Do Millionaires Actually WANT to Be Taxed?November 16, 2011
Do millionaires actually want to be taxed? Shockingly, the answer is yes.
According to the Spectrum Group, 68% of millionaires want to see higher taxes on those who earn a million dollars a year in income. Representing this trend is a new group called Patriotic Millionaires, who we’re featuring on the show today. With over 200 millionaire members, Patriotic Millionaires is asking Congress and the President to let the Bush tax cuts for upper income earners expire. This is a new type of conflict over tax policy, whose energy usually comes from those who want to cut taxes for the wealthy, not raise them.
Fights over taxes are as American as apple pie. The Internal Revenue Service’s building on Constitution Avenue in Washington, DC, has a quote above its entrance by the late Supreme Court Justice Oliver Wendell Holmes: “Taxes are the price we pay for a civilized society.” There is a long history of fighting over taxes, on who pays, and how much, and why. The Articles of Confederation largely fell apart because the central authority couldn’t tax, the Boston Tea Party was opposed to taxes on tea, and the Civil War was sparked in part by conflict over tariffs, a way to tax imported manufactured goods.
Rarely, though, is there a group that says “tax us!” Just what is going on? Why is Patriotic Millionaires advocating for higher taxes for themselves? The answer isn’t obvious. Faith in government is at historic lows – why would anyone want to pay more in taxes, since a widely held assumption is that government cannot handle money properly? Perceptions are that the government wastes nearly half of every dollar it takes in. Yet, it is certainly the case that Americans want the wealthy and corporations to pay more taxes, even as they believe that much of this money will be wasted. Even the millionaires feel this way.
Purely for self-interest, you’d think the wealthy would be seeking to protect their own status – this is the position of Grover Norquist, the conservative organizer whose anti-tax pledge has held sway over the Republican Party for years. Certainly the rich consume a far larger proportion of government resources in the form of access to the courts, enforcement of intellectual property protections, infrastructure used to run the economy, access to government contracts, and the Federal Reserve and protection of credit claims and securities markets. And the wealthy own government bonds, so the government pays them a steady stream of revenue.
But an analysis premised solely on greed leaves out an important part of our humanity – our desire to help one another, and a hunger for a just society. We are becoming a country with an upper class that has opportunity, security, and access to education, health care, political and legal rights, and nutrition, as well as a lower class that lives a lifestyle of downward mobility, ill-health and increasing poverty. This has not gone unnoticed. Dramatic inequality carries costs. One could argue that wage stagnation of the middle class over the course of forty years led to our financial crisis, which destroyed a lot of wealth held by the rich. Lower taxes can actually be very costly. It’s not always a financial cost. As just one example, just consider that a poor public health system leads to the spread of epidemics which don’t always discriminate between rich and poor. And then there’s an increasingly morose economy, with less of a consumer economy to which companies can sell and innovate into.
It’s becoming clear to a good portion of the American millionaire elite that this societal structure is unsustainable, that the threat of dangerous levels of inequality simply needs to be addressed. Grover has real opposition, for the first time.
As the Occupy movement frames a question of the 1% versus the 99%, our extractive tax system is right at the center. Do the rich pay enough in taxes? On a more fundamental level, will unfettered greed win out over the deep human need for justice?
As the Patriotic Millionaires join the fray, the answer is no longer so clear.