Diverse National Coalition Supports A Strong Estate Tax

For Immediate Release: March 29, 2012

Contacts:

Americans for a Fair Estate Tax Coalition
Urges Congress to Restore Strong Estate Tax 

Washington, DC – Americans for a Fair Estate Tax (AFET), a coalition of dozens of national and state organizations, announced today that it sent a letter to all members of the House and Senate calling on Congress to boost revenue and address growing inequality by supporting the Sensible Estate Tax Act of 2011.

The Sensible Estate Tax Act, H.R. 3467, will restore the estate tax to Clinton-era levels, which will then be indexed to inflation. The bill provides a $1.3 million tax-free exemption ($2.6 million for married couples), with graduated rates up to a maximum marginal rate of 55 percent. This exemption would shield about 99 percent of Americans from the tax and would continue to be adjusted for inflation in the future.

AFET members stated if Congress does not pass the Sensible Estate Tax Act, the best alternative would be to let the current estate tax rules lapse and allow the pre-2001 rules to return in 2013, as scheduled under current law. In this scenario, an individual would be able to pass on $1 million tax-free, and a married couple could pass on up to $2 million tax-free.

Among the 77 organizations signing the letter are groups with national memberships such as YWCA and USAction, philanthropic groups including the National Committee for Responsible Philanthropy, and labor groups, including AFL-CIO, AFSCME, and SEIU.

Lee Farris, Estate Tax Policy Coordinator of United for a Fair Economy and AFET steering committee member, said, “Instead of cutting Social Security, Medicare, and other programs that help low- and middle-income people, our elected leaders in Congress should support the Sensible Estate Tax Act. H.R. 3467 would bring in substantial revenue from those who can best afford it, the estates of millionaires and billionaires, and at the same time reduce economic inequality by restoring our nation’s most effective curb on inherited wealth.”

Katherine McFate, president of OMB Watch, said, "The accumulation of inherited wealth is one source of the historically high levels of inequality that exist in America today." She continued, "The estate tax was put in place to prevent wealth from becoming too concentrated. A vigorous estate tax keeps inequality in check and raises revenue for necessary public investments. The families who have benefited the most from the American economic system should support the public structures that help create opportunity for future generations."

Charles Loveless, AFSCME's Director of Federal Government Affairs, said, “The wealthiest one percent of taxpayers should pay their fair share of taxes. We need a strong estate tax so we don’t have to cut the public investments that create prosperity for everyone.”

The letter also states that:

  • The Congressional Budget Office (CBO) projects that federal estate and gift taxes will generate $516 billion in revenue from 2013 through 2022, assuming that the 2010 estate and gift tax cut expires as scheduled at the end of 2012.
  • Other policy options would be fiscally irresponsible. CBO found that extending the estate tax reduction in effect for 2011 and 2012, which increased the estate tax exemption to $5 million per spouse and reduces the top estate tax rate to 35 percent, would cost $432 billion over the following decade.
  • Existing tax breaks would continue to protect small businesses and farms under either the pre-2001 rules or the Sensible Estate Tax Act. A CBO analysis found that only 0.3 percent of taxable estates were either family held-business estates or estates of farmers and lacked sufficient liquid assets (like cash, stocks, and bonds) to pay the estate tax. That’s why opponents of the estate tax have not been able to find a single farm that had to be sold to pay the tax.

The Sensible Estate Tax Act would also make important reforms that reunify the gift and estate tax exclusions; make permanent the portability of the exemption for spouses; restore the state credit to provide critical revenue for states without increasing taxes; close loopholes in the asset valuation and minority discount rules; among a number of other reforms.

To speak to one of the thousands of people across the U.S. whose families have paid or expect to pay the estate tax and support a return to higher estate tax levels, contact United for a Fair Economy.

The complete text of the AFET letter is available at: www.ombwatch.org/files/budget/EstateTax/AFET_SETA_House_Senate_Letters.pdf

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Americans For a Fair Estate Tax is a coalition of nonprofit organizations and others from around the country, representing a wide cross-section of America, and includes civic, labor, social justice, faith-based, environmental, and human services groups. The coalition is dedicated to preserving the estate tax as a valuable part of the progressive U.S. tax system.

