Many of the 1% want to pay more taxes
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Chuck Collins is part of the 1 percent -- and he wants to pay more taxes.
Mr. Collins, the great grandson of Oscar Mayer of meatpacking fame, is the co-founder of a group called Responsible Wealth, whose members argue that wealthy people like themselves need to pay higher taxes than they do now.
The Responsible Wealth website says its members comprise more than 700 rich individuals and corporate leaders whose "message is simple, and surprising to some: we can afford to pay more; we don't need any more tax breaks."
The group was started about a decade ago to oppose the Bush administration's plans to reduce the estate tax. Since then, it has spawned other groups, including one called Patriotic Millionaires, which has signed up more than 200 millionaires who oppose extending the Bush income tax cuts on the wealthy and favor raising taxes as part of the current federal deficit negotiations.
One of those signatories, California software entrepreneur Ron Garret, explained his reasons in a promotional video.
"It's important to remember that rich people are not the cause of a robust economy, they're the result of a robust economy," Mr. Garret says. "I personally feel I've gotten to where I am in large part because I was supported by this terrific infrastructure that exists here in the United States. So I didn't have to worry about food or health or drinking water out of the tap or being able to get from A to B. That was all essentially handed to me on a silver platter.
"I really feel like I now have a duty, now that I have the means, to help pay for maintaining that infrastructure for the next generation."
The movement got an extra boost in August when billionaire investor Warren Buffett wrote an essay in the New York Times that said his effective tax rate was too low. At 17.4 percent, he said, it was less than the rates of the people who worked in his office.
Since then, the "Buffett Rule" has become part of President Barak Obama's stump speech. "Warren Buffett's secretary shouldn't pay a higher tax rate than Warren Buffett. There is no justification for it," the president has said again and again.
Mr. Collins has been making the same pitch for years.
After he graduated from Hampshire College with a degree in economics and history, Mr. Collins worked for a non-profit that helped mobile home residents buy their parks as cooperatives.
"Through that process I had an awakening as to how little income a lot of people have, because I tabulated the data on the parks' residents. And then I would look at my financial statements and say, 'Huh, my own net worth doubled in four years, through no great effort of my own.'"
As he has carried out research on the wealthy and taxes since then, he has discovered that "the dirty little secret is that the higher you go up the income scale, the more effective tax rates have gone down. In the late 1960s, the top 1 percent of earners may have paid an effective rate of 50 percent, compared with about 18 percent today."
Mr. Collins thinks many people in the top 1 percent of earners would be willing to pay more taxes, even if it's not a majority.
"Among the powerful and wealthy, you have one sliver that is aggressively using their power to protect their privileges and expand them, and you have another slice, that's our folks--- who I believe may represent a third of the top 1 percent -- who believe that things are out of balance and there is something wrong."
One specific proposal his groups support is a bill to add new tax brackets for the wealthy, sponsored by Rep. Janice Schakowsky, D-Ill. Called the Fairness in Taxation Act, it would add seven new brackets for wealthier taxpayers, ranging from 36 percent to 49 percent.
The top rate would apply to money earned in excess of $1 million. In other words, if someone made $1.2 million, the top rate would apply to $200,000 of that.
Mr. Collins doesn't know whether the views he supports will eventually prevail. He knows he's up against committed opponents.
"The people lobbying to eliminate taxes on the wealthy, those folks have a real intensity. The people who want to get rid of the estate tax, for instance, like the Walton family (which controls Wal-Mart), want to pass on all their wealth without any taxes. It's a great investment for them. They spend a couple million [dollars on lobbying] and they save billions."
The members of Patriotic Millionaires, on the other hand, "see this web around them that's not all about them, and they know that they have received enormous gifts, that great Americans built this infrastructure and they've been able to ride on top of it.
"Of course individual effort makes a huge difference, but many people out there just don't see the matrix that supports that effort."
First Published November 13, 2011 12:00 am