INTERVIEW: Tax Rate on Money Made from Money Must Be Higher

UFE's Mazher Ali shares news of Responsible Wealth's "Tax Wealth Like Work" campaign on Workers Independent News' Labor Radio, emphasizing progressive tax policy as a common sense measure to help avoid slash and burn budget measures that exacerbate the economic crisis and hurt the most vulnerable citizens. Taxing investment income the same as wages and salaries would raise more than $80 billion annually.

Click here to download the interview.

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INTERVIEW: Tax Justice Activism for 2011

UFE's Federal Tax Policy Coordinator, Lee Farris, joined Linda Pinkow, host of "What's Left," to spread word about ways people can get involved in the fight for federal tax and budget justice.

Click here to download the interview (forward to 19:15 to hear from UFE's Lee Farris).

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Sorry Sen. Hatch... Taxes Are Not Charity

Senator Orin Hatch (R-UT) just doesn’t get it – taxes are not charity. His idea that rich people who recognize that their taxes must go up should "write a check to the IRS” is just plain nonsense… nonsense that we’ve heard before.

Eric Shoenberg, a member of our Responsible Wealth project, was quoted in an AP article this weekend. As a high-income American benefitting from the preferential treatment of income from wealth, Schoenberg recognizes that his taxes are absurdly low. Schoenberg, as part of the Tax Wealth Like Work campaign, called for Congress to raise his taxes and that of other high-wealth Americans to restore fairness to our tax system and avert damaging budget cuts. Senator Hatch was quoted in the same article with a much dumber idea:

Sen. Orrin Hatch of Utah, the top Republican on the Senate Finance Committee, said he has a solution for rich people who want to pay more in taxes: Write a check to the IRS. There's nothing stopping you.

"There's still time before the filing deadline for them to give Uncle Sam some more money," Hatch said.

Schoenberg said Hatch's suggestion misses the point.

"This voluntary idea clearly represents a mindset that basically pretends there's no such things as collective goods that we produce," Schoenberg said. "Are you going to let people volunteer to build the road system? Are you going to let them volunteer to pay for education?"

Schoenberg’s response hit the nail right on the head. But this isn’t the first time we’ve heard this argument. It came up last year when our 2010 Tax Fairness Pledge garnered national attention. Back then, after columnist Dana Milbank of the Washington Post made a comment to the same effect, The Economist fired back with a great rebuttal.

…Here's the thing: taxes are not charity. It would be a bad idea for wealthy people who feel they should be paying more taxes to instead 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; they can make far more difference by using the same amount of money to advocate for higher taxes, as these millionaires are doing. But the second, more important reason is that even if a million millionaires got together and voluntarily donated money in such quantities that it made a measurable dent in the deficit, it would be even worse, because they would be giving license to other people to continue pay less than their fair share of taxes. It's an invitation to free-riding, with the public-minded rich subsidizing the irresponsible and selfish.

…even if America had a balanced budget, this kind of argument would be illegitimate. At a pragmatic level, you can't run government functions on voluntary donations because voluntary donations aren't sustainable. You can't count on them. …strong modern states need to be able to tax their populations to pay for public goods.

At a more principled level, this kind of argument is asocial and irresponsible. It's the argument of a free-rider. …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…

Click here to read the full response to this argument from The Economist. Now, if only we could get Sen. Hatch to read it.

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Sunday's AP News Story & Responsible Wealth

If you read Sunday's Associated Press (AP) story, "Super rich see federal taxes drop dramatically," you may be left with the false impression that United for a Fair Economy (UFE) is a network of wealthy individuals who support higher taxes on themselves. Well, that's close, but not exactly right. UFE is a cross-class organization with supporters of all financial means who understand that concentrated wealth and power undermine the economy, corrupt democracy, deepen the racial divide, and tear communities apart. We have several program areas where we seek to advance progressive policies and support movements for long-term change.

The AP story was referencing a member of UFE's Responsible Wealth project. Responsible Wealth is a network of 700 business leaders, high-wealth, and high-income individuals who understand that inequality is bad for everyone, including themselves. Through the Responsible Wealth project, high-wealth individuals work to reign in CEO pay through shareholder activism, advocate for progressive tax policies at a national level, and work in cross-class alliances with state groups working to advance progressive policies at a state level.

In addition to the Responsible Wealth network, other projects of UFE include our Popular Economics Education initiative that provides tools for grassroots groups seeking to better understand the forces behind economic inequality, the Racial Wealth Divide project that explores the intersections of race and economic inequality, the Tax Fairness Organizing Collaborative supporting 28 state groups working on progressive tax policies at a state level, and our federal tax advocacy deeply engaged in preserving a strong estate tax, rolling back the Bush tax cuts for top income-earners, and ending the special tax breaks for income earned from wealth.

If this sounds good to you:

Note: The later versions of this Associated Press story included a corrected reference to both the Responsible Wealth project and UFE.

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New Website! • Obama A Psychic? • We Need Your Support!

It's the week before tax day, and there's been a storm of activity at UFE.