United for a Fair Economy is a national, independent, nonpartisan, 501(c)(3) non-profit organization located in Boston, MA, which advocates for progressive economic and tax policies. More at www.FairEconomy.org.

OMB Watch is a nonprofit research and advocacy organization dedicated to promoting government accountability and effectiveness and increasing citizen engagement. Learn more at www.ombwatch.org.

 

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Conservative Business Icons' "Self-Made" Claims Challenged

FOR IMMEDIATE RELEASE – March 13, 2012

Contact: 
Shannon Moriarty, 617-824-0069, smoriarty@faireconomy.org
Maz Ali, 617-423-2148 x101, mali@faireconomy.org

Conservative Business Icons'
"Self-Made" Claims Challenged

Authors of New Book Debunk Myth of Self-Made Success

Boston, MA: In a new book released this month, United for a Fair Economy and Responsible Wealth urge a more honest national dialogue about what makes wealth and success possible, and in doing so, a healthier debate about the public policy choices before us.

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The Self-Made Myth—And the Truth About How Government Helps Individuals and Businesses Succeed, by United for a Fair Economy executive director Brian Miller and Responsible Wealth project director Mike Lapham, exposes the false claim that business success is solely the result of the heroic effort of a single individual. The authors contend that, among other supports, businesses are built atop public structures and services established and maintained by taxpayers’ collective investments made through government. As such, those who have benefitted the most from those public supports owe something back to the society that made them possible.

“Debunking the self-made myth is critical, particularly during an election year when taxes and the role of government are center-stage,” says Brian Miller. “We wrote this book because how we view wealth creation and individual success shapes our choices on policies, including taxes, regulations, public investments in schools and infrastructure, CEO pay, and more.”

Since the Reagan presidency, those involved in the broader conservative movement have based their anti-tax efforts on the notion that wealth is derived from the superior efforts of “job creators.” This frame fuels an anti-government and anti-tax narrative that the authors say is counter-productive to the kinds of investments we need to make to get our nation’s economy back on track.

“Members of Responsible Wealth, including some of the business owners profiled in our book, understand that there’s a lot more working in their favor than smarts, creativity or hard work,” says Mike Lapham. “They believe they owe a chunk of their good fortune to government investments in education, research, infrastructure and a regulatory system that have created a fertile business environment.”

The co-authors of The Self-Made Myth add that social relations can also provide an economic boost. “We hear these icons of business success—Donald Trump, Ross Perot, and the Koch brothers, for example—tout themselves as ‘self-made,’” said Miller. “But their failure to acknowledge the role of luck, privilege and even government is misleading and dishonest.”

The Self-Made Myth book tour launched last week, fittingly at a public institution of learning, the Boston Public Library. Miller and Lapham will be joined in select cities by individuals profiled in the book. 

United for a Fair Economy (UFE) is a national organization working to close the growing income and wealth divides in the U.S. Responsible Wealth, a project of UFE, is a network of over 700 business leaders, high-wealth and upper-income advocates of progressive tax policies and corporate accountability. Learn more about The Self-Made Myth at www.selfmademyth.org.

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MLK Day Report: Racial Injustice and "The Emerging Majority"

Contact: Maz Ali, mali@faireconomy.org, 617-423-2148 x101 

Download the report: http://www.faireconomy.org/dream
 
Report: As People of Color Become the Majority of the U.S. Population,
Racial Economic Inequalities Likely to Persist
 
United for a Fair Economy Releases MLK Day report, 
State of the Dream 2012: The Emerging Majority 
 
Boston, MA (January 13, 2011): The last thirty years of public policy have not produced significant progress toward Dr. Martin Luther King's dream of racial equality. According to the Census Bureau, people of color will collectively make up the majority of the population in 2042, thirty years from now. If the country continues along the path that it has been on for the last thirty years, the racial economic divide will remain in 2042 and, in many regards, will be considerably worse. This is the core message of United for a Fair Economy’s (UFE) ninth annual MLK Day report, State of the Dream 2012: The Emerging Majority, released today.
 
The report examines trends across a variety of indicators including income, wealth, education, employment, health and incarceration. It finds that when the U.S. becomes a minority-majority country, the racial economic divide will remain disastrously large and will threaten the stability of the entire economy.
 
