There was no way of telling whether anti-government zealot Grover Norquist was actually in his downtown Washington office when 150 advocates of fair-share taxation paid him a noontime Tax Day visit yesterday (and two mountain-sized security guards stationed in the building lobby prevented us from finding out).
But the cheering, booing, singing (“Someday Grover Won’t Reign So”) and chanting undoubtedly found their way up to his office window. More importantly, they found a ready audience on the street below, as representatives of labor, advocates for the needy, and proponents of rational tax and budget policies gathered to say “No” to Grover’s infamous “pledge.”
The "pledge" is a promise he’s extracted from half our Congress to never raise taxes on anybody for any reason (war and natural disaster included). Taking Grover’s pledge is an irresponsible act that makes legislating impossible, because it forbids negotiation and compromise, and contradicts the members’ oath of office to serve our nation. The multiple budget crises and ultimate downgrading of America’s credit rating last summer can all be laid at Grover’s door.
So that’s exactly where we laid our milk carton speaker’s stand yesterday, atop which I and three other speakers in turn wielded a bullhorn to address the crowded sidewalk and a phalanx of six TV camera crews, all in the dappled sunlight of a mild April afternoon.
When I spoke, I laid out some of the basic areas of tax unfairness:
Income generated by wealth taxed at half the rate of income earned through work
Very profitable corporations paying nothing in taxes
Basic family necessities taxed, while Wall Street gambling — the cause of the Great Recession— churns on tax-free.
Chuck Collins, a pioneer in identifying and combating wealth inequality, spoke about how our current, out-of-whack tax code perpetuates and extends the nation’s destabilizing wealth gap, making it harder for our economy to grow because there is not enough purchasing power in the poor and the middle class. [MORE]
You usually can’t reverse a bad decision by simply doing nothing, but that’s exactly the opportunity we have at the end of this year.
That’s when the tax cuts for wealthy Americans passed in the early years of the Bush administration are set to expire. We should allow nature to take its course.
In 2001 and 2003, President Bush and the Republican-controlled Congress passed two big tax-cut bills. Though taxes were lowered across the board, the bulk of the benefits went to the wealthiest American households.
Among the breaks that principally served higher-end taxpayers were reductions in rates paid on passive income like dividends and capital gains. It’s those breaks that allow billionaire Warren Buffett to pay a lower tax rate than his secretary, and Mitt Romney — the $200 Million Man — to pay less than 15 percent federal tax on his income.
The world has changed since the early Bush years. But even then, it was understood what a devastating effect losing so much revenue would have on our national budget.
Stand up to Grover Norquist!
Tax Day, Tues. April 17, 2012, 12 noon Grover Norquist’s Office
722 12th Street, NW
Washington, DC 20005
More info: Stopthepledge.org
So the cuts were made temporary: after 2010, rates were scheduled to return to their original levels. But as 2010 came to a close, congressional Republicans refused to extend middle-class tax cuts and unemployment benefits for the long-term jobless unless the high-end cuts were extended. President Obama negotiated a two-year deal; we reach that extended deadline at the end of this year.
When the first big tax cut for the wealthy was passed, in 2001, the federal government was awash in cash: we were running surpluses as far as the eye could see and steadily paying down our debt.
While the prudent thing would have been to divide those surpluses among middle-class tax cuts, smart public investments in roads and schools, and further debt reduction, instead they were spent entirely on tax cuts tilted toward the wealthy.
And even though our fiscal situation was drastically different two years later — we were by then involved in two costly wars — still more breaks for the wealthiest taxpayers were passed.
It’s clear we couldn’t afford these cuts, but did they at least give us the economic expansion and job creation we were promised?
No. Growth in household income and employment were anemic in the years that followed the Bush cuts — even before the Great Recession hit in 2008. The economy did much better in the 1990s, a decade that began with increases in the taxes paid by the wealthy.
Turns out, the wealthy already have more than enough money: even as the broader economy struggles, sales of luxury goods are booming. And the companies wealthy people invest in are sitting on record amounts of cash.
What America needs is more targeted public investment to get our economy moving : in education, transportation, communications, research. We also need to get our fiscal house in order.
Extending the upper-income tax cuts impairs both those efforts. It’s estimated that extending the cuts for the wealthy will cost a trillion dollars over the next decade, ensuring either higher deficits or impoverished public investments.
Let’s by all means extend the tax cuts benefiting families making less than $250,000 a year — which covers 98 percent of American households. But for the sake of our economy, tax giveaways to those making more than that should expire on schedule.
