- “People like myself should be paying a lot more taxes.” - Warren Buffett, chairman and CEO, Berkshire Hathaway
- “Rich people aren’t paying enough.” - Bill Gates Sr., co-chair, Bill and Melinda Gates Foundation
- “I’m rich; tax me more.” - Garrett Gruener, founder, Ask.com
- "I don't understand why my tax rate didn't go up.” - Alan C. “Ace” Greenberg, former chairman, Bear Stearns
- “It’s so clear what’s needed. But because of the political debate, which the administration has lost, we are going to follow the wrong policy by extending the Bush tax cuts.” - George Soros, Soros Fund Management
Even Pete Peterson, who funds The Fiscal Times, advocates raising taxes on the rich. Since the debate over the Bush tax cuts seemed to have some billionaires and millionaires begging to be taxed more, maybe it’s time for them to put their money where their mouths are.
So, for the fat cats who are quoted above, and the millionaires and billionaires below who have signed pledges against extending the tax breaks for the wealthy through the organizations Wealth for the Common Good and Patriotic Millionaires for Fiscal Strength, The Fiscal Times has decided to put them to the test. We’re asking them to pay the amount they would have paid to Uncle Sam if the Bush tax cuts had expired. For Mr. Buffett, that’s $4.3 million more, based on his $46 million income from 2006. Not a small chunk of change to help bring down the growing deficit.
According to the IRS, the top 400 earners in the U.S. grossed a whopping $137 billion in 2007 (the latest data available). A household making $50,000 a year is taxed at 17.4 percent, assuming no write-offs. Yet the billionaires were only taxed an average rate of 16.7 percent, amounting to $22.9 billion. If the Bush tax cuts had expired, this would have gone up to about 27 percent or $36.4 billion. The low 16.7 percent rate assumes about two-thirds of the top 400’s annual income is derived from capital gains, which are taxed at 15 percent under the current Bush-era tax code. To break it down: the top tax rate — i.e. anything above $380,000 — would rise from 35 percent to 39.6 percent , the capital gains rate from 15 percent to 20 percent, and the dividends tax rate from 15 percent all the way up to the ordinary income rate of 39.6 percent. So two thirds of $137 would be taxed at 20 percent; one third at 39.6 percent.
To illustrate what’s been paid compared to what’s owed, we have used two simplified metrics to calculate the difference between the rates under the Bush tax cuts vs. if they had expired.
So: $90,420,000,000 would be taxed an additional 5 percent = $4.5 billion. The tax on the remaining third, which includes dividends, would go up about $4 billion.
Total: $8.6 billion. Divided by 400, that’s an average of $21 million each.
That seems like a solid start to deficit reduction. But wait, there’s more. Luckily for them, paying up is easy. Anyone can make a charitable donation to the government through the Treasury Department’s “Gift to Reduce the Public Debt” program, and given our fiscal crisis, the U.S. certainly qualifies as a worthy charity. The best part? It’s tax deductable — the government’s gracious way of saying “thank you.”
Patriotic Millionaires for Fiscal Strength (advocates for an increase in taxes for those who earn more than a million dollars)
CYNDA COLLINS ARSENAULT
Superior, CO
RENE BALCER
Los Angeles, CA
LAWRENCE BENENSON
New York, NY
DANIEL BERGER
Philadelphia, PA
NANCY BLACHMAN
Burlingame, CA
Continued on next page
BRADY BRIM-DEFORE
ST Los Angeles, CA
ROBERT S. BOWDITCH JR.