"The early 1980s marked a turning point in U.S. politics. Reagan sparked a 'me-first' ideological revolution in Washington, D.C. and beyond," says Brian Miller, Executive Director of UFE and a co-author of the report. "The policies since have done little for economic progress for people of color, which should raise great concern as these demographic shifts occur. Without a sea-change in public policy, racial inequality will devastate our economy as people of color become the population majority."
 
In 2010, Blacks and Latinos earned 57 cents to every dollar of White median family income. Persistent wealth inequality continues to entrench the racial economic divide. Near the height of the housing bubble in 2007, White net worth was five times greater than Black net worth and 3.5 times that of Latino net worth. The Black-White income divide will be only slightly reduced by 2042 if we do not change course, while the Latino income and wealth gaps and the Black wealth divide will all expand. 
 
"Income and wealth inequality lend to a host of other social inequalities that keep people of color locked into cycles of hardship and poverty," says Wanjiku Mwangi director of UFE’s Racial Wealth Divide program. "If we do not change course, our economy will not be able to provide for the swelling numbers of Blacks and Latinos out of work, in poverty and in prison."
 
If current trends continue, in 2042, median Black family income will be 61 cents to every dollar of White median family income. Latinos, who account for the majority of population growth, will continue to experience a decline in economic security, earning only 45 cents for every dollar of income earned by the median White family. In addition, Black poverty will be nearly twice as high as White poverty, and poverty among Latinos will be more than 2.5 times greater than that of Whites.
 
The report argues that the racial economic divide is the legacy of centuries of White supremacy practiced as national policy. "As a nation, we honor Martin Luther King Jr. with a holiday, but we tolerate the perpetuation of racial inequality that he dedicated his life to fighting," says co-author Tim Sullivan. "The growing share of the non-White population presents an opportunity for Blacks and Latinos to build political power. In this era of extraordinary economic inequality, the fate of the vast majority of the White population is more connected with the economic interests of Blacks and Latinos than with the ruling political elite."
 
The report proposes policy solutions to significantly reduce the racial divide. Foreclosure relief, federal aid to states and targeted job creation programs are needed to both combat the economic slump and to reduce racial economic disparities. Longer-term strategies including equity initiatives, wealth-building programs, increasing taxes on the rich, strengthening safety net programs, ending the war on drugs, and humane immigration reform are needed in order to substantially reduce racial inequality.
 
"Dr. King noted in the 1960s that Blacks have half the income of whites and are twice as likely to be unemployed," recalls Mwangi. "Sadly, the same words could be used to describe the racial economic disparities that persist today. Closing the racial economic divide is a moral imperative, and should be reflected as such in our public policies."
 
Download the report at http://www.faireconomy.org/dreamCo-authors of the report and partnering racial justice advocates are available for interview. 

United for a Fair Economy is a national, independent, nonpartisan, 501(c)(3) non-profit organization working to raise public awareness of the destructive effects of concentrated wealth and power and supporting the movement for greater economic equality. Learn more at http://www.faireconomy.org.

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Wealthy Taxpayers to Super-Committee: 'Tax Us More'

FOR IMMEDIATE RELEASE – November 15, 2011 

Contact: Maz Ali, 617-423-2148 x101, mali@responsiblewealth.org 

Wealthy Taxpayers Say, 'Tax Us More,' in Open Letter to Super-Committee 

Boston, MA – United for a Fair Economy (UFE) has published an open letter to Congress’ Joint Select Committee on Deficit Reduction, or the “Super-Committee.” The letter was signed by more than 100 members and supporters of UFE’s Responsible Wealth project who are business owners, investors and wealthy individuals in the top 5 percent of the U.S. economy. The letter calls for the majority of deficit reduction to be achieved with higher taxes on the wealthy and corporations. 

The twelve member Super-Committee has been tasked with negotiating a plan by November 23 that will reduce the federal deficit by $1.2 trillion, in addition to the nearly $1 trillion in cuts made in August. 

All of the signers have incomes of more than $200,000 and are willing to pay income tax at a 39.6 percent rate, as outlined in President Obama's proposal to allow the expiration of Bush-era tax cuts for upper-income households. Among the signers are 16 people with incomes in excess of $1 million who support rates of at least 45 percent on themselves. The signers hail from 23 states, including 6 of the 11 states represented by members of the Super-Committee. 