Tues. 12 noon: Spend a Part of Tax Day with Grover Norquist and Corporate-Spy-Turned-Fairness-Crusader Will Rice
On the campaign trail and in the halls of Congress, the tax fairness debate is heating up this spring.
The choices are stark: do we inconvenience billionaires with slightly higher rates, or end nursing home care for millions of seniors? Do we maintain tax breaks for the wealthy passed in the peace, prosperity and surpluses of 2001, or do we allow more equitable rates to return, providing needed revenue for deficit reduction and public investment in economic growth? Who should pay a higher tax rate: a Wall Street financier shuffling money, or an emergency room nurse saving lives?
Want in on the action? Then join the Coffee Party Commonwealth project and 20 other groups this Tax Day, April 17, at noon to celebrate the patriotic duty of contributing to our nation’s strength through the tax system—and protest those who rig that system in favor of the wealthy and powerful, and against average Americans.
We’re gathering in downtown Washington (722 H Street, NW; half a block from Metro Center) outside the offices of the man who has for the past 25 years been more responsible than any other private individual for unfair taxes, underfunded public investments, and unsuccessful government. He’s Grover Norquist, the author and enforcer of an infamous “pledge” signed by half of Congress to never raise revenues under any circumstances, even in the face of war and other national calamity.
This pledge conflicts openly with the only oath an officeholder should take seriously—her oath of office—because in forbidding honorable negotiation and reasonable compromise, it makes effective legislating impossible. The multiple budget crises and resulting downgrade of America’s credit rating last year can be traced directly to Norquist’s stranglehold pledge.
So go to Grover’s on Tax Day, and tell him what you think of his pledge and his fondness for unfair taxes. Bring your sign, bring your voice, bring your outrage!
I grew up in a lower middle class neighborhood in the suburbs of Richmond, VA. My family was comfortable, mostly because my father could build or fix literally anything, not just in the house but in the neighborhood and wider community. I saw and participated in more sweat equity than most youngsters, including helping to build additions to our house and a scratch-built summer home. I worked part-time jobs all through high school and college and was able to pay most of my own tuition because my university, Virginia Commonwealth, was state-supported. At the time, in-state students paid only about 35% of the total cost of their education. This leg-up allowed me to graduate without heavy debt and more quickly give back to my country.
I did this by landing a prestigious civil service position and contributing to national security. In some ways, I've kept up a family tradition of national service. My grandfather, son of a German immigrant, was chief inspector at the Torpedo Factory in Alexandria, VA, during World War II. He put his sixth grade education to work as a GS-13 civil servant in charge of 500 employees. He was awarded for greatly reducing the number of dud torpedoes fired by US submarines, saving countless American lives in the process. According to the caricatures of Left and Right these days, he was an enigma: a Democrat and NRA member, he believed in President Roosevelt's economic Bill of Rights, individual responsibility (to self and society) and hard work. His son, my father, was a life-long Republican and I was raised as such.
My professional career has been in the defense and disaster-management-related fields, working in both the public and private sectors. I've been extremely fortunate: it's been a remarkable ride, filled with opportunities that appeared at just the right time and lead to interesting, meaningful and well-paying work. But even though I’ve benefited from them, I’m disturbed by what I view as distortions in how we value different kinds of work.
My wife is a social worker for a hospice organization. Although she has a more advanced degree than I do and helps people in a very tangible way, she brings home less than half of my current salary. This makes me question what we are willing to invest in as a country. I believe that many public-sector professionals vital to making our country great (teachers, police, firefighters, social workers, and other civil servants) are grossly undervalued and underpaid. I'd like more of my tax dollars to go to people in those public-sector fields. This shift in funding priorities would not only better support the current professionals but it would attract even more talent to those fields. I believe that when we shortchange our public servants, we are really hurting ourselves in ways that will be felt for years to come. We can do so much better!
I had an upper middle class upbringing by frugal parents. After college, I pursued my love of horses, and supported myself by performing manual labor at minimum wage, before eventually returning to school for graduate studies. Bolstered by my relatively privileged childhood and armed with my advanced degree, I have been able to establish an upper middle class life for my own children, secured by an inherited financial “safety net.”
I believe the current tax system is unfair in favoring wealth over work. This is not only inequitable and unjust, it endangers government funding of necessary public investments like roads, public education and economic development.
I would willingly pay more in taxes if those with more income than I have also paid the same effective rate. In addition to raising funds for important public expenditures, the increased tax revenues from people like me and those wealthier than me could be used to reduce tax rates for lower-income Americans.
I was born into a lower middle-class family. My parents—neither of whom attended college—didn’t make much money, so like a lot of Americans, they relied too heavily on credit. Eventually, all that debt became a source of tension and shame in my family. As an adult, I continued my parents’ bad borrowing habits, and as a result, came close to bankruptcy.
