Wealthy give away capital gains tax break to challenge Taxpayer Relief Act

FOR IMMEDIATE RELEASE
April 8, 1998 (original)
April 17, 1998 (updataed)
Contact: Betsy Leondar-Wright, 617-423-2148 x13

Over a million dollars pledged to date

Wealthy investors give away capital gains tax break to challenge unfairness of 1997 Taxpayer Relief Act

As April 15 approaches, most Americans are looking for a tax break. But over 110 wealthy people have taken a Tax Break Pledge to give away their capital gains tax cut.

Over $1,000,000 has been pledged so far by the 58 pledgers who have completed their tax forms and calculated their exact tax cut amounts. The number of investors taking the Tax Break Pledge is growing every day.

Responsible Wealth organized the Tax Break Pledge to publicly protest the unfairness of the 1997 Tax Relief Act, which reduced the tax rate on long-term capital gains from 28% to 20%, while giving little or nothing to most Americans.

  • The capital gains tax cut will add up to an estimated $87 billion over 5 years, according to Citizens for Tax Justice.
  • 81% of this give-back will go to the richest 5% of Americans.
  • Less than 2% of the capital gains tax cut will benefit the bottom 60%.
  • In its first year, this tax cut will give the wealthiest one percent of families an average tax cut of $7,680 each. In contrast, the lowest-income fifth of Americans will get no benefit. The bottom 60% will average $6 each.

Responsible Wealth Tax Break Pledgers calculate their taxes under the 1996 and 1997 rules and give most or all of the difference away. Many are donating it to charities, mostly groups advocating fairer economic policies. A few are returning the money to the US Treasury.

Responsible Wealth, founded in 1997, is a growing network of over 225 business leaders, investors, and other affluent Americans who challenge the policies which let them keep winning at others' expense. They are concerned about the damaging effects of growing inequality on our society and our democracy.

Responsible Wealth is a project of United for a Fair Economy, a national organization founded in 1994 to focus public attention and action on economic inequality in the United States.

Following are profiles of several Responsible Wealth Tax Break Pledgers who are available for interviews, with their quotes on why they have taken this unusual stand.

Responsible Wealth Tax Break Pledgers Available for Interviews

Interviews with these and other Tax Break Pledgers can be arranged through Betsy Leondar-Wright at United for a Fair Economy, 617-423-2148 x13.

Allen Andersson

"My initial investment of $1,500 in Lightspeed International is now worth about $13 million. Like most taxpayers, I would love to reduce my taxes. But as a citizen, I'm outraged that people who are working hard every day for their money are paying higher tax rates than me. That doesn't seem right."

  • Co-Founder of Interleaf, a word processing software company.
  • Co-Founder of Lightspeed International, sold to CISCO in March 1998.
  • Pledged his anticipated 1998 capital gains tax cut of $152,000.

Frank Butler

"As a former CEO, I see the growing gap between big investors and average workers as a destructive trend for business and for our society as a whole."

  • Former President of Eastman Gelatine Corporation (a subsidiary of Eastman Kodak).
  • Past President and current board member of Ministry of Money, which deals with money issues from a biblical perspective; past Chairman of the Board of Faith at Work.
  • Pledged his 1997 tax cut of $2,000.

Michele McGeoy

"If I'm earning money by watching my stocks grow, and someone else is working hard as a teacher, why should I pay a lower tax rate than her? I would be ashamed to take this hand-out."

  • Created a software company in San Francisco, California; sold it in 1993.
  • Founder of a non-profit that provides technology and training to high-school students.
  • Will give her estimated $1,300 tax break to the Fund for Tax Fairness.
  • Interviewed on CBS This Morning on 4/1/98 about the Tax Break Pledge.

George Pillsbury

"The growing domination of our political system by big corporate and individual donors is eroding our sense of democracy and our sense of community."

  • Great grandson of the founder of The Pillsbury Company.
  • Director of Massachusetts Money and Politics Project, a project of the Commonwealth Coalition, based in Boston.
  • Founded the Boston-based Haymarket People's Fund in 1974; in 1979, founded the Funding Exchange, an umbrella organization of 15 social change community funds from around the country.
  • Will donate his $2,000 capital gains tax cut to non-profits working to reduce the effects of big money on the political system.

Charles Demeré

"As I look at the 1997 Tax Act, I see legislation that favors the rich. Even though I benefit from it, I recognize the unfairness of such a regressive tax change as the reduction on capital gains tax. Tax changes should benefit the poor, not the rich, in order to have a more equitable society."

  • Semi-retired Episcopal priest and investor, now living in Maryland.
  • Georgia native; worked with Georgia Council on Human Relations on civil rights.
  • Will give the estimated $5,000 he saved from the 1997 Tax Act to the Fund for Tax Fairness.

Barbara Overby

"At a time of growing economic inequality, budget cuts in public services, high taxes for the working poor and middle class, and national crises in health care and education, why give more money to those who already have enough?"

  • Founded and now runs Lifebridge Foundation in New York City, which is recognized by the UN as a Non-Governmental Organization.
  • Daughter and heir of a cable TV pioneer in Connecticut.
  • Classical soprano in Los Angeles for many years.
  • Has donated her 1997 $6,000 tax break to United for a Fair Economy.

Robin Lloyd

"We don't need this tax break. We shouldn't accept it. It is impoverishing our commonwealth and the world our children will inherit."

  • Director of Burlington, Vermont, non-profit video production company, Green Valley Media.
  • Publisher of an international news and advocacy journal called Toward Freedom.
  • Great-granddaughter and heir of owner of the Chicago Tribune.
  • Donating her $8,000 capital gains tax break to non-profit organizations working for economic and social justice.

Bob Burnett

"I made a lot of money as a Vice President of CISCO. Now I'm starting new businesses and trying to create jobs. I don't see changes in the capital gains rate as changing my investment behavior. I didn't ask for the change in the capital gains rate and don't need it. Why should we investors get special breaks while others are struggling to make a living? That kind of policy doesn't build a stronger economy."

  • Computer Scientist with MBA.
  • First VP of Engineering at CISCO Systems.
  • Retired at age 50; since retirement, has worked as an entrepreneur and philanthropist.
  • Current business ventures include developing a pollution-free engine and underwriting minority-owned small businesses.

United for a Fair Economy staff
who have taken the Tax Break Pledge

Chuck Collins

"We're told that íŽthe economy is booming,' but there's something incongruous about this assertion when wages have been flat or falling for the average working person."

  • Great-grandson of meat packer Oscar Mayer.
  • Co-Founder and Co-Director of United For a Fair Economy (UFE), a national organization working to draw attention to the dangerous consequences of growing income and wealth inequality. (Responsible Wealth is a project of UFE).
  • Has appeared on the Oprah Winfrey Show and CBS This Morning (4/1/98).

Mike Lapham

"As a wealthy person, I have benefitted financially from the Reagan, Bush and Clinton tax cuts for the wealthy, but I don''t believe that shifting the tax burden on to lower and middle class households is in our country's long-term best interest."

  • Stockholder of family-owned paper mill in upstate New York.
  • Worked for 10 years developing mixed-income housing and housing for people with AIDS.
  • Project Director of Responsible Wealth.
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