President Barack Obama speaks on healthcare reform at a New Hampshire high school Tuesday, Aug. 11. Some rich Americans are on board with his plan, even though it means taxing them more.
(Jewel Samad / AFP / Newscom)Photos (1 of 1)
ECONOMIC SCENE: ‘Tax me,’ some rich Americans tell Obama
Petition is one sign that the idealistic wealthy are not a small minority.
By David R. Francis | Staff Writer/ August 11, 2009 edition
Raise my taxes, says millionaire Chuck Collins.
The scion of the Oscar Mayer family supports a House panel’s healthcare plan that would boost taxes for families earning more than $350,000 a year. He also advocates ending the Bush tax cuts for the rich right away, rather than when they expire at the start of 2011, and closing foreign tax havens to Americans.
Although the financial burden would be sizable, Mr. Collins is busy urging other wealthy Americans to sign a tax-me petition.
“The good news is there are still people out there willing to pay for the common good,” says Collins, whose nonprofit Wealth for the Common Good is collecting the names.
As of July 21, some 210 wealthy people had signed. Collins hopes to get more than 1,000 signatures before delivering it to President Obama and House leaders.
The idealist wealthy are “not as small a minority as one might think,” says Eric Schoenberg, an investor and Columbia University Business School professor, who also signed the petition.
It is “reasonable and fair” for “the people who have done best out of the economic system in the last 20 years” to pay in extra taxes the bulk of the cost of healthcare reform, says Mr. Schoenberg. “Healthcare ought to be a basic right of citizenship.”
His research suggests the really rich are more willing than the modestly rich to share their wealth for the common good.
There are other indications of idealism among business people and the well-to-do:
•Responsible Wealth, a nonprofit group that includes several wealthy members, has been advocating for years that the estate tax be retained.
•A group of business owners and leaders called Business for Shared Prosperity welcomed the July 24 rise in the federal minimum wage from $6.55 to $7.25 an hour, although it costs their firms more money.
“It is an unsustainable and dangerous downward spiral to push American workers into
poverty and expect taxpayers to pick up the bill for the consequences,” states Margot Dorfman, CEO of the U.S. Women’s Chamber of Commerce.
But wait! Don’t these taxes on the rich burden the very people who start the most firms and create the most jobs? Statistics suggest the burden is not overwhelming. Households with incomes over $250,000 have saved more than $700 billion from the Bush tax cuts of 2001 and 2003. The proposed graduated surtax under the House Ways and Means Committee’s healthcare plan would take back $544 billion over the next 10 years, providing about half the cost of the entire plan, calculates the Joint Economic Committee of Congress.
What that means is that even after digging deeper to help pay for expensive healthcare reform, the wealthy would still be paying less in taxes than during the Reagan administration – and far less than in President Eisenhower’s time.
In 1955, the top 400 US taxpayers paid 51 percent of their average income of $12.3 million (adjusted to 2006 dollars), according to Sam Pizzigati, a fellow at the Institute for Policy Studies in Washington. In 2006, the most recent data available, the top 400 paid 17.2 percent of their average income of $263 million in federal taxes.
That 17.2 percent rate is also “much lower” than tax rates for the rich in Britain, France, Germany, or Japan, he adds.
Nor, some economists note, did the US economy grow more slowly when taxes on the rich were far higher in the 1950s and 1960s – or grow more swiftly after the Bush tax cuts.
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Comments
2. Matt Valenti | 08.11.09
Mr. Kistler says, “the truth is that those who work for a living find government spending abhorrent.”
I’m guessing that would not include the millions of working Americans whose livelihood depends on government spending. That list would include every single member of the armed forces and all private military contractors — not to mention the folks who build roads, police the streets, put out fires, research cures for diseases, monitor the safety of our food supply, teach children, etc., etc.
A whole lot of the opportunities available to people “who work for a living” would not be available had the government not spent tax dollars to support their industry.
Some wealthy people hate giving money to the government as much as they hate giving money to anyone for any reason. That’s called greed.
But not allw welathy people are greedy, and as this article points out, a sizable portion of those people understand that government spending is not the root of all evil
3. Richard L. Tradewell | 08.11.09
“Tax me” and entitlement mentality has led to a government (federal, state, local) that now takes 40% of the economy, up from 3% over the last one hundred years. In 1955 the government was smaller than it is now. Medicare, Medicaid, S-CHIP plus the explosion in pensions of government workers and hundreds of other outrages have changed all that and made high taxes the worse kind of moral hazard. Health care is a right of citizenship? Please avoid that road to insanity.
