TAX WEALTH LIKE WORK:
Upper-Income Taxpayers Call for Higher Tax Rates On Investment Income
Boston, MA (April 4, 2011) -- As Congress wrestles with budget cuts of $33 billion and states struggle with federal aid cutbacks and budget shortfalls, a group of high-income individuals are advocating an increase of the tax rate on income from assets.
On Monday, April 11, Responsible Wealth will launch the Tax Wealth Like Work Campaign to focus attention on the special treatment in the U.S. tax code that rewards income from investments over income from wages. Beneficiaries of this preferential tax treatment are pledging to give all or a portion of their tax savings away to support groups working to end the special treatment of unearned investment income and promote a more fair and progressive tax system.
Under current law, income earned from wealth, such as capital gains and dividends, is taxed at a top rate of 15 percent, while income from earned wages is taxed as high as the top rate of 35 percent. “This double standard for how we tax income unfairly rewards those who already have substantial wealth over those who don’t,” said Responsible Wealth project director Mike Lapham. “This fuels the growing wealth disparities in the United States and deprives our nation of the funds we need to meet our shared needs.”
As part of this educational campaign, Responsible Wealth and its parent organization United for a Fair Economy (UFE) have created a new, interactive tax calculator that will be available starting on April 7. It 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.
Supporters who use the tax calculator can then go on to take the Tax Fairness Pledge to pledge that all or a portion of their tax savings will go to support groups working to promote a more fair tax system.
High-income and high net worth spokespeople will be available for interviews starting April 7. To arrange an interview, please contact Sue Dorfman at [email protected] or Mazher Ali at [email protected] or 617-423-2148 x101.
Wealthy New Yorkers Declare:
"We Are Willing and Able to Share in the Solution to Our States Budget Crisis."
An Open Letter to the Governor and NYS Legislature
ALBANY, NY (03/24/2011) – In an open letter to the governor and state legislators today, wealthy New Yorkers from around the state said they are ready and willing to forgo their tax cut to be part of the budget solution.
Joining with Responsible Wealth, New Yorkers for Fiscal Fairness, the Fiscal Policy Institute, and the GrowingTogetherNY and Strong Economy for All coalitions, the signers of the letter told the Governor and legislative leaders that many of his proposed cuts are "unnecessary" because a continuation of the PIT surcharge on the wealthy, currently set to expire at the end of 2011, could generate needed revenue and help mitigate the most harmful impact of the proposed cuts.
"Progressive individual income taxation, which asks for contributions to society based on an individual's relative income, is not only right and fair, it's also an essential and long-time part of our nation's social contract. Continuing the existing surcharges on the wealthiest New Yorkers, of which I am one, is without question both appropriate and fair, especially since it will mean less cuts in State aid to education, health care and other essential social services," said Leo Hindery Jr. "We all love New York State and its fundamental fairness, and all that matters right now in this difficult economy is maintaining that fairness and improving the quality of life throughout our City and State. 'Trickle down' economics has been thoroughly discredited as a ruse to further enrich the already extremely wealthy, and there is simply no justification now or in the medium term for rolling back the surcharges and adding further unfair burden to middle class New Yorkers. " Leo Hindery, Jr. is Chairman of the Economic Growth/Smart Globalization Initiative at the New America Foundation and a member of the Council on Foreign Relations. Currently an investor in media companies, he is the former CEO of Tele-Communications, Inc. (TCI), Liberty Media and their successor AT&T Broadband.
Bill Samuels, an entrepreneur and founder of the New Roosevelt Initiative, said, "As a progressive, pro-business Democrat in New York, I believe Governor Cuomo must address a number of issues, such as Independent Redistricting Reform, Ethics Reform and, equally as important, getting our fiscal house in Albany in order. Everyone must make appropriate sacrifices if we are going to balance the state budget and create jobs. Part of that equation is making sure that those of us who are in the top income brackets continue to pay our fair share of the income tax burden. With the sacrifices being made by working and middle class citizens of New York, it is not only the fair thing to do, but the right thing to do. That is why I am proud to sign this letter and join with Responsible Wealth."
"Governor Cuomo, we all understand it's a difficult time for the state and you're trying to balance a huge budgetary shortfall. However, many of us New Yorkers are troubled that you're giving a $5 billion tax cut to two percent of New York's most wealthy while cutting $9 billion from education and social services for the rest of New Yorkers. Please ditch this backwards Robin Hood plan and give all New Yorkers a fair shake," said actor and activist Mark Ruffalo in a brief video he recorded for the effort.