Recent polls show that the majority of Americans, including wealthy people, strongly support higher taxes on the wealthy and corporations. 

The letter includes two additional key principles:

  • At least half of all spending cuts should be made by reducing unnecessary military expenditures.
  • None of the spending cuts should adversely impact beneficiaries of key social programs such as Medicare, Medicaid, Social Security, education and other programs relied upon by low- and middle-income families.

If the Super-Committee fails to negotiate a deal by November 23, $1.2 trillion in automatic cuts – half from defense, half from domestic programs (Social Security and Medicare exempted) – will take effect in January 2013. United for a Fair Economy and the signers of this letter believe that no deal is better than a bad deal. Together, they urge Super-Committee members to reject any proposal that does not meet the above principles. Read the letter at http://www.faireconomy.org/super-committee

The following individuals are available for comment regarding this letter:

  • Arul Menezes, Research Manager and Software Architect, Microsoft Research, WA: “As an upper-income taxpayer whose wealth was entirely earned, rather than inherited, I feel my success was in great part due to the egalitarian and meritocratic society I encountered when I came to the U.S. That society has been all but destroyed by the current tax code. Today, much of my income is from capital gains and dividends. I find it grotesque that these should be taxed lower than income from work.”
  • Phillippe Villers, President of Grainpro Inc., Concord, MA: “I am willing to pay more taxes to save the American economy. As an investor, I make decisions based on the opportunity offered, not the tax rates for wealthy Americans. Cutting Medicare, Medicaid and Social Security will not help to revive our struggling economy. I strongly oppose any compromise in the Super-Committee that does not include new revenues from those who can afford them, like myself, for half or more of this deficit reduction plan.”
  • Jim Wellehan, President of Lamey-Wellehan Shoes, Auburn, ME: “I find it terribly frustrating that other large national and international companies pay little to no taxes. To continue with an unfair tax code is to encourage cheating. We should tax incomes of all types at the same rates, be they from capital gains, rent, dividends, interest or work.”
  • Lee Farris, Federal Tax Policy Coordinator for United for a Fair Economy: “Much of the federal deficit is due to the 2001 Bush tax cuts – which largely went to the wealthy – and to two expensive and unpaid-for wars. The automatic cuts, while still very harsh and unfair to low- and middle-income families, would be better than a deal in the Super-Committee that does not meet the principles outlined in our letter." 

United for a Fair Economy (http://www.faireconomy.org) is a national organization working to close the growing income and wealth divides in the U.S.  Responsible Wealth, a project of United for a Fair Economy, is a network of 700 business leaders, high-wealth and upper-income advocates of progressive tax policies and corporate accountability.

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Note: The content above will be updated as additional supporters sign the letter to the Super-Committee.

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UFE joins in the Launch of the "Contract for the American Dream"

FOR IMMEDIATE RELEASE – August 11, 2011

Contact: Shannon Moriarty, smoriarty@faireconomy.org, (617) 824-0069
 

Post Debt Deal:

United for a Fair Economy Partners with Rebuild the Dream for Launch of New "Contract for the American Dream"
Crowd-sourced Ten Point Plan Is Progressive Vision to Grow and Strengthen the Future Middle Class, Rebut Destructive Conservative Agenda
Boston, MA (August 11, 2011): In the wake of a destructive debt ceiling deal that will cost 1.8 million jobs in 2012 and will worsen economic inequality and the decline of the American middle class, the Rebuild the Dream organization and MoveOn.org – with the support of partner United for a Fair Economy (UFE) – announced a new Contract for the American Dream. The Contract is the progressive economic vision for the American Dream Movement. Members of the American Dream Movement are taking the Contract directly to Congress during the August recess to demand "Jobs Not Cuts," beginning with hundreds of actions around the country on August 10th.

“United for a Fair Economy is proud to join the American Dream Movement as a partner to fight for the ideas and public systems that build a diverse and broad middle class, and decrease economic inequality,” said Lee Farris, Federal Tax Coordinator for UFE. “The Contract for the American Dream’s 10 ideas form a platform that, when enacted, will ensure that all Americans have the opportunity to thrive. One key principle is that our tax system should ensure that people who do well in America do well by America.”