We launched a shiny new website—which you may have already gathered—with interactive features like user comments and social media buttons for ease of sharing. When you're done here, be sure to click around, let us know your thoughts and keep your online networks posted on what articles you liked (or didn't) on our new site.

And, we jump-started our 2011 Responsible Wealth Tax Fairness Pledge. This year's slogan: 'TAX WEALTH LIKE WORK!'

Why? Because money made from money should be taxed at the same rates as hard-earned wages. Taxing capital gains and dividends like work income would largely impact the wealthiest households, raising $84 billion to help keep schools, health care and other community services going.

It's easy to get involved. Your pledged support enables groups like UFE and our grassroots Tax Fairness Organizing Collaborative members to do the work it takes to achieve progressive tax victories.

During his April 13 budget speech, President Obama showed off his political clairvoyance:

[W]ithout even looking at a poll, my finely honed political instincts tell me that almost nobody believes they should be paying higher taxes.

My first thought was that the President was having a psychic off day. Then it occurred to me that "almost nobody" could just be a passive way of calling out the very few, but very rich, corporatist elites—like the Koch Brothers—who throw their political weight around in the name of making more money. A 2010 Quinnipiac poll showed that of those earning more than $250,000 annually, 64 percent supported higher taxes on themselves, and 67 percent supported higher taxes on those with $1 million-plus incomes.

Do you think - raising income taxes on households making more than $250,000 should or should not be a main part of any government approach to the deficit?

Quinnipiac Poll - question 49

Do you think - raising income taxes on households making more than 1 million dollars should or should not be a main part of any government approach to the deficit?

Quinnipiac Poll - question 50

It's truly frightening to imagine the kind of power we're up against; when the overwhelming majority of voters—including many wealthy ones (like Responsible Wealth members)—agree that we should raise taxes on the wealthy for the greater good, but we still have to fight tooth and nail to make it happen.

And fight we will, because our families and communities are at stake. We hope you'll join us in the fight for tax fairness by taking the Tax Fairness Pledge today.

While you're there, check out testimonials from other taxpayers at different income levels. We're still collecting testimonials, so if you're interested in being a part of this project, send an email to UFE's Communications Team at comms@faireconomy.org, and they'll send you a brief guide.

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INTERVIEW: Do Tax Breaks for the Rich Help the Economy?

Responsible Wealth Director Mike Lapham joined Julie Dougherty and Ken Morgan, hosts of Money Radio's "Business for Breakfast" (Phoenix, AZ), to explain the failure of tax breaks for the wealthy, and to urge Arizonans to join RW's "Tax Wealth Like Work" campaign to tax investment income like wages.

Click here to download the interview.

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Take a Stand for Tax Fairness!

Tax Day is on Monday, April 18th! After you file your paperwork, take a stand for tax fairness! Amid the slew of recent and proposed budget cuts to programs that matter deeply to working and middle class families, we must reinforce the point that more revenue can prevent program cuts and reduce the deficit.  

Below is an 'activist's digest' of sorts which includes many notable events and resources related to Tax Day 2011!

TAKE ACTION! Demonstrate, Call Congress, or Sign Petitions

  • United for a Fair Economy and Responsible Wealth: Tax Work Like Wealth Campaign
    We are calling on Congress to tax capital gains and dividends at the same rate as income from work instead of the current rate of 15 percent. Sign on to our compaign, calculate your tax cut, donate your tax savings, or just watch the taxpayer testimonials. (You can even submit your own movie!) UFE is also asking people to call Congress to support Rep. Jan Schakowsky's Fairness in Taxation Act, HR 1124, which taxes millionaires' capital gains at the same rate as income from work, and adds higher income tax rates for millionaires and billionaires.
  • US Uncut Demonstrations: April 15-18th
    US Uncut protests corporations like Verizon and FedEx which have dodged all or most of their U.S. income taxes at a time when lawmakers are cutting basic public services to address federal and state budget gaps. Many of these demonstrations will have a creative or fun aspect. Find US Uncut events near you. 
  • U.S. PIRG Events at Post Offices: April 15th & 18th
    The U.S. Public Interest Research Group acitivities will be holding events outside of Post Offices on April 15 and April 18 in at least a dozen states. These events will target people whose minds are very much on taxes as they mail off their federal income tax returns.  US PIRG will try to get Congress to address tax dodging corporations with report releases and post-carding.
  • MoveOn Events: April 18th
    "On Tax Day, April 18, as millions of Americans patriotically pay their taxes, we will call on corporations and millionaires to pay their fair share. At hundreds of events from coast to coast, we’ll present tax bills to corporate tax dodgers for the billions of dollars their legions of lobbyists helped them avoid. We’ll organize a peaceful, dignified, and powerful day of action to call on corporations to pay their fair share. And we’ll demand that our elected leaders make them pay." (Their events appear to include the US Uncut events.) Find MoveOn events near you.

TAX DAY RESOURCES

Please share this information widely with family and friends, send it to groups you are part of, and promote it via social media.

