Obama-GOP Tax Cut Deal Riles 'Patriotic Millionaires'
Column appeared on ABCNews.com, December 11, 2010
Wealthy, business owners disappointed taxes may go down next year.
While the wealthiest taxpayers will gain financially if Republicans and the president successfully extend the Bush-era tax cuts in Congress, a group of millionaires and business owners said they will be disheartened if they pay less taxes next year. Members of the Patriotic Millionaires for Fiscal Strength, a group of 89 millionaires, petitioned President Obama to allow tax cuts on incomes greater than $1 million to expire at the end of the year, as scheduled. [...]
"I think it's a terrible deal for Democrats," said Guy Saperstein, founding member of the Patriotic Millionaires and a former civil rights attorney. "It's terrible on many levels but the most important one is the tax cuts for the rich."
Adding to the Budget Deficit
Saperstein said the tax cuts for the rich and the estate tax would have helped to lower the national debt instead of costing the government $700 billion or more over the next several years.
Saperstein also was disappointed by the reinstatement of the estate tax at 35 percent for two years starting next year with an exemption of $5 million of one's estate. If the tax breaks expire as scheduled at the end of this year, the estate tax would be 55 percent, with a $1 million exemption.
"It would benefit only the top less-than-1-percent, a huge benefit for them," said Saperstein. "I happen to be in that category, but it's still a bad deal for the public. If this deal goes down, the Republicans are going to demand that those deficits be corrected in some way. The public and working class people will end up paying for those deficits."[...]
Lee Farris, estate tax policy coordinator for the organizationUnited for a Fair Economy, said the tax proposal was "outrageous."
"The deal would make the estate tax even weaker than it was under President Bush, the weakest it's been in more than seven decades," said Farris, whose organization is comprised of business owners and farmers across the country.
Estate Tax Giveaway
Farris said the deal was "unacceptable" because it "gives away too much and gets too little in return," via the extension of unemployment benefits and low-income tax credits.
"The people who already have the most money have said, 'We're going to have a weaker estate tax or you can forget about unemployment.' And to me, that's an immoral position," said Farris. "They're saying that's more important than [helping] someone who has lost their job through no fault of their own."
Dave Eiffert, a small business owner who has worked with United for a Fair Economy, said he hoped for a higher estate tax ceiling and deeper tax cuts for the middle class instead of tax cuts for those making $200,000 and more.
Eiffert, co-owner of Snoqualmie Brewery in Snoqualmie, Wash., said he is below the $200,000 income level and is opposed to the notion that tax cuts to the wealthiest will trickle down to create jobs for others.
But Eiffert said it is not too late for the public to speak its mind on the various tax issues before the year comes to a close.
"I always hold out hope until it is a done deal," said Eiffert. "I urge people to contact their legislators and tell them what they want done. And I hope there will be something better than what has been proposed."
Read the full column on ABCNews.com.
Somewhere into the seventh hour of his actual, old-fashioned, stand-up-and-talk-and-don't-yield-the-floor filibuster of the lousy Obama - GOP tax deal, Bernie Sanders made a passionate plea to supporters to let their Senators and Representative know that this is a bad deal. He is urging everybody to call Congress to tell them that we don't need more tax cuts for the wealthy. So are we! Do what Bernie says. Call now. Call often.
By Ashlea Ebeling
Posted on Forbes.com, December 10, 2010
Members of the fair tax movement are outraged at the generous estate tax provisions in the Obama/GOP tax deal and are calling on Congress to strengthen it so it hits more estates. Rather than reinstating the estate tax at 2009 levels (a 45% top rate and $3.5 million per person exemption) as was expected, the deal sets the top rate at 35% and raises the exemption to $5 million. So a couple could leave $10 million to heirs without worrying about the federal estate tax.
“It’s obscene and unnecessary, and it benefits no one but a handful of heirs of rich parents,” stated Mike Lapham, director for United for A Fair Economy’s Responsible Wealth project, in a release today calling for stronger tax provisions in the deal, and applauding House Democrats for their commitment to strengthening the plan. “The estate tax is reason enough to reject the deal,” Lapham said.
Responsible Wealth has been fighting for a fair estate tax for 10 years, ever since the Bush tax cuts started gradually weakening the tax, ending with repeal for 2010. (If Congress does nothing, the estate tax is set to return on Jan. 1 with a $1 million per person exemption and rates of up to 60%.) High-profile signers of Responsible Wealth’s “call to preserve the estate tax” include Forbes 400 members David E. Shaw, Julian Robertson, Jr., George Soros, John Sperling, and Ted Turner. All six children of David Rockefeller, the oldest Forbes 400 member, have signed too.