The Contract is a crowd-sourced document, created by people from all walks of life who submitted over 25,000 policy ideas online in July. Over 130,000 Americans participated online and in person at 1,600 house meetings in July, casting 6 million votes on the ideas. The 10 leading ideas form the Contract for the American Dream. A policy fact sheet further explains each of the 10 ideas in the Contract.

Farris is the lead author of the tax policy fact sheet that supports the tax plank of the Contract. United for a Fair Economy has educated and organized for fair and responsible tax policies since its founding in 1995.
The Contract represents a sharp contrast with the destructive anti-government, anti-tax vision represented in the debt debates of recent weeks. The Contract for the American Dream will be used as a guide in influencing the upcoming budget debates in Congress.

Two weeks ago, over 25,000 people allied with the American Dream Movement held 800 rallies across the country to protest the final debt ceiling deal. “The debt ceiling deal sacrificed America’s future middle class to protect tax breaks for today’s millionaires, billionaires and large businesses,” stated Farris. “Tax rates on the rich and corporations are at historic lows, while economic inequality and corporate profits are at historic highs. Millionaires and billion-dollar corporations need to pay their fair share so that we all can prosper.”

The American Dream Movement began earlier this year to fight conservative attacks on the middle class and the poor.  United for a Fair Economy, Rebuild the Dream, MoveOn.org and more than 100 organizations have joined the American Dream Movement to ensure that all Americans have the opportunity to find a decent job, afford to go to college, and provide a secure future for our children and communities.
 
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United for a Fair Economy is a national, independent, nonpartisan, 501(c)(3) non-profit organization located in Boston, MA, which works to rein in economic inequality and promote a more broadly shared prosperity. More at http://www.faireconomy.org.
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Report: Invert State Tax Structures to Eliminate State Budget Deficits

FOR IMMEDIATE RELEASE – May 25, 2011

Contact: Shannon Moriarty, smoriarty@faireconomy.org, (617) 423-2148 ext. 108

 
Report: Invert State Tax Structures To Eliminate State Budget Deficits

United for a Fair Economy Releases Flip It to Fix It: An Immediate, Fair Solution to State Budget Shortfalls, Documents Current Regressive State Tax Structures

Boston, MA (May 25, 2011): A new study has found that inverting state tax structures—whereby the highest income earners would be taxed at the current percentage of income for the lowest income earners, and vice versa—would collectively raise $490 billion in new revenue, immediately eliminating states budget deficits and avoiding the serious consequences of budget cuts.

The report, titled “Flip It to Fix It: An Immediate, Fair Solution to State Budget Shortfalls” was released today by Boston-based United for a Fair Economy and 13 state organizations around the country.

“Flip It to Fix It” attributes a large part of states’ current deficits to the regressive tax structures that the report shows are designed to fail. “Trying to raise adequate revenue through a regressive tax structure—where a greater percent of income is demanded of the poor than the well-off—is like trying to squeeze water from a stone,” said Karen Kraut, coordinator of state tax policy at United for a Fair Economy and co-author of the report.

“The inadequacy of regressive tax structures puts everything we value at risk: the well-being of families, the future competitiveness of the American workforce, and the nation’s ability to rebound from the recession and prosper,” said Kraut.

The report contends that an inverted tax structure not only solves budget crises, but increases equity and best spurs steady and strong economic activity.

“California cannot cut its way out of budget problems and this report shows that the budget is solvable with reasonable and fair tax policy that would generate billions,” stated Sylvia Allegretto, an economist from the Institute for Research on Labor and Employment at the University of California, Berkeley.

The report calls on states to adopt its proposed progressive tax reforms, many of which are immediately achievable and will help solve state deficits.

The full report and state-by-state information is now available at http://http://www.faireconomy.org/flipitreport.

To schedule an interview with the authors of the study and/or representatives from state organizations, please contact Shannon Moriarty at smoriarty@faireconomy.org or (617) 423-2148 ext. 108. Video statements are also available at http://http://www.faireconomy.org/flipitreport.

