There is a letter being sent this week to Congress, signed by over 400 people, asking Congress not to cut taxes on the wealthy, as is called for by the tax reform bills currently being debated in both the House and the Senate. So, what makes this letter newsworthy? The 400 signers of the letter are some of the wealthiest people in the nation, and they are asking Congress not to cut their taxes.
According to a story in The Washhington Post …
The letter calls on Congress not to pass any tax bill that “further exacerbates inequality” and adds to the debt. Instead of petitioning tax cuts for the wealthy, the letter tells Congress to raises taxes on rich people like them.
They would rather see the government use the funds to invest in education, research and roads that benefit everyone and to ensure that safety net programs such as Medicaid aren’t cut.
The letter specifically criticizes Congress for attempting to repeal the estate tax, which is only paid on assets worth more than $5.49 million ($11 million for couples) that are left to heirs. The House bill would eliminate the estate tax entirely. The Senate plan would double the threshold so people could inherit up to $11 million ($22 million for couples) tax free.
The tax bills under consideration this week would raise the national debt by $1.5 trillion. The national debt as of this writing is $20.5 trillion, though as I checked on the U.S. debt clock it rose by more than $100,000 in the few seconds it took me to check it. It is unthinkable to intentionally raise the debt with no clear plan for its reduction.
The plan, currently being called ‘Trump-onomics’, is nothing more nor less than the old Reagonomics, or ‘trickle down’ economics that I addressed earlier this year in a post titled “It Trickles Up … Not Down!” . The title says it all. Retired American Airlines CEO, Bob Crandall, one of the signers of the letter, hit the nail on the head, saying “I have a big income. If my income gets bigger, I’m not going to invest more. I’ll just save more.” As will all the rest.
So, who are the signers of this letter? They are members of a group called Responsible Wealth, “a network of business leaders, investors, and inheritors in the richest 5% of wealth and/or income in the U.S. who believe that growing inequality is not in their best interest, nor in the best interest of society.” Among the signers are Ben Cohen and Jerry Greenfield, Ben & Jerry’s Ice Cream founders, fashion designer Eileen Fisher, billionaire hedge fund manager George Soros, philanthropist Steven Rockefeller, and Robert Reich, former Secretary of Labour.
The letter reads …
Dear Member of Congress:
We are high net worth individuals, many in the top 1%, who care deeply about our nation and its people, and we write with a simple request: Do not cut our taxes.
As you consider changes to the tax code, we urge you to oppose any legislation that further exacerbates inequality. Tax reform should be, at a minimum, revenue neutral—without using gimmicks like dynamic scoring. We are deeply concerned that revenue loss would lead to deep cuts in critical services such as education, Medicare and Medicaid, and would hamper our nation’s ability to restore investments in our people and communities.
The Republican tax plan would disproportionately benefit wealthy individuals and corporations with provisions including repealing the estate tax, repealing the Alternative Minimum Tax, and slashing the top pass-through tax rate. This proposal would mean wealthy people could pay a lower tax rate than many middle-class families and transfer massive inheritances to their heirs tax-free. Such proposals that benefit the wealthy would exacerbate the current wealth disparity in the U.S. where the top 1% of households hold 42% of the wealth.
We believe the key to creating more good jobs and a strong economy is not tax breaks for those of us who have plenty, but investing in the American people. Our civic institutions that help people meet basic living standards and protect the climate are critical to supporting our prosperity as a nation. Yet, Congress is already shortchanging the investments needed to strengthen our economy, and the Administration and some in Congress are looking for deeper cuts. Current federal funding for non-defense discretionary spending was slashed overall by more than 13% (adjusted for inflation) over the past seven years, leaving many programs severely underfunded. While Congress should be finding ways to increase funding for these vital investments, the Republican tax plan would instead add at least $1.5 trillion in tax cuts to the deficit over the next decade. This would leave us unable to meet our country’s current needs and restrict us in advancing any future investments.
A full repeal of the estate tax alone would lose an estimated $269 billion over 10 years —more than we would spend on the Food and Drug Administration, Centers for Disease Control, and Environmental Protection Agency combined. While these critical agencies help millions of people, repealing the estate tax would benefit just two out of every 1,000 estates. It is neither wise nor just to give wealthy people more tax breaks at the expense of working families, and it would be especially egregious to fund tax cuts for the wealthy by cutting or dismantling programs that help people meet fundamental human needs like healthcare or nutrition assistance.
Instead, we call on Congress to raise our taxes to bring in additional much-needed revenue and to restore investments to vital services. Doing so will help create jobs, strengthen the middle class, and ensure America’s economic success. Under no circumstance should tax reform lose revenue, especially to provide tax cuts to the wealthy and corporations.
This tax bill is not in the best interest of this nation, and it is certainly not in the best interest of We The People. It serves only one very small demographic sector – the extremely wealthy. It is We The People who will pay the price. I am encouraged, however, that there are at least a few in that sector who have a conscience, who remember the purpose of government, the goal of taxation. My hat is off to all signers of this document … now if only enough members of Congress open their eyes and ears to reality, rather than thinking of the donors who are lining their own pockets.
And now, friends, it is time for us to do the same … write or call your representatives in Congress and let them know this tax bill is an abomination and ask them not to support it. Thank you …