Brookline, MA
DAVID A. BROWN
Berkeley, CA
MARK BUELL
San Francisco, CA
RICHARD CARBONE
Williamstown, NJ
DOUG CARLSTON
San Rafael, CA
DAVID CHIANG
Las Vegas, NV
BEN COHEN
San Francisco, CA
BILL COLLINS
Buffalo, NY
TOM CONGDON
Denver, CO
ROB DAHLE
Salt Lake City, UT
DAVID DESJARDINS
Burlingame, CA
DOUG EDWARDS
Los Altos, CA
PAUL AND JOANNE EGERMAN
Boston, MA
BOB EPSTEIN
Berkeley, CA
RONALD FELDMAN
New York, NY
JERRY FIDDLER
Berkeley, CA
JOSEPH M. FIELD
Bala Cynwyd, PA
CHRISTOPHER FINDLATER
Naples, FL
CHARLIE FINK
Washington, DC
ERIC FREDRICKSEN
Los Gatos, CA
DAVID FRIEDMAN
Longmont, CO
GAIL FURMAN
New York, NY
RON GARRET
Emerald Hills, CA
BILL GAWTHROP
Yorkville, CA
DAVID GOLDSCHMIDT
Princeton, NJ
JOSHUA GORDON
Las Vegas, NV
GARRETT GRUENER
Oakland, CA
DOUG GULLANG
Wayne, IL
RICHARD GUNTHER
Los Angeles, CA
PAUL HAGGIS
New York, NY
NICK AND LESLIE HANAUER
Seattle, WA
SUZANNE AND LAWRENCE HESS
San Diego, CA
ARNOLD HIATT
Boston, MA
LEO HINDERY, JR
New York, NY
BILL JANEWAY
New York, NY
JOHN S. JOHNSON
New York, NY
MELISSA JOHNSEN
Kirkwood, MO
ROB JOHNSON
New York, NY
WAYNE JORDAN
Oakland, CA
WILLIAM JURIKA
Piedmont, CA
JOEL KANTER
Vienna, VA
JOSHUA KANTER
Sandy, UT
ROCHELLE KAPLAN
Salt Lake City, UT
RAVI KASHYAP
Franklin, TN
JOHN KATZMAN
New York, NY
JOHN KORTENHAUS
Plano, TX
DAVID LAZARUS
Queenstown, MD
ROB AND DIANE LIPP
Los Angeles, CA
ART LIPSON
Salt Lake City, UT
EUGENE LONG
Plymouth Meeting, PA
MICHAEL MARKS
Red Bank, NJ
MARIO MORINO
Rocky River, OH
WIN MCCORMACK
Portland, OR
DENNIS MEHIEL
New York, NY
HERBERT MILLER
Washington, DC
VIBHU MITTAL
Palo Alto, CA
MOBY
New York, NY
WILLIAM J. MORAN
New York, NY
CHRIS NELSON
Barrington, RI
PETER NORVIG
Palo Alto, CA
LARRY NUSBAUM
Phoenix, AZ
FRANK PATITUCCI
Pleasanton, CA
MORRIS PEARL
New York, NY
GREGORY RAE
New York, NY
BERNARD RAPOPORT
Waco, TX
GREAT NECK RICHMAN
New York, NY
JONATHAN ROSE
New York, NY
GUY AND JEANINE SAPERSTEIN
Piedmont, CA
HEIKE SCHMITZ
Palo Alto, CA
DAVID SCHROEDERS
Sarasota, FL
SYBIL SHAINWALD
New York, NY
SUSAN SHORT
New York, NY
CRAIG SILVERSTEIN
Mountain View, CA
MICHAEL STEINHARDT
New York, NY
SANDOR AND FAYE STRAUS
Lafayette, CA
SUNIL TOLANI
New York, NY
PHILLIPE AND KATHERINE S. VILLERS
Concord, MA
SCOTT WALLACE
Washington, DC
DAVID WALKER
Bridgeport, CT
DAVID AND VINITHA WATSON
Oakland, CA
GEORGE ZIMMER
Piedmont, CA
Wealth for the Common Good:
Initial group of signers who would pay the tax:
- Chuck Denny, Jr., retired CEO, ADC Communications, MN
- Arul Menezes, principal architect at Microsoft, WA
- Bernard Rapoport, Chairman Emeritus, American Income Life Insurance Co., TX
- William Collins, former mayor of Norwalk, Conn. & CEO of Minuteman Media, CT
- Todd Achilles, managing member at Balius Ventures LLC, WA
- Jody Wiser, Tax Fairness Oregon, OR
- John Steel, former mayor of Telluride, Colo. & attorney, CO
- Eric Schoenberg, private investor and professor at Columbia University, NJ
- Albert Francke, independent director of companies, NY
- David Krakow, school teacher, DC
- Stan Storscher, legislative director, SPEEA, IFPTE Local 2001, WA
- John Burbank, director, Economic Opportunity Initiative, WA
- Susan Estep, financial advisor, MT
- Kris Alman, former physician and activist, OR
- Jonathan C. Lewis, CEO of Opportunity Collaboration and Microcredit Enterprises, CA
- John Harrington, Harrington Investments, Inc., CA
- Drummond Pike, CEO, Tides Inc, CA
- Roy Ulrich, Attorney and radio Hostels.com, CA
- Michael Sherraden, Center for Social Development, MO
- Paul Grundy, IBM Corporation’s Global Director, IBM Healthcare Transformation, NY
- Sandee Stewart, Sandee Stewart Television, CA
- Rene Balcer, writer and producer, CA
