President Obama has made it clear that he wants to erase the Bush-era tax cuts for the highest earners in the country, even as he preserves the tax cuts for middle- and working-class Americans.
There are plenty of Republicans and even some Democrats who are ready to pounce on this proposal. They’ll say it will hinder economic recovery, even though the change will only affect about 2.5 percent of all U.S. taxpayers.
As someone who would pay those higher taxes, I support Obama’s plan. By effectively raising the tax rate for the wealthiest Americans, Congress could generate as much as $43 billion in new revenue, every year.
We urgently need to find ways to pay for long-deferred investments in education, infrastructure, and other essential parts of what keeps America going. These public goods all require revenue, and right now our government is giving money back to those of us that need tax cuts the least.
Because my own family’s good fortune came out of a century of public investments, it makes sense to me that a substantial part of our wealth should be reinvested for the public good.
In 1900, my great-great-grandfather co-founded a mining and construction business in Utah. Shortly after that, the company obtained a number of federal contracts for large infrastructure projects out west, including railroads, bridges, and dams. Perhaps the most famous of these was the Hoover Dam–the largest construction project the U.S. government had ever tackled.
Our family business relied on existing infrastructure like roads and bridges to transport materials. It benefited from government grants intended to spur additional development. We also benefited from our nation’s remarkable system of property laws, deeds, patents, and mortgage systems.
Our business was built upon a commonwealth of public resources, scientific knowledge, and shared institutions. Those of us who have disproportionately benefited from these investments have a corresponding patriotic responsibility to reinvest in the common good.
Some critics worry that increasing taxes on America’s wealthiest citizens will impede growth. But they ignore that tax rates on the wealthy have dramatically fallen over the last six decades.
My grandfather taught his three children that their earnings should be distributed in thirds: A third for charitable community organizations, a third for taxes, and a third for themselves. But today, many wealthy Americans pay far less than a third of their income in taxes, because tax rates have been slashed and the income from capital gains is taxed at much lower rates than income from wages.
That’s among the main reasons we must change our tax code, shifting obligation to those of us with the greatest capacity to pay.
During the past 30 years, however, federal policy has moved in the opposite direction. We have seen a great tax shift in this country, off the wealthy and onto the middle and working class. Reduced income taxes at the top, a shrinking capital gains tax, the diminished estate tax—these policies have contributed to an increasingly unequal society where today the richest 10 percent of families own two-thirds of the wealth.
That’s why, along with hundreds of other members of Wealth for the Common Good, a network of wealthy individuals and business leaders, I have signed a petition asking Congress and President Obama to reverse the irresponsible 2001 and 2003 tax cuts on households with incomes over $235,000. It would be a crucial first step to rebalancing our tax code.
The myth of the “self-made businessman” persists in this country. Of course my family members worked hard. But without many public investments, our family enterprise simply wouldn’t exist. I support higher taxes on the wealthy to continue this tradition of public investments. It will give other families the opportunity to succeed the way we have.