Over 400 Millionaires Ask Congress Not To Cut Their Taxes & Focus On Wealth Inequality Instead
In an open letter to lawmakers, over 400 millionaires have asked Congress not to cut their taxes, arguing that doing so would exacerbate income inequality and result in "deep cuts in critical services such as education, Medicare and Medicaid." The letter is primarily aimed at congressional Republicans, who are considering various proposals that would result in the richest Americans paying less in taxes than they do now.
"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," the letter reads. "As you consider changes to the tax code, we urge you to oppose any legislation that further exacerbates inequality."
Wealth inequality has been steadily growing in America for decades, according to economic data from the Urban Institute and elsewhere, but the gap between the rich and the poor has become even bigger in the last few years. Between 2010 and 2016, the share of wealth controlled by the top one percent of earners steadily grew, according to Federal Reserve data, reaching a record-high of 38.6 percent in 2016. During that same period of time, the share of wealth controlled by the bottom 90 percent of earners dropped precipitously — as it has been for several decades.
The signatories of the letter argue that Republicans' tax reform plans, of which there are several, would make wealth inequality even worse than it is now, and cite several components of the legislation that would benefit the richest Americans at the expense of the middle class.
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.
Both House and Senate Republicans have released tax reform legislation. The plans differ in some important ways, and it's impossible to predict with 100 percent certainty what either of their longterm effects will be. But broadly speaking, both the Senate and the House versions of the GOP tax plan would primarily benefit the wealthiest earners and corporations, according to analyses by Vox and the Washington Post. They would each raise the deficit by around $1.5 trillion over the next decade, and according to an analysis by Congress' Joint Committee on Taxation, the Senate bill would raise taxes for 13.8 million middle-income Americans.
The millionaires' letter was signed by the founders of Ben & Jerry's, fashion designer Eileen Fisher, and philanthropist Steven Rockefeller, as well as many unknown but wealthy Americans. It's reminiscent of a 2012 New York Times op-ed in which Warren Buffet, a billionaire, argued that ultra-rich Americans like himself should pay more in taxes, and that such a tax increase wouldn't dampen economic growth. Noting that he paid a higher effective tax rate than his own secretary, Buffet suggested that nobody earning over $1 million a year should pay a lower tax rate than middle-class families; this proposal eventually became known as the "Buffet Rule," and was endorsed by then-President Obama and, later, Hillary Clinton.
"We call on Congress to raise our taxes to bring in additional much-needed revenue and to restore investments to vital services," the millionaires wrote. "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."