"We are in a financial crisis in this state and nation," said Chet Opalka, a retired chemist, investor and philanthropist from the Albany area. "The tax code has treated me and others in my circumstance very well in the past. I believe that it is time for us to step up in this time of need to help relieve some of the load from those who tend to bear the heaviest tax burden. Continuing the income tax surcharges for individuals with higher incomes, while having a negligible impact on their quality of life, can have a significant impact on many individuals of more modest means. Coupling our financial support with responsible spending by government will go a long way toward developing a stronger economy and better quality of life that we and future generations of New Yorkers deserve."
"As a New York taxpayer with income over the existing surcharge threshold, I supported the Millionaires' Tax when it was enacted in 2009, and I support extending it now, without hesitation," said James E. Mann of Mt. Kisco. "I've been fortunate enough to build considerable wealth, aided in part by support from governmental business programs and the measures that ensure an economic and political environment in which private enterprise can prosper. Those of us who have been fortunate to achieve wealth owe a good chunk of that back to support strong services and education that make this a great state to live in. Now is not the time to be giving us tax cuts. Those of us with upper incomes have the biggest investment in a stable economic and political environment and can more than afford a small surtax on our income. This shouldn't even be a question. I urge Governor Cuomo and the Legislature to extend the tax surcharge – as is!" Mr. Mann is co-founder and joint managing director of Crestbury Ltd., a manufacturer of marine salvage equipment. Following his sale of Crestbury, he worked in the field of private equity investment, where he directed and managed 23 first stage investments in low- and mid-technology firms.
Donald Shaffer of New York City, who spent 35 years in the insurance industry and another 15 years as a pro bono cooperating lawyer with the Civil Liberties Union, said, "A temporary income tax surcharge enacted for the first time in 2003 helped solve New York State's fiscal problem and provided substantial funds for every school district in the state, while creating so little burden that it was hardly noticed. In 2009, because the burden on people like me was so little, the surcharge was reenacted for three years. Here we are again, with a staggering deficit and an opportunity to help close that deficit with less pain. It would be unreasonable to sacrifice our education system and health care benefits in order to remove a tax from people like me who hardly notice it."
The letter was a joint effort between the organizations listed above and the Responsible Wealth project. Mike Lapham, director of Responsible Wealth, said, "Many of the signers of this letter are members of the Responsible Wealth project. They are people who recognize that New York needs a much more progressive tax structure, and that upper-income folks like themselves need to be a big part of the revenue solution to the current budget crisis. They would rather pay more in taxes than see state services and infrastructure deteriorate. They value the quality of life in New York and are willing to pay more taxes to help preserve it." Responsible Wealth, a project of the national non-profit United for a Fair Economy, is a national network of over 700 business leaders, investors and other wealthy individuals who are concerned about growing economic inequality.
"It is refreshing to see that many wealthy New Yorkers are more than willing to forgo a tax cut in order to avert cuts in essential services. They are willing to step up and share in the solution to this budget crisis. Given this fact, and that the overwhelming majority of the public support these upper income tax surcharges, we ask the Governor and the Legislature to do the right thing and maintain the current surcharges on the wealthiest among us," said Ron Deutsch, executive director of New Yorkers for Fiscal Fairness.
"Now is not the time for a $5 billion tax cut for the richest of the rich. Shared sacrifice for the common good is more appropriate -- it's the right and fair approach to the budget crisis, and we're happy that these 'Millionaires for the Millionaires Tax' have joined the majority of New Yorkers who see it that way," said Michael Kink, Executive Director, Strong Economy For All Coalition.
Upper-income New Yorkers can add their names to this growing list of supporters at www.responsiblewealth.org.
LETTER SIGNERS AVAILABLE FOR PRESS INTERVIEWS:
Bill Samuels, Founder New Roosevelt Initiative
Contact: Jay Strell, 212 691 2800
Leo Hindrey, Jr.
