Tax us more, some rich say
Why some higher-income people say it's their duty to pay more
Tax us more, some rich say
Joseph N. DiStefano
"In a spirit of Thanksgiving," as they put it, more than 400 U.S. business owners and professionals have signed a petition circulated by a Boston group, Wealth for the Common Good, calling on Congress and President Obama "to allow the Bush-era tax cuts for those with taxable incomes over $200,000 (individual) and $250,000 (couple) to expire on Dec. 31," raising "an estimated $700 billion over 10 years" to invest in "education, health, job creation, renewable energy, transportation," you get the picture. More here.
They're not the only ones. "People at the high end - people like myself - should be paying a lot more in taxes," the richest American, Berkshire Hathaway boss Warren Buffett, told ABC News in a program scheduled to air Sunday Nov. 28. The idea that money will "trickle down" from the rich to workers "has not worked the last 10 years, and I hope the American people are catching on."
The Boston group is making the case local. "It's damaging to the economy, both short-term and long-term, to continue the tax cuts for the top income rates," especially for "unearned" investment income, petition signer Joe Magid, owner of Gryphon Systems, a Wynnewood info tech consultant, told me. "Your hedge fund managers, your Wal-Mart family members, they're paying just 15%," while mid-six-figure incomes are charged more than twice as much. "That's sort of insane."
But don't low taxes promote investment and job growth? "Ridiculous," Magid said. "An S corporation like my business, a limited partnership, PricewaterhouseCoopers, any business organized that way, whatever isn't spent to hire people and improve the infrastructure of my company, goes to me, the owner, as personal income that I'm paying a lower tax on. That incents me not to hire people!
"If the marginal tax rate on the $10 millionth dollar of my income is the same as on my first $1 million, I have no incentive to invest in my company! If I had to pay higher taxes it would be easier to decide I should invest more in my company and make more money.
He cited a 2002 article in Harvard Business Review by scholar Mark Buchanan, subtitled "Wealth Distribution and the Role of Networks," that makes the case. In sum: "The bottom line is, if you tax work over investment, you concentrate wealth. Hello! Look what's happened in this country since Reagan's tax cuts." He's for low taxes on venture capital investments, "under $1 million," and "maybe mezzanine financing, several million. But why should the American taxpayer subsidize wealthy people who are going to use the money for offshoring jobs? That's what we're donig."
Signer Steve Weinberg, second-generation owner of National Foundry Products Inc., a Philadelphia manufacturers' rep agency, agrees. "Out of a basic sense of fairness, we have to invest in our future. I want to see our country succeed. If we don't invest, we're not going to succeed.
"In my work, I go around the world. I know what happens in countries where there's no national infrastructure to support hardworking people. India is emerging. They're moving in the right direction because they have invested in their national infrastructure. Meanwhile, we're cutting back. It's a moral decision, and it's a business decision, and it's wrong."
"It's hard to give more. If you send your kids to private schools it's easy to run up expenses. I have empathy. But we have to invest in education, in energy, in R&D. It makes more sense for people who are a little more able to make due to do their part."
Why don't those that want to pay more make a voluntary payment to reduce the public debt instead of wanting to have higher tax rates for all of us 'aspiring billionaires'. It's real easy to be Buffet and say he should pay more income tax. His income is wealth driven which means he can invest in tax free securities if he so chooses. I doubt any significant part of Buffets income is on a W-2. Can't do that so easily getting a paycheck and investing in your own business. I agree though that the 'carried interest' rules that allow hedge fund managers making millions to have what would otherwise be ordinary income taxed at 15% should be eliminated.— Wiseman6- No one is stopping Mr. Buffet or any other gazillionaire from giving their money to the government. Go ahead! The only thing the government has proven itself adept at is destroying jobs, destroying value, and overall inefficiency. Any excess money is better spent by these people by investing in the equity and debt markets, which is what they do with their excess money in the first place. I say lower everyone's taxes and if you want to spend more of your own money on taxes, go ahead - no one is stopping you.— Bud Fox
Raise my taxes but PLEASE KEEP ME SAFE! I'm so afraid of these terrorists. Take away everything I have but KEEP ME SAFE!- don't give money blindly, use seed money to help small businesses get and stay on their feet. there are a million ways just a starting subsidy can assist. everyone is happy, and the giver(loaner) is blessed.— Miss M.
- Well, our tax system could be fairer. It isn't fair to tax investment income at lower rates than wages or self-employment income. But if Warren Buffet and his buddies want to pay more tax, then they can go ahead and pay more. However, I have a better idea for Warren. Instead of giving the government more money to spend, how about making private business loans to CREDIT WORTHY small businesses who aren't able to get bank loans. This WILL help our country's economy.— Falls Ed
I don't think any the writers here have to protest confiscation of their untold hundreds or millions much less their billions. Since it is impossible for everyone to own their own business, and since it is impossible for any business to grow to a $billion stature without employees, it is clear that all of the laws of the UCC and the government policies are a social order that requires input from the entire citizenry to work. For the wealthy to form cartels, and capture the government and its regulatory agencies through bribes is a corruption of a democratically controlled republic that protects private property. It can can only turn out badly for the rich if they do not work with the people who work for them. It is not too much of a stretch of a policy change to have the government just take over the investment function of recapitalizing the entire economy if the rich just want to hold onto their money based on their hallowed principles of greed, power and privilege. We can can print all of the money we need and can invest as needed and do not need the rich if they continue their withdrawal of recapitalizing the economy who made them wealthy and protected them from dispossession by Hitler, Hirohito and the Soviets. Please, get out of America if you hate it so much, your money is in Saudi Arabia and China already, leave like John Dorrance, renounce your citizenship and let Dubai and Shanghai be your new homes. Capital is mobile, patriotism is not for sale.
Comment removed.- The world needs ditch-diggers, too.— Echo
It's amazing that Mr. Magid has managed to stay in business, considering the idiocy of his comments in this story.
First, you hire new employees because you need them, and because you are selling their services for more than you're paying them in salary. Hiring is not just an incremental expense; there's incremental revenue (& profit) to be considered as well.
Second, his comments on marginal tax rates are backwards. By NOT having ever-increasing marginal tax rates, you are able to keep more of your profits as your company grows, which is an incentive to invest in your growing company. The confiscatory marginal rates of up to 90% that were in place a few decades ago (and which the 400 rich guys above appear to want to go back to) definitely were a DIS-incentive to invest, as ever-increasing amounts of your profits were going to the government.- Comment removed.
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Nobody is stopping them from sending all of their wealth to the government.- "History tell us this is not true" Could you give me ONE example of a company that managed to multiply in size without adding employees?
- The rich who want to have their taxes raised should just write checks to the Government. Nobody is stopping them. Why ruin it for the others?— ALJ
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