hawks will be circling Capitol Hill squawking about the deficit amid a chorus of angry voices screaming for an extension of Bush-era tax cuts that disproportionately benefited that minority of Americans with incomes over $250,000.
What remains to be seen is whether the voices of those who have signed Responsible Wealth's Tax Fairness Pledge will be heard. United for Fair Economy's Responsible Wealth network is a group of 700 millionaires calling on their economic peers (top 5 percent of wealth-earners) to join them in their efforts to put an end to the Bush tax cuts once and for all.
In taking the Pledge, each signer agrees to donate some or all of their tax savings from the Bush tax cuts to support tax fairness organizing and/or other economic justice efforts. An online Tax Break Calculator allows anyone to punch their 2009 income and get an estimate of their individual share of the Bush tax cuts.
Mike Lapham, director of the Responsible Wealth project and one of the millionaire Pledge signers, summarizes the rationale behind the initiative.
"These tax cuts were irresponsible when they were passed in 2001 and 2003. In the midst of a deep recession, they are downright inexcusable," says the paper mill heir.
"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."
Lapham points to a report by Citizens for Tax Justice that shows half of the Bush tax cuts went to the top 5% of income-earners, while the bottom 60% got less than 15% of the Bush tax cuts. That little gift to the rich translates into an estimated $2.5 trillion.
Looking to reverse course, Responsible Wealth members "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," Lapham notes.
"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."
Of course, whenever the case for raising taxes on the wealthy is made, the response -- even from the "liberal" media -- is predictably derisive.
After a telephone press conference last week, Dana Milbank, writing for The Washington Post, offered this straw-man sarcasm:
"Of course, if millionaires really want to pay higher taxes, there's nothing stopping them. The Treasury Department Web site even accepts contributions by credit card to pay the public debt. There's also nothing to stop the millionaires from paying the tax obligations of, say, Washington Post columnists. But then they wouldn't have the satisfaction of giving their tax-cut proceeds to the pro-tax movement."
Thankfully, The Economist rhetorically slapped Milbank upside his head for making such an embarrasing nonsensical argument.
"Taxes are not charity. It would be a bad idea for wealthy people (to) contribute large amounts of money voluntarily to reduce the national debt. The first, less important reason for this is that any individual's contributions would be meaninglessly small;" to say nothing about the "invitation to free-riding" it would create.
"Government spending is collective spending, and the taxes we pay for it are collective taxes. Like it or not, this is collective action, and the arguments we have about it have to be collective as well. It is perfectly legitimate to argue that we should be spending less on various things, or that the kind of taxes being proposed to pay for our spending are unfair or more economically damaging than some other kind of tax. But you have to make that argument at the level of what we should do as a country."
I called Tax Pledge organizer and United for Fair Economy executive director Brian Miller a few days ago to ask him about the prospects for success, given Obama's pledge to let the Bush tax cuts expire.
"Just because Obama says we should do this doesn't mean its going to happen," he told me. "There's going to be a lot of push and pull on this issue in the coming months. We have to figure out a way to, frankly, make the voices of the majority heard over the shrillness of talk radio and the far right."
Majority? Yes, a majority. A new Quinnipiac University poll found that 60 percent of Americans in both major political parties favor raising income taxes on households making over $250,000, calling into question the notion that the tea party crowd speaks for "the people."
The poll results were released in conjunction with a Wealth for the Common Good study that details how tax breaks over the past 50 years have gone mostly to the affluent. The study also notes that by simply allowing the Bush tax cuts to expire it would generate about $450 billion in revenue.
Some will call this class warfare. And they're right, just like Warren Buffet said. "There's class warfare, all right," the celebrated billionaire noted, "but it's my class, the rich class, that's making war, and we're winning."