More than 400 millionaires tell US Congress: Don't cut our taxes

Business magnate George Soros is among those who signed a letter which calls on the US Congress to not to pass any tax bill that adds to the nation's debt.
Business magnate George Soros is among those who signed a letter which calls on the US Congress to not to pass any tax bill that adds to the nation's debt.PHOTO: REUTERS

WASHINGTON (WASHINGTON POST) More than 400 American millionaires and billionaires are sending a letter to Congress this week urging Republican lawmakers not to cut their taxes.

The wealthy Americans, which include doctors, lawyers, entrepreneurs and CEOs, say the GOP is making a mistake by reducing taxes on the richest families at a time when the nation's debt is high and inequality is back at the worst level since the 1920s.

The letter calls on Congress to not to pass any tax bill that adds to the debt and that "further exacerbates inequality". Instead of cutting taxes of the wealthy, the letter tells Congress to raises taxes on rich people like them.

It is being released publicly this week, as Republicans debate legislation which would add US$1.5 trillion (S$2 trillion) to the debt to pay for widespread tax cuts for businesses and individuals.

The letter was put together by Responsible Wealth, a group that advocates for progressive causes.

Signers include Ben & Jerry's Ice Cream founders Ben Cohen and Jerry Greenfield, fashion designer Eileen Fisher, billionaire hedge fund manager George Soros and philanthropist Steven Rockefeller, as well as many individuals and couples who are not household names but have at least US$1 million in assets.

"I think a tax cut is absurd," said Robert "Bob" Crandall, a former American Airlines CEO who now lives in Florida and added his name to the letter.

Republicans are "saying we can't afford to spend money, but we can afford to give rich people a huge tax break. This makes no sense," Crandall said.

Cutting taxes on businesses and individuals is the centerpiece of "MAGA-nomincs," President Donald Trump's plan to spur more growth and jobs in the country.

The House and Senate have unveiled tax plans this month that they hope to pass and get on the president's desk by Christmas.

While the House and Senate bill have substantial differences, both bills cut taxes, on average, for many millionaires and billionaires. The Senate bill even cuts the top tax rate people couples earning over US$1 million (and individuals earning over US$500,000) pay from 39.6 per cent to 38.5 per cent.

The White House and congressional Republicans argue that everything in the bill is geared towards pumping more investment into the US economy.

They say the money that corporations and the rich save on their taxes would likely be used to start new companies or build new factories.

"I don't believe that we've set out to create a tax cut for the wealthy. If someone's getting a tax cut, I'm not upset that they're getting a tax cut,"

Gary Cohn, the head of Trump's National Economic Council, said in an interview with CNBC last week.

"Everything in our tax system is meant to encourage investment."

But signers of the Responsible Wealth letter disagree, arguing that corporations are already at record profit levels and wealthy people don't need more money. They would rather see the government use the funds to invest in education, research and roads that benefit everyone and to ensure safety net programmes like Medicaid aren't cut.

"I have a big income. If my income gets bigger, I'm not going to invest more. I'll just save more," said Crandall, who is retired.

The letter specifically criticises Congress for attempting to repeal the estate tax, which is only paid on assets worth over US$5.49 million (US$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 US$11 million for individuals (US$22 million for couples) tax free.

At the moment only 5,000 families a year end up paying the estate tax. Under the Senate plan, that would drop to just 1,800 families, according to a report by the Joint Committee on Taxation, Congress' official non-partisan estimators.

"Repealing the estate tax alone would lose an estimated US$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," the letter stated.

Responsible Wealth is a liberal organisation that teamed up for Voices for Progress on this campaign. Most of the signers of the letter come from California, New York and Massachusetts, states that went for Hillary Clinton in the last election.

Former Labor Secretary Robert Reich, a backer of Bernie Sanders, also signed the letter. They hope to remind Congress that not everyone is clamouring for lower taxes. Several signers have already visited Capitol Hill to meet with Republicans and Democrats, especially from their home states.

"This has to be one of the few times members of Congress have been visited by people saying don't give me a tax cut," said Mike Latham, who inherited sizable wealth from his family's paper mill in upstate New York and now directs the Responsible Wealth project at United for a Fair Economy.

"Wealthy people are saying it themselves: we don't need a tax cut."