Contact: Anya Hoerberger: (212) 503-2858 email: [email protected]
Chet Opalka, retired chemist / entrepreneur, angel investor and philanthropist (Capital District) 518-674-2608
Don and Doris Shaffer
Michael Lapham, Director, Responsible Wealth
Main: 617-423-2148 x112
Mike Lapham is director of Responsible Wealth, a project of the national non-profit United for a Fair Economy. Responsible Wealth is a national network of over700 business leaders, investors and other wealthy individuals who are concerned about growing economic inequality. Mike was born and raised in New York State and until recently his family owned a manufacturing business in the Adirondack region of the state for five generations.
FOR IMMEDIATE RELEASE
Schakowsky Introduces Bill to Tax Millionaires & Billionaires
The most popular way to reduce the deficit, according to 81% of Americans? Put a surtax on federal income taxes for those who make more than $1 million per year. – NBC/Wall Street Journal Poll, March 2, 2011
WASHINGTON, DC (March 17, 2011) – Today Rep. Jan Schakowsky (D-IL), member of President Obama's 18-member Fiscal Commission, introduced the Fairness in Taxation Act, which would create new tax brackets for millionaires and billionaires. Original co-sponsors include co-chairs of the Congressional Progressive Caucus, Rep. Raul Grijalva (D-AZ) and Rep. Keith Ellison (D-MN), as well as Rep. Jesse Jackson, Jr. (D-IL), Rep. Donna Edwards (D-MD), Rep. Bob Filner (D-CA), Rep. Jerry Nadler (D-NY), Rep. Steve Cohen (D-TN), Rep. John Yarmuth (D-KY), and Rep. Peter DeFazio (D-OR).
Income inequality in America is the worst we've seen since 1928. Wages have stagnated for middle and lower income families despite enormous gains in productivity. Where has all the money gone?
"In the United States today, the richest 1% owns 34 % of our nations wealth thats more than the entire bottom 90%, who own just 29% of the countrys wealth," said Rep. Schakowsky. "And the top one-hundredth of 1% now makes an average of $27 million per household per year. The average income for the bottom 90% of Americans? $31,244. It's time for millionaires and billionaires to pay their fair share, which is why I introduced the Fairness in Taxation Act. This isn't about punishment or revenge. It's about fairness. It's about avoiding budget cuts that harm middle class families and those who aspire to it. We can choose to cut education, job creation and health care, or we can choose to ask those who can contribute more to do so."
The current top tax bracket begins at $373,000 in income and fails to distinguish between the "well off" and billionaires like the top 20 hedge fund managers whose average income last year was over $1 billion.
The Fairness in Taxation Act enacts new tax brackets for income starting at $1 million and ends with a $1 billion bracket. The new brackets would be:
- $1-10 million: 45%
- $10-20 million: 46%
- $20-100 million: 47%
- $100 million to $1 billion: 48%
- $1 billion and over: 49%
The bill would also tax capital gains and dividend income as ordinary income for those taxpayers with income over $1 million. If enacted in 2011, the Fairness in Taxation Act would raise more than $78 billion.
Support for Schakowsky's Fairness in Taxation Act:
"I think very wealthy people like me should pay substantially higher taxes, since we have done exceedingly well in the last few decades," said Katharine Myers*, a millionaire from Pennsylvania whose income comes from royalties from the Myers-Briggs personality test, created by her mother-in-law, which she has managed with Peter Myers since the 1980s. "Our taxpayer-funded government contributed to my success." Myers has been a supporter of United for a Fair Economy and its Responsible Wealth project for many years.
"Its time we treated multi-millionaires the same way we treat working families by creating a tax bracket to match their income," said Rep. Ral M. Grijalva (D-AZ), co-chair of the Congressional Progressive Caucus. "Theres no reason to treat the wealthiest one percent of the country any more specially than anyone else, and right now thats exactly what our tax system is doing. The Republican war on working families means cutting from the middle and handing the savings to the top. Instead, lets have everyone pay their fair share to create jobs and get the economy moving again."
"Millionaires and billionaires should be giving to charity not getting it," said Rep. Keith Ellison (D-MN), co-chair of the Congressional Progressive Caucus. "The middle class is shrinking and deficits are rising because Republicans are giving a pass to special interests who arent paying their fair share. This bill is part of a plan to level the playing field."
"A tax system where families earning several [hundred] thousand dollars are taxed at the same rate as millionaires is unfair, and unsustainable," said Rep. Donna Edwards (D-MD). "The Fairness in Taxation Act is a common sense solution to eliminating this inequality and balancing the federal budget. At a time when House Republicans are demanding that working families, teachers, and firefighters bear the burden of reducing the deficit, millionaires should be required to contribute their fair share."