I’m starting to pull out of that debilitating debt cycle and become more financially stable, in part because of higher education. But without federal grants, I would not have been able to go to college, even though I first attended a local community college, followed by the most affordable state university. College expanded my mind and increased my employability. The same is true of my siblings, and our academic accomplishments are a source of pride for us.
We are living proof that government spending on higher education is a good public investment. But that investment has been shortchanged in recent years: the main federal grant, which paid nearly the full cost of a four-year public education 25 years ago, now only covers half those costs. Meanwhile, states are cutting public funding of universities and boosting tuition.
More equitable taxation—a system in which, first of all, wealth is taxed like work—would provide more revenue with which to make important public investments such as education. This would, in turn, help close the dangerous wealth gap in our country, as more young people from lower-income families could afford college and lead more prosperous lives.
Wealth has been so successfully kept out of the political debate until recently that there wasn’t even an agreed-upon definition of what constitutes rich. And by that I don’t mean how much wealth, but rather what kind: assets or income? Though related, there’s a crucial, often overlooked distinction between the two, a gap in which stagnant wealth can easily hide.
For most people, from paperboys to CEO’s, financial success is measured by income—how much you make a year. Government follows suit by basing taxes and benefits largely on income. (There are exceptions, such as real estate levies and eligibility criteria for certain public assistance programs.) So it’s not surprising that the current struggle over high-end tax rates focuses exclusively on the income of the taxpayer. Should rates rise for those making over $250,000 a year, or only those making over a million?
But there are wealthy taxpayers who are never included in such debates, whose contribution to the public coffers is never increased by higher rates on income. It’s not loopholes or high-priced tax lawyers that spare them—it’s the form of their wealth. They have a lot of assets but relatively modest income.
I know because I’m one of them. Call us the “stealthy wealthy.”
Assets are not the exclusive domain of the rich. Everyone who owns a house or car whose value exceeds any loan against it has assets. A savings account is an asset. So is a table you can sell for $5 on Craig’s List. And it’s no mystery how assets are originally created. They are in the first instance income saved.
But it’s remarkable how difficult it is to build up substantial assets through savings alone, even with a high income and prudent money management. That’s why most asset growth occurs from investment in vehicles like the stock market that tend to grow in value with time.
Time is a crucial element; compound interest has been called the eighth wonder of the world. Since all our lives are time-limited, the best way to build up assets is to have an ancestor start the process for you—that is, inherit the money. That’s how I, and millions of other lucky folks like me, have done it over the years. [MORE]
Much was rightly made of Newt Gingrich’s recent avowal that he’s “not rich,” despite an annual income of several million dollars and a net worth somewhere between $6.7 and $7.5 million. It’s certainly a stark example of how disconnected the wealthy are from the economic realities of mainstream America.
But the former House Speaker’s finances and his view of them illustrate other important points as well. The first is that the spectrum of riches has become so extended in our country that it’s possible for a multimillionaire to view himself as strictly middle class.
Gingrich poor-mouthed himself as part of his struggle for the GOP presidential nomination against Mitt Romney, a rival he’s trying to define as a Wall Street plutocrat. Since Romney (whose net worth is approximately $200 million) has some 30 times the wealth of Gingrich, looked at comparatively, Gingrich isn’t rich.
But for the purposes of public discourse and policy-making, wealth can‘t be breezily dismissed as all in the eye of the beholder — there should be an objective standard, and that standard should in a democracy be the average citizen. By that yardstick, Gingrich is rich: he stands in approximately the same position financially vis a vis the typical American family — 30 times as wealthy — as Romney does to him.
What’s mind-boggling, though, is that there are individuals who similarly dwarf Romney—multi-billionaires beside whom the former Massachusetts governor must feel like a pauper. These are the hyper-rich, handfuls of whom own more assets than whole, thick percentile slices of the rest of the U.S. population. These are the folks who have benefited so magnificently from the scandalously low tax rates on passive income like capital gains and dividends — rates that have exacerbated our nation’s destabilizing wealth gap and added billions to the national debt.
Also pointed up by Gingrich’s finances is the important, often-overlooked distinction between income and assets. If this distinction were better understood, even high earners would be more likely to support appropriate tax rates on passive income — the kind of money made from other money, rather than by working.
It's only a matter of time before America is comparing Mitt Romney's "15%" tax rate to that of his employees, including his secretary. Romney was born into wealth, is worth hundreds of millions of dollars, yet, as The Atlantic's Derek Thompson reports, pays the same effective tax rate as a family earning $50,000 a year. This disclosure might be bad news for Romney's campaign, but it's good news for America because, with the economic challenges we face, we very much need to have a conversation about tax policy and sound public investment.