Last month Responsible Wealth gathered millionaire and multi-millionaire signers of the call who are small business owners and entrepreneurs to speak out on why they support a strong estate tax. [...]
Read the full post on Forbes.com.
Earlier this week, President Obama struck a deal with elitist Congressional Republicans, a deal that he claims is "doing what's right for the American people, for jobs and for economic growth."
The reality is that the deal does more for Paris Hilton than it does the 100,000 people who work at Hilton hotels.
The Obama-GOP plan sucks because it doesn’t do anything to close the wealth divide that has been growing steadily for decades. Closing this gap by allowing the Bush tax cuts to expire and restoring the estate tax was a top priority for progressives during the 2008 election. We expected bold, decisive action. Needless to say, we're a little pissed off.
Compromise usually means that both sides give up a little something to reach an agreement that we can all live with. The problem is, all the Republicans wanted out of a deal with Obama was to preserve tax cuts for the wealthy. And they got it.
Of course, not everything in the deal sucks. Extension of the Bush tax cuts for the middle class is good, as well as the tax credits. And there’s little question that reprieve was essential for the millions of out-of-work Americans. But to settle for a deal that provides a huge tax break for millionaires and billionaires is wildly irresponsible and undeniably unfair. Not to mention sucky.
The deal sucks. And – in plain English – here’s why:
1. It holds unemployed Americans hostage.
It sounds like a nightmare: either watch unemployment benefits for out of work Americans expire or let Wall Street fat cats walk away -- scot-free -- from paying their fair share of taxes. This plan sucks because it wrongly turns this compromise into a black/white, either/or decision. It draws a line in the sand, attempting to divide the left at a time when we should be pulling together.
Besides, I thought we weren’t supposed to negotiate with hostage-takers?
2. It increases economic inequality.
It’s a frightening reality: the top one percent of Americans own as much wealth as those in the bottom 90 percent (to be clear, by “top” and “bottom” we’re only talking net worth). If you think it’s completely unacceptable that billionaire Warren Buffet’s secretary pays more in taxes a higher tax rate than the man himself (as he famously pointed out), know that this plan will do nothing to change that. And that sucks.
The wealthy in this country are doing fine. Why aren’t they being asked to make sacrifices like the rest of us?
3. It values whack economic principles.
The number one economic justification for tax breaks for the rich is that they will somehow trickle down these savings into jobs to provide economic stimulus. Yet, history tells us that this simply isn’t true. If tax breaks for the rich resulted in job creation, we wouldn’t be in the mess we’re in a decade after the Bush tax cuts. History tells us that tax breaks for the rich sit idle in their bank accounts.
Consider a very sophisticated and economically nuanced piece of economic insight: people need money to buy stuff. If we want to stimulate the economy, we need to be looking at how we can put regular people back to work. That seems to be the most surefire plan for economic stimulus out there.
4. It’s more of the same.
Extending Bush tax cuts for the wealthy and weakening the estate tax is bad policy, bad economics, and bad for our country. During challenging times, we should be investing in our people, our education, and our national infrastructure. Instead, we are prioritizing the bank accounts of millionaires and billionaires.
This tax deal does nothing to move us forward and simply provides more of the same, setting us up for a painful bout of economic déjà vu in a year or so.
5. It disrespects the will of the people.
Obama may chide us for being progressive “purists”, but I prefer to think of those who are skeptical of this plan as progressive patriots. It is our job to hold our elected officials accountable. Polling shows that the majority of Americans believe that tax breaks for the super-wealthy should be allowed to expire. After all, low- and middle-income Americans have tightened their belts, why aren’t we asking the same of millionaires and billionaires?
This deal sucks. It sucks real bad. It’s time we rise up, make lots of noise, and hold our elected officials accountable. We must call on our elected officials and tell them that the deal sucks, and we expect more. Whose back do they have, anyway?
December 8, 2010
Dear Senators and Representatives:
The undersigned organizations urge you to establish a robust estate tax during the current lame duck session of Congress. Within the next few weeks, the House will likely consider an extension of the Bush tax cuts; any package must include the permanent extension of a strong estate tax.
Americans for a Fair Estate Tax (AFET), a coalition of dozens of national and state organizations, has long advocated for a robust estate tax that can provide our nation with the desperately needed revenue to invest in priorities such as education, health and nutrition, and infrastructure.