Groups that have endorsed Schakowsky's Fairness in Taxation Act:
United for a Fair Economy, Citizens for Tax Justice, Citizen Action Illinois, U.S. Action, Campaign for America's Future, Wealth for the Common Good, and The Agenda Project.
"Congresswoman Schakowsky has shown that there is another way," said Steve Wamhoff, tax expert from Citizens for Tax Justice. "Her proposal would make the federal income tax more progressive by introducing higher rates for taxpayers with income in excess of $1 million. Millionaires have benefited disproportionately from the tax cuts enacted over the past decade, so it seems entirely reasonable that they share in the sacrifices needed to get our fiscal house in order."
"The budget cuts being debated in Washington shamefully require middle class families to pay the price for the recklessness of the Wall Street bankers and hedge fund managers who broke our economy," said Brian Miller, Executive Director of United for a Fair Economy. "Instead of punishing middle class families and de-funding America, the Fairness in Taxation Act asks those who have benefitted so heavily from the economic bounce of Wall Street to share responsibility for getting our nation's finances on track."
"Any sensible program for deficit reduction must begin with changing the massive tax cuts for the very wealthy," said Roger Hickey, co-director of the Campaign for Americas Future. "Those tax give-aways were a major cause of our current deficit. In an era of excessive inequality we should end Bush-era tax cuts for the wealthiest Americans. We need progressive revenues not just to bring down deficits, but also to finance investments in jobs and sustainable growth. The introduction of the Fairness in Taxation Act is an important step that will be popular with the American people."
* Katharine Myers is a member of United for a Fair Economy's Responsible Wealth project. Additional Responsible Wealth members -- from Alabama, New York and California -- who support the Fairness in Taxation Act are now available for interview. For scheduling, please contact Lee Farris, United for a Fair Economy, 617-423-2148 x133 or [email protected]
FOR IMMEDIATE RELEASE - January 14, 2011
Report: Austerity Policies Worsen Racial Economic Inequalities,
Hit Blacks and Latinos Hardest
United for a Fair Economy Releases State of the Dream 2011:
Austerity for Whom? for MLK Day
Boston, MA – The official unemployment rate is 15.8 percent among Blacks and 13 percent among Latinos; Blacks earn only 57 cents for each dollar of White family income, Latinos earn 59 cents; and Blacks have only 10 cents of net wealth while Latinos have 12 cents to every dollar of net wealth that Whites have. As documented in the “State of the Dream 2011: Austerity for Whom?,” this is the precarious state in which Blacks and Latinos find themselves as the nation, still struggling amidst the Great Recession, remembers the life of Dr. Martin Luther King Jr. who was gunned down while leading the Poor People’s Campaign in 1968.
The 8th annual “State of the Dream” report from United for a Fair Economy analyzes the policy positions of the new House majority – shrinking government and cutting taxes for those at the top – and their implications on communities of color. “Austerity measures based on the conservative tenets of less government and lower taxes will ratchet down the standard of living for all Americans, while simultaneously widening our nation’s racial and economic divide.” said Brian Miller, Executive Director of United for a Fair Economy and co-author of the report.
Original analyses in “State of the Dream 2011” show the clear beneficiaries of the top-end tax cuts included in the December tax deal. Whites are three times more likely than Blacks and 4.6 times more likely than Latinos to have incomes of $250,000 or more, and thus receive a disproportionate benefit from the extension of the Bush tax cuts for top-tier earners. Special tax breaks for investment income flow overwhelmingly to Whites as well. Blacks earn 13 cents and Latinos earn 8 cents to each dollar of White dividend income. Capital gains income shows similar disparities as documented in the report.
“The deficits that these tax cuts help create are being used to justify a host of austerity measures that will harm Americans of all races, but will hit Blacks and Latinos the hardest,” adds Miller. “With 42 percent of Blacks and 37 percent of Latinos lacking the funds to meet minimal household expenses for even three months should they become unemployed, cutting public assistance programs will have devastating impacts on Black and Latino workers.” The report documents the relative importance of safety net programs under threat, such as Social Security, to Blacks and Latinos.