Give the government money and it wastes it. Give people free health care and they abuse it. In the process charity and the voluntary sector that made America is destroyed.
That is not even the bad part. None of the programs mentioned above, and you can add Social Security, are sustainable with our new demography no matter how much taxes are increased.
David Francis and the rich are pied-pipers leading Americans over a cliff. It is a long way down. Ask the Soviet Union.
4. Virgil Loveday | 08.11.09
None other than Theodore Roosevelt would have agreed with the ‘tax me’ attitude. In fact he is responsible for the ‘progressive’ income tax in the US where the wealthy pay a higher rate of tax. And I would hardly have called TR a socialist. (He probably would have pummeled me for such a remark).
5. Stephanie in Boston | 08.11.09
If the “more money than sense” want to pay more in taxes, they are free to do so without government mandate. In fact, there are ample ways for those so burdened with extra money that they wish to have the government confiscate it to distribute that money to those they wish to assist. One of them goes by the name of charity by the way. Another example is the voluntary highr income tax rate checkoff found in certain states including Massachusett. Taxation is not the same as “giving”, which is an inherently voluntary act. What these people seem to want is a mandatory, government run “income redistribution” scheme. Moreover, the federal government (or state government for that matter) has NO business whatsoever, interposing itself between American citizens and their individual health choices. As a result, there is no justfication for additional taxes.
6. TaxMeToo | 08.11.09
The (inevitable) backlash against this kind of sentiment is fueled on the one hand by human nature. It is in every individual’s best interest to hang on to as much of their cash as possible. However, this individualistic world-view ignores the vast potential benefits of a little public investment in the common good.
We all acknowledge the need to be taxed in order to provide for a common national defense. Endowed with a plentiful source of steady funds, our military does a fantastic job. Imagine the inefficiencies (and chaos) of having a dozen or more private armies that were contracted by individuals and corporations to provide security on an ad-hoc basis. Thats essentially what we have with our current patchwork of private insurance and health care companies.
In addition to the unfortunate side affects of American rugged individualism, the so-called conservative movement has spread so much disinformation about the affects of taxing the rich that the majority of the public (the middle and lower classes) no longer understand their own best interests. We live in a nation where the wealthiest 1% of the population controls almost 50% of the nation’s wealth. Concentration of wealth is a natural byproduct of free-market capitalism, and is not, in itself, a bad thing. We need to treat these concentrations (rich people) as a resource that can be exploited (but not over-exploited) so that we can make continued investments in the common good.
7. Phillip Van Garrick | 08.11.09
I am a working small business owner, without health insurance because the only insurance I can afford will not pay for the most common injury of the working man, the hernia, of which I’ve had two in the past. I put away the money that would go for insurance if I tusted them to deliver when I need it. I don’t trust them, but the money has paid for my medical visits in the past. Any responsible citizen should be glad to pay taxes, I am, because we all benefit from them in ways that cannot be supported by the psychology of pure capitalism.
I used to be an Ayn Rand reader, and sympathetic with the very conservative Objectivist point of view, but life has shown is that greedy human nature makes pure capitalism unworkable, just as it makes pure communism unworkable. People generally only understand working in their own best short term interests.
I don’t understand why anyone would want to live in a world where innocent children are allowed to suffer needless pain just because they were born to poor parents. Or where we are all reduced to statistics based on our monetary worth and spending habits. Those against healthcare reform are being duped by the greedy insurance industry that wants to continue to take money from all of us, and give back nothing even when it is a matter of someone’s life or death.
If you really want to know what is going on the healthcare industry, Google Bill Moyers, visit his website. He is a former Baptist Minister turned journalist, and in my opinion, is at the top of the pack of honest and comprehensive journalists, and is not on the take. Find out what is really going on.
Would you really rather pay your money to insurance people whose prime motivation is profiteering on the backs of sick people, and bankrupts them, or pay a realistic but relatively small tax so that no American has to worry about what will happen to them and their family if they get in a bad accident, or get very very sick?
I’m not a bible thumper, but If there is a God and a Heaven (and hell), I think Jesus got it right when he said it is easier for a camel to go through the eye of a needle than for a rich man to get to heaven. Those of you who begrudge the poor having health care are indeed poor in spirit.
8. Mark Stone | 08.11.09
The fact that the rich only pay 17.2% of their income in taxes is shameful; it’s no surprise that
The above posters are misguided - the purpose of government is not simply or mainly to help the needy, but to provide for the common good - be it parks, infrastructure, education (no, education isn’t jsut for the poor), defense, or health care (yes, like education, it is a common good). In a capitalist society, government plays the role of providing those goods the market does not - and provides a democratic framework in which to provide it.