Two months ago, I decided to come out of the money closet as someone who is fortunate enough to benefit from the Romney tax rate, but I would prefer to see tax policies that benefit all Americans. I oppose the preferential treatment given passive investment income (dividends, capital gains) versus wage and salary income. It is simply unfair that the tax rate on passive income is capped at 15%, while money earned from working can be taxed up to 35%. That's why, in addition to my music videos, I am organizing a national initiative called Coffee Party CommonWealth. A lot of people have already signed up, and many are contributing their own experiences and ideas to the project. Perhaps you'd like to join us.
I wasn’t born into great wealth, but I come from the leading family of my South Dakota village, founded by my great uncle in the late 1800’s. My grandparents lived in the biggest house in town, another great uncle owned the general store, and my grandmother was postmistress and town clerk (the only paid official in those days). My family was active in county politics.
My forebears were the kind of people who built this country. They came as immigrants and transformed a vast prairie into farms and communities through their collaborative efforts. Some did better than others, but everyone contributed and everyone benefited. When a neighbor became too ill to work, all the surrounding farmers made sure his crop was planted and harvested, that his family had what it needed. That’s the attitude that made the frontier thrive.
By the 1960s, with the nearby city of Sioux Falls booming, local farmers began to sell out to try their luck in town; my family stayed and expanded our holdings. I became an agricultural entrepreneur at a young age: by the time I graduated from high school, I had rented land, leased equipment, taken out and repaid bank loans, hired my friends to work for me and made some nice profits.
Over the next 40 years, I experienced several economic booms and busts, including the farm crisis of the early 1980s that cost my family its homestead; and the Internet bubble that burst at the opening of this millennium and cost me a high-paying job. Despite success in both business and academia (I pursued a PhD in Organizational Psychology), I discovered that the help-thy-neighbor ethos of my hometown was the thing I could really rely on when times were tough.
Through my ups and downs, I was able to see the economy and society from a variety of vantage points. When I first went to college as an undergraduate, fees were reasonable enough (and I had made enough money from farming) that I was able to pay my own way. When I later returned to school, I was dependent on student loans, which—as for a lot of Americans—dogged me for decades. When I was riding high on the tech boom, I raced yachts with millionaires; after the fall, I was homeless.
Our rollercoaster economy—abetted by reckless deregulation and aggravated by tax and spending decisions that reward the already rich while denying opportunities to those trying to make it—has transformed our national culture from one of neighbor helping neighbor to make life better for all, to someplace where everyone’s running scared. Unless something changes dramatically to halt the transformation of our democratic republic into a corporatocracy, I’ll seriously consider leaving the country I love. After all, if I’m going to live in a class-based society, I’d prefer to do so in a nation that has some historical experience with it.
I’ve made a living helping companies pursue what many see as a scourge of the modern economy—downsizing. I’m not ashamed of my work—it’s a legitimate part of the free enterprise system—but it has spurred me to be more active, and to encourage others to be more active, in promoting effective government action to counterbalance the disruptive aspects of capitalism.
I’m a married middle-aged guy who lives in Ohio, an immigrant who moved to the U.S. in the mid-1990s from Canada in search of the American Dream after losing my job. (This was actually a return engagement: my grandfather had moved his family north from the United States.) I grew up in a middle- to upper-middle-class Canadian family. I studied finance and economics at an excellent university, where I graduated third in my class. Because Canada (like most other industrialized nations) believes higher education is a sound public investment, not only did I leave college debt-free, I actually had a net worth of $6,000.
The U.S. has been good to me: I have in fact lived the American Dream. I arrived after years of working without a whole lot to show for it, but since coming to the United States I have been employed by a couple of Fortune 100 companies and have seen my income increase as I have been afforded opportunities I would not have had in Canada.
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by Will Rice, Coffee Party Commonwealth
mer can all be laid at Grover’s door.
But there are wealthy taxpayers who are never included in such debates, whose contribution to the public coffers is never increased by higher rates on income. It’s not loopholes or high-priced tax lawyers that spare them—it’s the form of their wealth. They have a lot of assets but relatively modest income.
Gingrich poor-mouthed himself as part of his struggle for the GOP presidential nomination against Mitt Romney, a rival he’s trying to define as a Wall Street plutocrat. Since Romney (whose net worth is approximately $200 million) has some 30 times the wealth of Gingrich, looked at comparatively, Gingrich isn’t rich.
By Richard Schriever, 