“On the front line of the budget cuts are the state and federal workers that police our streets, educate our children, and inspect our food supplies,” adds Miller. “Severe cuts to our public sector work force will erode our nation’s ability to meet the needs of all Americans regardless of race. At the same time, the brunt of those layoffs will be felt by African-Americans who are disproportionately employed in public sector jobs for a host of historic reasons.” Blacks are 30 percent more likely to work in public sector jobs than the general work force and 70 percent more likely to work for the federal government. The report also documents the greater strides that Blacks and Latinos have made in achieving parity with their White counterparts in the public administration jobs threatened by budget cut proposals.
The report – which can be downloaded at http://http://www.faireconomy.org/dream – calls on policy makers to reject austerity measures that will increase economic inequality and worsen the racial divide. In light of the startling facts of racial economic disparity documented in the report, additional policy steps are called for, including: increased federal aids to states and cities, effective jobs programs, restoring the progressive tax system, redirecting unproductive federal spending, strengthening workers rights, and protecting public sector jobs.
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://http://www.faireconomy.org.
FOR IMMEDIATE RELEASE - December 13, 2010
UFE Calls Obama-GOP Tax
Package Shameful – Urges House Democrats to
Fight for a Better Deal and a
Stronger Estate Tax
“The Senate’s decision to approve the ill-conceived tax package negotiated
between Obama and GOP leaders is shameful,” stated Brian Miller, executive
director of United for a Fair Economy (UFE), after the Obama-GOP tax compromise
cleared its first procedural hurdle in the Senate today. “Fortunately, the buck
does not stop in the Senate. We are calling on the House to fight back and win
a better deal for the sake of middle and working class Americans – those who
will be saddled with massive new debt to pay for wasteful tax breaks for
millionaires and billionaires.”
Since the Obama-GOP deal was unveiled last week, President Obama has been fighting an uphill battle to sell the deal to his own party, including a defiant House and the Congressional Black Caucus. A growing chorus of organizations has joined the fight to oppose the plan in its current form, including powerful unions, citizen groups, and others affiliated with Americans for a Fair Estate Tax. Much of the outrage over this proposal has been directed at President Obama’s dramatic concession to the Republicans allowing for the weakening the federal estate tax.
Miller added, “Republicans have ruthlessly allowed the livelihoods of millions of out-of-work Americans to hang in the balance by refusing to extend unemployment benefits – unless they get extended income tax breaks for the top 3 percent and a smashing of the estate tax to an 80-year low. They inexplicably refuse to have America's most financially enriched contribute to the rebuilding our economy.”
UFE has long stood in support of a strong estate tax, along with a generally more progressive tax system, as foundational to preserving the kind of economy that merits hard work. “After decades of failed trickle-down policies, inequality in the U.S. has reached its highest level since 1928, just before the Great Depression. Despite this disturbing trend, Congressional Republicans seem to believe the problem with our economy is that rich people don’t have enough money. That’s a complete misread of the challenge we’re facing. It’s time we put the middle class first and stop bankrupting our nation to give wasteful and expensive tax cuts to the extremely wealthy.”
At the 2009 estate tax levels, a wealthy parent could pass down up to $3.5 million tax-free to their heirs ($7 million for a married couple). Additional breaks and exclusions ensure even more generous exemptions for small businesses and farms. In a press conference organized last month by UFE, Dave Eiffert, co-founder of the Snoqualmie Falls Brewery outside of Seattle, stated, “I don’t know any small business owners who are worried about paying the estate tax. Opposition to the estate tax is largely pushed by families who have enormous estates. They pay huge sums to spread misinformation and use small business people as their poster children.”
“Thankfully, we’re seeing some of the gumption we’ve been craving in a rejection of the tax deal by House Democrats with the support of the Congressional Black Caucus,” added Miller. “Angry people from across this country are calling on these House members to stay strong in their opposition, and to fight for meaningful revisions before this so-called compromise becomes law.”
# # #
FOR IMMEDIATE RELEASE: December 10, 2010
Americans for a Fair Estate Tax Coalition Urges Congress
to Restore Strong Estate Tax
WASHINGTON, DC – The Americans for a Fair Estate Tax (AFET), a coalition of dozens of national and state organizations, announced today that it sent a coalition letter to all members of the House and Senate calling for Congress to restore the estate tax to 2009 levels or stronger.
The letter noted that the deal negotiated by President Obama and Republicans includes two years of a sharply weaker estate tax, with a $5 million exemption for individuals and a $10 million exemption for couples, and a tax rate of 35 percent.