A shared public-private health care plan seems a good example of this. Let’s not forget that decades ago Madicare was also attacked as a socialist policy that would drag America down - yet today Republicans are among Medicare spending’s staunchest defenders. Yet middle-class families still facee concerns about medical bankruptcy, losing their employer-sponsored insruance, or becoming “unisurable” - it is not pretty when it happens. Is this the way to treat ourselves?
We have become a society where almost half of households pay no income tax - and some still grumble about the government while at the same time demanding free roads and home mortgage tax subsidies! In this environment, it is good to see many of the wealthy are still willing to pay for the common good. But I do agree we should not adopt the view that the rich can pay for everything. We should realize democracy comes with rights AND responsibilities.
We cannot simply keep passing on deficits to our children because we are “anti-tax.”
10. dj | 08.12.09
You don’t mind giving money to the “needy” as long as they remain “needy” and don’t compete with you. Also, speaking as someone who “works for a living”, I say “Tax Me” and build a resource that will be available to me when I’m too old to work. (Hopefully before.)
11. Jules Mopper | 08.12.09
Mr Kistler:
I work for a living and what I find abhorrent is that we don’t have health care for a huge number of responsible, hard-working citizens.
I am also a capitalist, but am educated enough to understand that a higher tax rate on the rich is by no means “socialism”.
You should also know that we spend almost twice as much per capita on healthcare - that includes the uninsured - than any other industrialized nation, and have no better health outcome. Yes, we are wasting 8% of our GDP.
Our healthcare system is a scam in which we are fleeced by those we trust the most, our health providers. It makes us poorer, insecure and our nation the laughingstock of the rest of the world.
I applaud the ethically superior wealthy individuals Mr. Francis profiled, not only for their generosity but also for how they humanize their class during these polarized times, and scorn the greedy and ill-informed commenters who are complicit in redefining any policy that doesn’t benefit only the well-off as “socialism.”
Sincerely,
Jules Mopper
PS I find it disturbing that the Monitor’s moderators allowed the second comment above to be published.
12. Matt | 08.12.09
If people wants to GIVE their money away, that’s fine. But, don’t FORCE others to hand over theirs. That’s just morally wrong. Anybody remember the commandment, “Thou shalt not steal”? Taxing income is a form theft because people have no choice in the matter. The Fair Tax would resolve so many of these problems and would help the poor the most. If you haven’t researched it, I urge you to do so and then contact your representatives and senators (http://tinyurl.com/a9rntz).
13. Doug Lawrence | 08.12.09
“A progressive income tax is by no means socialism” - Yes it is, it is specifically called out as one of the 10 requirements for revoloution by Carl Marx. Public education and the banning of child labor also are on the list, so it is not neccesarily an evil, but we should argue the facts.
“The fact that the rich only pay 17.2% of their income in taxes is shameful” And it is mostly irrelevant. The super rich don’t pay income taxes, they pay capital gains taxes. Thats why Warren Buffett was able to say “I pay less income tax than my scretary” during the campaign. They also effectively dodge the payroll tax, which crushes the average guys earnings behind the scenes. This comment section breaks down into the same tired left / right debate. The left is offended by the outlandish consumption of the rich, and the right is offended by a government that penalizes hard work and success. I encourage all of you to please take a look at the Fair Tax. It is progressive, because it taxes consumtion. This means that not only does the “Old money” start paying taxes, so does the drug dealer, and the illegal imigrant. Meanwhile it does not penalize saving, investment, or other capitalist activity that is good for our country.
14. Marvin Peters | 08.12.09
I commend those who support their paying more taxes. I do not commend those who would promote legislation to increase the tax burden on their peers or anyone else for that matter.
It would also be prudent to assume that government estimates of the cost of proposed health care programs be taken with a grain of salt, therefore, diminishing the potential of simply taxing — voluntarily or not — the rich to cover the costs. It would more in line with how government usually underestimates costs to assume that most Americans will be paying more in taxes to support festering spending programs for health care and a smorgasbord of other entitlements.
15. Rene | 08.12.09
I guess I figure if I’m “forced” to pay for a war I did not support, it’s perfectly fair to “force” the people who supported the war to pay for a health plan that I do support. And, as an added benefit, the health care plan might actually save a few lives, instead of kill people.
As for whether or not a tax is theft–well you don’t have to live in the U.S. if you don’t want to. No one is forcing you to stay. You can leave any time you want, no questions asked. You might even find a country that doesn’t tax your income. Good luck with that.