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Pushing Obama from the Left

Mike Lillis writes in The Hill about the challenge President Obama faces as he attempts to play to the center while appeasing ever-rowdier and more extremist Republicans. As he gets ready to unveil his deficit reduction proposal, he risks alienating his base, who if uninspired, may not contribute to his re-election campaign and even stay home in November 2012.

While early reports indicate that Obama may include some good things in his proposal, such as ending some of the tax breaks for the wealthy and reducing military spending as part of his deficit reduction plan, other questions still remain. How strong will those proposals be? And will he include deep Medicare and Medicaid cuts?

...As Obama prepares Wednesday to outline his deficit reduction strategy, liberals worry he’ll embrace Medicare and Medicaid cuts as an olive branch to Republicans in advance of larger fights over the nation’s debt...

..Liberal lawmakers already were irked with Obama’s decision to support upper-income tax cuts he campaigned against and to launch military operations in the Middle East without congressional approval.

Rep. Peter DeFazio (D-Ore.) this week said Obama should start acting like a Democrat, while two left-wing grassroots groups warned their members could withhold funds from the president’s reelection campaign... The criticisms highlight the problem facing Obama, who is trying to lead from the center without alienating his political base. The White House strategy could help the president with independents, but risks leaving liberals at home in the fall of 2012.

In addition to harsh criticisms coming from the Congressional Black Caucus (CBC), the Congressional Progressive Caucus (CPC) released it's own budget, "The People's Budget," to place a flag in the ground to the Left of Obama's centrist position.

The People's Budget includes smart tax proposals: enacting a progressive estate tax, closing corporate tax loopholes, enacting a new set of income tax rates for incomes over a million dollars, and taxing capital gains the same as ordinary income. The plan also includes rolling back military spending and focusing limited federal dollars on job creation programs here at home and upgrading our nation's aging infrastructure.

In addition to the new and stronger push-back coming from progressive in Congress, including the CBC and the CPC, outside organizing is underway to hold Obama accountable to his political base before it's too late.

But the real question is, how hard will progressives push Obama from the Left? Are we willing to push as hard from the Left on Obama as the Tea Party and freshman Republicans are pushing on Rep. Boehner from the Right? In the end, as FDR said after his election and President Obama himself paraphrased, we must "make [him] do it."

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It's Time to Tax Wealth Like Work

When it comes to taxes, not all income is created—or taxed—equal. Despite the time-honored value of rewarding hard work, our tax code gives preferential treatment to income derived from pre-existing wealth instead of income earned from work. 

Take the Tax Fairness Pledge now!

Here are other things you can do:

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INTERVIEW: Income Inequality & Social Justice in America

In the US, the gap is widening fast between fewer and fewer rich people and everyone else. Do Americans care? 

Columbia professor and Responsible Wealth member Eric Schoenberg joined Warren Olney, host of KCRW Los Angeles' "To the Point," for a conversation about why wealthy and upper-income members of Responsible Wealth support raising taxes on themselves.

Other guests include:

  • Mark Bittman: New York Times 
  • Michael Norton: Harvard Business School 
  • Jason Rink: Foundation for a Free Society 
  • Tom Donlan: Barron's National Business and Financial Weekly 

Download the interview (forward to 18:44 to hear from RW member Eric Schoenberg)

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Proposals to Tax Wealth Like Work

Our current tax system rewards wealth over work by taxing capital gains and dividend income at a much lower rate than salaries and wages. UFE is calling for the restoration of the tax rates on capital gains and dividends to the same rate applied to income earned from work. Various proposals have been put forth to move in that direction.

1. President Obama's proposal to roll back the Bush income tax cuts for the wealthiest households. His proposal would restore the top income tax rates and the capital gains rate to their pre-Bush levels for those earning over $250,000. If the Obama plan were law, the top rate on regular income would be returned to 39.6 percent, while the top rates for dividends and capital gains would be 20 percent. This is a step in the right direction, but it only partially restores capital gains and dividends to the same tax rate as wages. First, capital gains and dividend income below the $250,000 threshold would still be taxed at a rate much lower than income earned from work. For income over that threshold, capital gains and dividends would still be taxed at nearly half the rate on income from work (20 percent vs. 39.6 percent).

2. Rep. Jan Schakowsky's Fairness in Taxation Act (H.R. 1124). This bill would create a new set of income tax brackets of 45% through 49 percent for income in excess of $1 million. The top rate of 49 percent would apply only to the very exclusive group of Americans with income over $1 billion a year. Capital gains and dividend income under the $1 million threshold would still benefit from the preferential rate, but similar income over that threshold would be taxed at full parity with wage and salary income. The Fairness in Taxation Act, including both the income tax rates and the capital gains and dividend rates, would raise $78 billion.

3. The Congressional Progressive Caucus' “People’s Budget.” This plan includes, among other provisions, taxing capital gains and dividends as ordinary income. The bipartisan Deficit Commission included the exact same measure in its December 2010 recommendations.

Learn more:

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VIDEO: What is a Loophole?

What is a loophole? Can you hold one? And if you remove them from state budgets, what could we we actually pay for? Here's a radically moderate perspective on loopholes via video, courtesy of the Washington Bus, an organization that empowers young people through hands-on democracy.

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