In the letter, sixty-nine organizations urged Congress to “re-establish a permanent robust estate tax.” Among the 69 organizations signing the coalition letter are groups with national memberships such as YWCA and USAction, philanthropic groups such as Independent Sector and 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, “In times of crisis, we pull together and share the sacrifice. While working- and middle-income people are struggling, this deal would gut the estate tax, putting billions more in the pockets of millionaires and billionaires. United for a Fair Economy calls on Congress to amend the deal to restore a strong estate tax.”
Gary Bass, OMB Watch Executive Director and AFET steering committee member, said, “The presence of an estate tax provides an incentive for the wealthy to contribute to charitable organizations. And in this harsh economic environment, institutions that feed the hungry, shelter the homeless, and train jobless workers are acutely feeling the crush of an increased demand for their services as their funding sources dry up.” He continued, “President Obama inexplicably gave away the store to Paris Hilton and other heirs to vast fortunes through the evisceration of the estate tax.”
The letter also points out that:
- 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 Tax Policy Center estimates that in 2009, only 100 small businesses and small farm estates nationwide owed any estate tax.
- 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.
- Continued repeal of the estate tax would deepen the budget deficit by roughly $800 billion between 2012 and 2021.
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 in some form 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, citizen participation in public policy decisions, and the use of fiscal and regulatory policy to serve the public interest. Learn more at www.ombwatch.org.
# # #
FOR IMMEDIATE RELEASE Friday, December 10, 2010
Contact: Mazher Ali, 617-423-2148 x101, [email protected]rg
Responsible Wealth Calls for Stronger Tax Provisions in Obama-GOP Deal
Applauds House Democrats for Their Commitment to Strengthening the Plan
Boston, MA -- Responsible Wealth, a nationwide network of more than 700 business leaders and high wealth individuals, vigorously rejects President Obama’s bargain with the Republican leadership on taxes announced Monday and applauds House Democrats for their commitment to improve the tax provisions in the deal. Mike Lapham, Responsible Wealth’s project director, issued the following statement on Friday:
“Responsible Wealth members recognize that in times of crisis, people at all economic levels need to pull together and share in the sacrifice. Our members oppose the Obama-GOP deal because massive tax breaks for multimillionaires and billionaires are fiscally irresponsible, won’t help stimulate the economy, and instead will pull us further apart.
“We got into this economic mess largely by giving huge tax breaks to the wealthy for the past 10 years. Now the GOP insists that the very same strategy will get us out of the mess. It makes no sense at all. If tax cuts for the rich resulted in job creation, we wouldn’t be where we are today. For the GOP, tax cuts for the wealthy are the prescription for every illness. To the contrary, the tax cuts themselves are part of the disease the nation is suffering from.
“Responsible Wealth members, who are all among the top 5% of earners and wealth holders, particularly oppose the estate tax portion of this deal. Rather than reinstating the 2009 estate tax levels, as most observers expected, Obama’s deal actually reduces the rate to 35% and raises the deduction to $5 million for the next two years. It is obscene and unnecessary, and it benefits no one but a handful of heirs of rich parents. The estate tax is reason enough to reject the deal.
“We applaud the commitment by Speaker Pelosi and the House Democrats to reject the tax provisions and work toward a bill that helps working families, limits tax cuts to millionaires and billionaires, and is fiscally sound. They understand that the loss in revenue from these tax breaks will be used to justify cutbacks that will hurt everyday people – schools, health care and other programs will end up being cut.
“The Republican experiment has failed, repeatedly. There is no excuse for giving it another two years, even in good economic times, which these certainly are not.”
Responsible Wealth member Jerry Fiddler, founder of Wind River Systems, and currently CEO of Zygote Ventures, added, “The Obama proposal gives away far too much on both top-bracket income tax rates and the estate tax. As a business owner, I resent being used as a poster child for weakening the estate tax or extending top tier tax rates. No business owner that I know of, myself included, makes business decisions based on paying estate tax. I’m proud and happy to pay the estate tax.”
Responsible Wealth, a project of the non-profit United for a Fair Economy, is a network of over 700 wealthy and upper-income business leaders, investors and inheritors who use their unique voices to advocate for progressive state and federal taxation and greater corporate accountability.
Mike Lapham and other Responsible Wealth members are available for interviews upon request.