16. Gladys Batan | 08.12.09
This is wonderful. Thank you for having the courage to print this article.
“Command those who are rich in this present world not to be arrogant nor to put their hope in wealth, which is so uncertain, but to put their hope in God, who richly provides us with everything for our enjoyment. Command them to do good, to be rich in good deeds, and to be generous and willing to share. In this way they will lay up treasure for themselves as a firm foundation for the coming age, so that they may take hold of the life that is truly life.”
1 Timothy 6:17-19 (NIV)
Sincerely, Gladys V. Batan
17. Lara | 08.12.09
I love the way they splash the word “save” around in this article as though we went out and bought something and saved money. Wake up people! I make more than 350k and believe me I pay much more then 17.2% of my income in taxes. As a matter of fact, I pay approximately 45% of my income in taxes(Federal, State (Hawaii 11%),Social Security and Medicare combined).
I believe a majority of people earning 350K-1 million pay around the same if not more then myself.
How would you like to pay $100 dollars for the same thing that someone else has only paid $55.
I don’t mind paying taxes but I think there is a lot of waste in the system and undeserving people receiving the benefits of my tax dollar.
18. Robert Henning | 08.12.09
America’s problems cannot be solved by an additional tax burden on the working middle class. The very wealthy have panels of advisors that tell them how to circumvent and how to exploit and find new loopholes, there are always loopholes reserved for the wealthy because they know better. The middle class will pay all tax increases, it has always been that way, it will always be that way. Mr. Obama’s attempt to close tax heavens and loopholes is a mirage, political discourse for better approval ratings. Let’s stop being naive, we know better…
19. Stephen Hamilton Wright | 08.12.09
Remember our Western civ, history, and social studies lessons about “noblesse oblige?” Not socialists, but monarchs and oligarchs as well as their political and philosophical opponents–in fact, people from nearly every political and economic persuasion in nearly every culture–have long recognized the obligation of those at the top of society to contribute more to the system that has favored them so much, and without whose lower classes they would not enjoy such good fortune. Maybe it’s a recognition that “trickle down economics” has two aspects–the imaginary one that doesn’t raise leaky boats as much as its proponents usually contend, and a realistic one, such as Mr. Collins suggests. Good to see such forward thinking at the top of the economic heap.
20. James Corbin | 08.12.09
Even taxing the rich at 100% will not be enough to fund socialistic government healthcare. As always, the costs are minimized to sell the plan and then the true cost will only come out afterwards. Rationing of care is a given, as it is in all government run programs. The old and the very ill are at the highest risk. Innovation in medicine will essentially end. When was the last time you read of a medical breakthrough in Canada or Great Britain or any other country with socialistic medicine? Profit is what drives innovation in any business and when the reward is reduced or eliminated, so is the willingness to take the risks which result in new products or services.
I watched a good friend of mine essentially killed off in the VA government run system. It was all done so carefully that if you didn’t know what was going on it would be very easy to miss. He was shuttled to two other contract hospitals during his illness, despite his deteriorating condition. He only went in for a gall bladder removal, ended up with an infection (imagine that), and died as a result of “the system” that couldn’t be bothered with him.
21. LVTfan | 08.13.09
The federal income tax is a very blunt instrument, and we’re relying on a very poor tool for gathering our revenue.
We’d be much better off if we concentrated our taxation on such things as natural resources and land value. Our current accounting systems fail to value these things, and our structures permit individuals and corporations to privatize these rightly-common values.
We’re barking up the wrong tree when we tax wages, even high ones. Rather, we ought to be looking at the fundamentals. We’re permitting the FIRE sector and the energy sector to privatize value which the entire country and nature create, and then to funnel that value to their managers and shareholders.
Until we recognize the mechanism, we can’t fix it, and all we can apply are blunt tools.
Get precise!
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1. John S. Kistler | 08.11.09
When I was a subscriber of the print Monitor, on two occasions through the years I cancelled my subscription because the views of Mr. David Francis were so socialist in nature that the joy of reading the paper was ruined for me. Because of his socialist inclination, I was not surprised to see his name on the pitiful discourse on “Tax Me.” That there will always be those with the mistaken notion that the safest place for thier money is in the government, the truth is that those of us who work for a living find government spending abhorrent. We realize that the taxes WILL rise for the middle and lower-middle classes because that’s where the large amount of resources are held. The very are not rich enough to support this level of spending. We will all pay dearly, and we will pay more of our discretionary income than the very rich.