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United for a Fair Economy is a national, independent, nonpartisan, 501(c)(3) non-profit organization located in Boston, MA, which works to rein in economic inequality and promote a more broadly shared prosperity. The Tax Fairness Organizing Collaborative, a project of UFE, is a network of state grassroots organizations in 24 states educating and organizing for progressive taxes. More at http://www.faireconomy.org.


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Obama Tax Plan a Good Start - Must Go Further

FOR IMMEDIATE RELEASE

Contact:
• Mazher Ali - 617-423-2148 x101, mali@responsiblewealth.org
 
Obama Tax Plan a Good Start – Must Go Further
Says United for a Fair Economy and Wealthy Allies
 
Boston, MA (April 13, 2011) – While President Barack Obama’s recognition of the damage done by Bush-era tax cuts for “every millionaire and billionaire” deserves applause, United for a Fair Economy calls on the President and Congress to show the political courage to enact tax policies that restore sanity and fairness to the tax code.
 
United for a Fair Economy (UFE) and the upper-income and high wealth members of Responsible Wealth are calling on President Obama to lead boldly with a deficit reduction plan that starts with raising taxes on the rich, which includes members of Responsible Wealth.
 
“President Obama’s deficit reduction proposal is a huge improvement over Paul Ryan’s ‘Roadmap to Ruin’,” states Brian Miller, executive director of UFE. “But we’re concerned it may not go far enough. United for a Fair Economy believes we must restore fairness and fiscal responsibility to our tax system by enacting a progressive estate tax, closing corporate tax loopholes, raising taxes on incomes over one million dollars, and ending the tax breaks for income earned from wealth, as outlined in the “ People’s Budget” released by the Congressional Progressive Caucus last week.”
 
UFE’s track record of advocating for responsible tax policies that would equitably generate sufficient revenue to address our nation’s budgetary needs includes:

  • Tax Wealth Like Work: the newly launched campaign of UFE’s Responsible Wealth network, is calling for taxing income earned from capital gains and dividends at the same rate as income earned from work.
  • Restoring progressivity to the income tax: Since 2001, UFE has unequivocally opposed the Bush tax cuts for top earners. In March 2011, UFE joined other national organizations in support of Rep. Jan Schakowsky's Fairness in Taxation Act, which would create new income tax brackets of 45 percent and up for those with incomes in excess of one million dollars.
  • Preserving the federal estate tax: Since the late 1990s, UFE has worked to preserve the estate tax – America’s only tax on inherited wealth. UFE supports the progressive estate tax proposal by Rep. Bernie Sanders.
UFE agrees with President Obama's statement that, “at a time when the tax burden on the wealthy is at its lowest level in half a century, the most fortunate among us can afford to pay a little more. I don't need another tax cut. Warren Buffett doesn't need another tax cut… And I believe that most wealthy Americans would agree with me. They want to give back to the country that's done so much for them. Washington just hasn't asked them to.”
 
“Responsible Wealth members wholly agree with President Obama on this point – the wealthiest Americans need to pay more in taxes,” adds Mike Lapham, director of the Responsible Wealth network of 700 business leaders, high-wealth, and high-income individuals. “We, whose wealth is made possible by the public investments described in the President’s speech, want to give back to the country that’s done so much for us.”
 
Since 1995, UFE and its Responsible Wealth project have worked to close the growing economic divide described in President Obama’s speech today, to change the rules that tilt tax benefits toward the wealthy, to spotlight the role of race in economic inequality, and to serve as a forum where different races, different cultures, and people with varying degrees of wealth can come together to work for economic justice.
 
To arrange interviews with Brian Miller, executive director of UFE; Mike Lapham, director of Responsible Wealth; or members of the Responsible Wealth network who are advocating for higher taxes on their capital gains and dividend income, please contact Sue Dorfman at sdorfman@responsiblewealth.org or Mazher Ali at mali@responsiblewealth.org.
 