We are told repeatedly, however, that increased investments in the American people are not affordable because the federal budget deficit is too great. Yet, Congress has sharply decreased an important revenue source that can help fund these priorities and reduce the budget deficit.
The Bush tax cuts enacted in 2001 set in place the gradual reduction and then temporary one-year elimination of the federal estate tax for 2010. Unfortunately, we have already seen the revenue loss resulting from the one-year repeal. In March, an oil and gas businessman in Texas became the first billionaire in United States history to pass along his entire estate – worth some $9 billion – without paying any federal estate tax.
President Obama recently endorsed a Bush tax cut extension compromise with Republicans that includes a weak estate tax. With a $5 million exemption for individuals and a $10 million exemption for couples, and a tax rate of 35 percent, this proposal would severely undermine this fair and important revenue source.
The president originally proposed permanently extending the 2009 estate tax in his budget proposal this year. With a $3.5 million exemption for individuals and a $7 million exemption for couples, and a tax rate of 45 percent, this proposal would be more than generous to the wealthiest among us and would not harm small businesses or family farms.
Restoring the estate tax to 2009 levels or stronger would affect only the wealthiest one quarter of one percent of estates and would bring in roughly $250 billion in revenue over 10 years. The Brookings/Urban Institute Tax Policy Center estimates that in 2009, only 100 small businesses and small farm estates nationwide owed any estate tax, and those paid an average tax of only 14 percent.
Any proposal that grants a higher exemption level or a lower tax rate than existed in 2009 will virtually eliminate the estate tax and cost our nation much more revenue down the road. Moreover, no proposal should provide a prepayment option or include an unlimited farm exemption, both of which would provide an unacceptable loophole and deprive the Treasury of much-needed federal revenue.
We support re-establishing a permanent robust estate tax because it serves these crucial purposes:
- The estate tax raises revenue that our nation needs to invest in the American people. Continued repeal will deepen the budget deficit by roughly $800 billion between 2012 and 2021.
- Polls show a clear majority of voters want there to be an estate tax, believing that an exemption of between $2 million and $3.5 million is fair. Voters continually place the estate tax at the bottom of the list of taxes the government should cut.
- Because the government does not tax assets bequeathed to a charity, the estate tax encourages charitable contributions. This is especially important in light of the current economic downturn in which charities are struggling to continue providing vital community services.
- The estate tax functions as a backstop for the income tax, taxing capital gains that previously have not been taxed. Over half the value of inherited estates is capital gains income that has never been taxed. Most large estates include assets such as real estate, stocks or bonds. Any increase in the value of these assets is capital gain income that would only be subject to the income tax if the assets were sold during the owner’s lifetime.
A robust estate tax must fairly tax wealth that might otherwise escape taxation entirely, preserve a system that ensures that the very wealthy pay their fair share, and maintain a structure that encourages charitable giving.
9to5, National Association of Working Women
American Association of University Women (AAUW)
American Federation of State, County and Municipal Employees (AFSCME)
American Federation of Teachers
American Heart Association
Americans for Democratic Action
Americans for Responsible Taxes
Arizona Advocacy Network
Bread for the World
Campaign for America's Future
Citizen Action / Illinois
Citizen Action of New York
Citizen Action of Wisconsin
Citizens for Tax Justice
Coalition on Human Needs
Colorado Progressive Coalition
Communications Workers of America
Community Action Partnership
Community Organizations in Action
Connecticut Citizen Action Group
Economic Opportunity Institute
Every Child Matters Education Fund
Florida Consumer Action Network
Friends Committee on National Legislation
Friends of the Earth
Georgia Rural Urban Summit
Growth & Justice
Institute for Policy Studies' Program
Iowa Citizen Action Network
Jobs with Justice
Main Street Alliance
Maine People's Alliance
Michigan Citizen Action
Missouri Progressive Vote Coalition
National Committee for Responsive Philanthropy
National Community Tax Coalition
Missouri Progressive Vote Coalition
National Committee for Responsive Philanthropy
National Community Tax Coalition
National Education Association
National Women's Law Center
NETWORK: A National Catholic Social Justice Lobby
New Hampshire Citizens Alliance
New Jersey Citizen Action
Ocean State Action
Progressive States Network
Service Employees International Union (SEIU)
Sugar Law Center for Economic and Social Justice
Tax Fairness Oregon
Tax Justice Network USA
Tennessee Citizen Action
United Action for Idaho
United Church of Christ, Justice and Witness Ministries
United for a Fair Economy
Voices for Progress
Wealth for the Common Good
West Virginia Citizen Action Group
Wider Opportunities for Women