# # #
FOR IMMEDIATE RELEASE: December 6, 2010
United for a
Fair Economy Condemns Republican Blockade on Tax Cuts;
Calls for Passage of a Strong Estate Tax
Lapham, Farris, and Farm and Business Owners Available for Comment
- Lee Farris, UFE Estate Tax Policy Coordinator, is co-author of the report “Spending Millions to Save Billions: The Campaign of the Super-Wealthy to Kill the Estate Tax”, and has appeared on Marketplace, Fox News, the Washington Post, and the Wall Street Journal.
- Mike Lapham, UFE Responsible Wealth Director. Responsible Wealth's 700 members use their unique and surprising voices to speak out in favor of progressive taxes. Mike is a fifth generation heir of a paper business, and has appeared on Fox News, MSNBC, CNBC and more.
- Business owners, farmers, investors and other wealthy individuals who support higher taxes for the wealthy and a strong estate tax, from every state across the US.
UFE Applauds Dem Leaders for Showing Spine on Top Tier Tax Cuts;
Believes Strong Estate Tax Needs to be Part of the Conversation
Farris, Lapham and Business Spokespeople Available for Comment
“It’s heartening to hear the Democrats finally sticking up for the people they represent. The wealthiest 2% in this country need this tax cut extended about as much as Washington needs more lobbyists. We deserve an up-or-down vote on middle class cuts,” said Mike Lapham, director of UFE’s Responsible Wealth project. “Tax cuts for the wealthy simply do not create jobs, so we need to stop acting like they do. We have a $700 billion opportunity to roll back the Bush cuts on the wealthiest 2% and use those funds to create jobs. Let’s keep the tax cuts for the other 98% who will spend them in the economy. I have to wonder about the agenda of anyone who would bypass this opportunity to get our country back on track.”
Lee Farris, UFE’s Estate Tax Policy Coordinator, added, “Senator McConnell’s plan to fully repeal the estate tax – at a cost of $698 billion over ten years – is reckless and out of tune with current fiscal reality. The estate tax has been the elephant in the room during these debates and repeal would be nothing but a giveaway to the wealthiest of the wealthy. Now is the time to pass permanent estate tax legislation at 2009 levels or stronger. How can anyone even suggest repealing the estate tax at a time like this?”
FOR IMMEDIATE RELEASE: November 16, 2010
Small Business Owners Say Yes to Estate
Tax, Tell Tax Opponents ‘You Don’t Speak for
They Join United for a Fair Economy in Asking Congress and White House for Permanent Restoration of a Robust Tax on Inheritance
Boston, MA -- A group of small business owners and entrepreneurs today spoke out in support of the estate tax, insisting that opponents of the tax have misrepresented the interests of small businesses for their own agenda. Coming from four different industries in four different states, these business owners explained their support for a federal tax on inherited wealth during a conference call organized by United for a Fair Economy (UFE) this morning. Each of the speakers has also signed UFE’s “Call to Preserve the Estate Tax.” Amid reports of possible compromise on the expiring Bush tax cuts, the fate of the federal estate tax remains unclear as Congress decides this week on a tax package that will go to a floor vote next month.
“I don’t know any small business owners who are worried about paying the estate tax,” said Dave Eiffert, a signatory to United for a Fair Economy’s Call To Preserve the Estate Tax who co-founded the Snoqualmie Falls Brewery outside of Seattle with a group of business partners in 1997. “Opposition to the estate tax is largely pushed by families who have enormous estates. They pay huge sums to spread misinformation and use small business people as their poster children. In my view, repealing or cutting the estate tax is just another billionaire bailout that will line the pockets of the heirs and heiresses of multi-millionaires and billionaires.” The brewery employs 20 people and has annual sales of $1.2 million. “Like almost all small business owners, I do not expect to owe the estate tax. Next time you hear someone say small business owners oppose this tax, don’t believe them.”
Of the 5,500 estates expected to pay any tax under the 2009 rules, only about 100, or 1.8%, of those estates will have a majority of their assets in a small business or farm, and of those 100, the vast majority have sufficient cash to pay the tax.