 
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Wealthy Citizens Tell Congress: 'Tax Wealth Like Work'

FOR IMMEDIATE RELEASE – April 11, 2011

Contacts:
Mazher Ali, 617-423-2148 x101, mali@responsiblewealth.org 
Sue Dorfman, 617-513-6179, sdorfman@responsiblewealth.org 
 
With Shutdown Averted, Wealthy Citizens Call for Higher Taxes on Themselves as Part of Long-Term Solution:

Urge Return to Higher Tax Rates on Capital Gains and Dividend Income

Boston, MA – Now that the government shutdown has been averted, a surprising group of wealthy taxpayers are stepping up to the plate to be a part of the long-term solution. Today Responsible Wealth and United for a Fair Economy launched the "Tax Wealth Like Work" campaign to focus attention on the discrepancies in the U.S. tax system that reward income from wealth over income from work. Income from capital gains and dividend income – a type of investment income from stocks, real estate, and other holdings – is taxed at a top marginal rate of only 15 percent. Income earned from work, on the other hand, has a top rate of 35 percent.

With Congress and cash-strapped states struggle to balance budgets, high net worth individuals are urging that income from their stocks and investment portfolios be taxed at the same rate as income that others earn from work. Mike Lapham, director of the Responsible Worth network, notes that, “restoring the capital gains and dividend tax rate to the same rate that wages and salaries are taxed would raise $84 billion. That would easily cover the federal budget cuts being hammered out this week, with funds left over to help cash-strapped states.”

Taxing income from wealth at the same rate as income from work is not new and has support from across the political spectrum. Capital gains and dividends were taxed at the same rate as income from work as recently as the late 1980s under Presidents Reagan and Bush. Restoring tax parity between the two types of income was one of the recommendations of the 2010 U.S. Deficit Commission report. The Congressional Progressive Caucus included it in their framework for an emerging “People’s Budget” circulated last week.

 Capital gains and dividend income is heavily concentrated at the top of the income spectrum. A typical household with $58,000 in income receives only 0.5 percent of its income from capital gains. By comparison, the top 0.01 percent of  households, who earn an average of $35 million, typically receive more than 44 percent of their income from capital gains. Adding dividends pushes it well over 50 percent. This distribution of capital gains and dividends, coupled with the much  lower tax rate, upends what would otherwise be a progressive tax system.  

The "Tax Wealth Like Work" campaign provides website visitors with an interactive tax calculator that estimates the tax savings individuals and families receive from the special treatment of capital gains and dividend income, along with their savings from the income tax cuts enacted under President Bush in 2001 and 2003. After calculating their savings, participants are encouraged to take the Tax Fairness Pledge and commit to giving all or a portion of their savings away to groups working to promote greater fairness in our economy, including ending the special treatment of capital gains and dividends.

The website also includes video testimonials plotted on an income graph, ranging from high wealth taxpayers to those on the lowest end of the income spectrum. Pledge signer Eric Schoenberg says that, “I know full well how our tax system is tilted to benefit Americans who live off of accumulated capital rather than labor income. The vast majority of my income comes from my investment portfolio. Last year my income was just over $200,000 and my taxes were only $2,000--a mere one percent! Somebody making that in salary would have paid at least $30,000 more. Equalizing the tax rates paid by rich investors like me and working Americans would be an excellent start.”

Seattle-based Judy Pigott, one of the heirs to her grandfather’s company that builds Peterbilt trucks and other heavy equipment, was one of the first people to sign the Pledge. “If we even kept what was in place from the end of the Reagan years and into those of Bush I, I suspect we’d not be in a budget crisis now. Let’s do what it takes to support all of us, since it takes all of us to keep this nation going.”

Eric and Judy are among the 700 business leaders and people in the top 5 percent of wealth and income who make up the Responsible Wealth network. As part of their efforts to end tax breaks for the rich, they are taking the Tax Fairness Pledge--and are calling for other wealthy Americans to join them--to direct their tax savings to organizations that support tax fairness for all Americans.

The Tax Wealth Like Work campaign will be building support for legislative proposals, including the Fairness in Taxation Act (H.R. 1124), which moves toward ending the special tax break for income earned from wealth. The Fairness in Taxation Act would tax capital gains and dividend income as ordinary income for taxpayers with income over $1 million, and create higher income tax brackets for millionaires and billionaires. If enacted in 2011, the Fairness in Taxation Act would raise more than $78 billion. The campaign will closely follow President Obama’s upcoming budget statement scheduled for this Wednesday, as well as a possible proposal from the Congressional Progressive Caucus later this week.