Jean Gordon co-owns Frostyaire of Arkansas, an agricultural freezing and cold storage company bought by her parents in 1950 in Little Rock. Gordon spoke out in favor of the estate tax, saying “At Frostyaire, our decisions about hiring employees, purchasing equipment, and expanding the business are not based on tax policy but on the number of customers and the amount of product they have to store with us. The best way to help small businesses like ours is to put more money in the hands of the middle class who will spend the money as customers of our businesses, rather than cutting the estate tax to ensure that very wealthy heirs can have a larger inheritance. If Frostyaire becomes more profitable, I would be happy to pay the tax as my family’s contribution for being part of the American economy.” Frostyaire has 45 employees and two freezer warehouses. Gordon, who has also signed UFE’s Call to Preserve the Estate Tax, expects she will owe no estate tax under 2009 rules.
John Russell, a real estate developer from Portland, OR, said, “I am one of the tiny fraction of small business owners who will owe the estate tax, and that’s fine with me. My success would not have been possible without investments by the federal government, along with the city and state, in redeveloping downtown Portland – particularly the investments in light rail and streetcar systems. Federal tax incentives like accelerated depreciation and selling tax credits to investors helped me attract investment and lower our cost of doing business. I see the estate tax as a way to pay some of those public investments and tax incentives back to society – to help make success possible for the next generation.” His company, Russell Development, owns and operates six office buildings and provides employment for about 50 people. Russell has signed UFE’s Call to Preserve the Estate Tax.
Russell added, “Small businesses do not pay the estate tax. Let’s be clear: the estate tax is not a small business or farm issue that has bubbled up from the grassroots. This is an orchestrated effort funded by some of the richest families in the country who want to get out of paying their fair share. These wealthy individuals have used small businesses and farms as the all-American icons to promote and front their cause, but the facts just aren’t there to back that up.”
“I’m one of the 0.25% of the population who will owe the estate tax,” said Jerry Fiddler, whose high-tech business, Wind River Systems, employed 2,000 people at its peak, before being bought by Intel for $850 million in 2009. Fiddler, a signatory to UFE’s Call to Preserve the Estate Tax, is now a venture capitalist specializing in green technology starts ups. “Most small businesses don’t come anywhere near the $3.5 million exemption. The traditional mom and pop businesses – the grocery store, the dry cleaner, the bakery, my dad’s fabric shop – just don’t have that kind of value. And most businesses, once they’re beyond a certain size, diversify their assets so paying some estate tax does not threaten the business. The idea that we should throw out the whole estate tax, or raise the exemption even higher than three and a half million, on the basis of a few edge cases, is offensive, and not the way we should make tax policy. As a small business owner and creator, I do not want the estate tax thrown out in my name.”
Given the 2009 exemption of $3.5 million per spouse, the estate tax is paid by the wealthiest 0.25% of the population. Lee Farris, UFE’s Estate Tax Policy Coordinator noted, “Small businesses are largely protected from the estate tax already. Multiple business-friendly special provisions in the law mean most small businesses and farms do not have to pay the tax. Those provisions allowed any given small business or farm estate to pass on up to $9 million untaxed in 2009. That’s why, out of 2.4 million deaths in 2009, only about a dozen were small business or farm estates with a lack of cash to pay the estate tax.” Farris added, “It makes no sense to set tax policy for our entire country based on the exception rather than the rule. It’s irresponsible to shift costs onto millions of Americans by giving massive tax breaks to thousands of wealthy heirs. That’s why UFE is mobilizing our members this week to call Congress.”
UFE as an organization supports the Harkin-Sanders-Whitehouse Responsible Estate Tax Act, which includes a $3.5 million exemption per spouse and a graduated rate going from 45% up to 65% on estates over $500 million ($1 billion for couples). UFE opposes the Lincoln-Kyl proposal with its $5 million per spouse exemption, which would cost $130 billion more over 10 years than even an extension of 2009 rates. UFE also opposes the Feinstein proposal for an unlimited farm exemption, which would create a loophole allowing wealthy individuals to shelter their wealth by buying farms; this would drive up the price of farmland and hurt small farmers in the end.
Some 6,000 Americans have signed UFE’s Call to Preserve the Estate Tax; 2,000 signers expect to owe the estate tax themselves or come from families that have already paid the tax. Among the signers are also more than 600 owners of small businesses and farms, including all four small business people on today’s call.
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 http://http://www.faireconomy.org.
(To arrange interviews with any of the speakers or farm and small business owners around the country, contact Susan Roth and Anne Singer, contact info above. An audio recording of this event will soon be available at UFE's November 2010 Estate Tax Teleconference page.)
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