Brian Miller, executive director of United for a Fair Economy, adds, “Instead of ending expensive tax breaks for the wealthy that undermine our tax system, Rep. Paul Ryan and his allies are trying to balance the budget on the backs of seniors and struggling Americans. It doesn't have to be this way. By ending the preferential treatment of capital gains and dividends, we can avoid these unnecessary cuts while adding fairness to our tax code. We’re glad to be joined by Responsible Wealth members today in a cross-class alliance to end this unfair tax break."

To arrange interviews with the individuals quoted above and other Pledge signers, please contact Mazher Ali or Sue Dorfman at the numbers listed above.

Responsible Wealth, a project of United for a Fair Economy (UFE), is a network of 700 business leaders, high-wealth, and high-income individuals advocating for progressive tax policy and corporate accountability since 1997. Learn more at www.ResponsibleWealth.org. United for a Fair Economy is a national organization at www.FairEconomy.org that works to rein in extreme inequalities and promote a more broadly shared prosperity.
 
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Government Shutdown Will Disproportionately Harm Black Americans

FOR IMMEDIATE RELEASE
 
Contact: Shannon Moriarty, comms@faireconomy.org, 617-824-0069

STATEMENT: Government Shut-Down Will Disproportionately Harm Black Americans
 
Boston, MA (April 8, 2010) – The impending government shutdown will disproportionately harm Black Americans, according to the “State of the Dream” report by United for a Fair Economy. The study—released in January of this year—found that Black Americans are 70 percent more likely to work for the federal government than the general workforce.
 
“A government shutdown will have a devastating impact on Black Americans,” said Mazher Ali, of United for a Fair Economy and co-author of the report. “Countless government workers will not receive their paychecks and millions more will not be able to utilize the public services they rely on to meet basic human needs.”
 
According to the report, the public sector has offered better opportunities for Blacks to advance professionally and to achieve greater economic parity with their White counterparts. This is partially due to higher levels of union representation in the public workforce and other civil service protections.
 
“If Congress fails to prevent a shutdown, the impact will negatively impact all people regardless of race, but Black communities will be hit the hardest,” said Ali.
 
The “State of the Dream” report can be downloaded at http://http://www.faireconomy.org/dream.
 
United for a Fair Economy is a national, independent, nonpartisan, 501(c)(3) non-profit organization located in Boston, MA, which works to rein in extreme inequalities and promote a more broadly shared prosperity. More at http://www.faireconomy.org.
 
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Progressive Caucus Shows 'True Courage' with People's Budget

FOR IMMEDIATE RELEASE
 
Contacts:
Brian Miller, 617-423-2148 x111, bmiller@faireconomy.org
Tim Sullivan, 617-721-8741, tsullivan@faireconomy.org

Group Applauds Congressional Progressive Caucus
for 'True Courage' with People's Budget

Links to New "Tax Wealth Like Work" Campaign

BOSTON, MA (April 8, 2011) – "We applaud the Congressional Progressive Caucus (CPC) for taking real leadership this week," stated Brian Miller, executive director of United for a Fair Economy (UFE). "The CPC's letter outlines a truly courageous budget framework that does what Congress has thus far been unwilling to do – raise taxes on the rich."

"It's hard to imagine what is going through the mind of Rep. Ryan, who seems intent on making working Americans, seniors, and the poor shoulder the burden of today's deficit," said Miller. "This is especially outrageous, considering our budget hardships were caused in large part by tax cuts for the rich and unfunded wars."

Some of the key elements outlined in the Congressional Progressive Caucus letter (pdf) include a progressive estate tax, increasing income taxes on those with incomes over one million a year, and restoring taxes on capital gains and dividend income to the same level as ordinary income. “These are all great steps forward – steps that show true courage."

UFE's Responsible Wealth project is launching a "Tax Wealth Like Work" campaign in the coming days that relates directly to one of the Congressional Progressive Caucus recommendations: Taxing income earned from wealth – capital gains and dividends – at the same rate as income earned from work.

As part of the new "Tax Wealth Like Work" campaign, high-wealth individuals are calculating the tax savings they receive from the reduced rate on capital gains and dividends, and pledging to give all or a portion of that away to groups working to restore fairness to our tax system. Additional elements of the campaign will include an interactive tax calculator, video testimonials from taxpayers at different income levels, and other online resources and educational material.

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