Facebook Twitter RSS

Some top earners say they can and must pay more

Date Published: 04/21/2011

Author: Dane Smith, President

ST. PAUL LEGAL LEDGER CAPITOL REPORT

Lots of affluent citizens know they have prospered from our public-private system, and they are willing to pay a fairer share for public investments

Not long ago, in a richly appointed corporate office with a spectacular view of the Twin Cities, a leading Minnesota businessman confided to me that the redistribution of wealth and income toward the top was becoming so unfair that he actually had begun to worry about the political stability of our society.

Pressed further, he talked about his fears of a general breakdown of law and order, something on the order of pitchfork-bearing mobs gathering at the gates of the gated communities.

This particular job creator had signed a full-page newspaper ad, joined by some 200 other high-income Minnesotans, declaring in bold headlines that “WE CAN AFFORD TO PAY MORE STATE TAXES,” adding “WE CAN’T AFFORD NOT TO.” The text of the 2006 ad detailed how taxes and public investments – in schools and colleges, hospitals, transportation and infrastructure, and economic security for the elderly – actually would be good for their businesses in the long run, and more fair, to boot.

Those successful Minnesotans were right then and their words ring even truer now. The huge and unsustainable state and federal income tax cuts for top-enders that we enacted during boom years – and the current intransigence of antigovernment political forces opposed to restoring the previous rates – have resulted in chronic and worsening federal and state budget crises as well as a weaker economy.

The decline wrought by this irrational taxophobia reached a new level of alarm this week, with fresh signs from the bond market that our national credit ratings are at risk. Bond rating houses, as a rule, tend to upgrade the credit status of nations and states that increase taxes and show a resolve to raise the money to pay their bills.

The unappreciated and largely unreported fact is that a large and growing share of conscientious affluent Minnesotans and Americans either want to pay more, or recognize that it’s necessary.

Led by super-successful and responsible voices including Warren Buffett and Bill Gates Sr., groups on the national scene are proliferating and spreading the word. They include Wealth for the Common Good, Americans for a Fair Estate Tax and a new organization with a very appealing label, Patriotic Millionaires for Fiscal Strength.

Polls in Minnesota consistently show strong overall public support for more progressive tax increases. And from a national perspective, we know there is actually broader support among top-enders for letting their state and federal tax cuts expire. Exit polls immediately after the 2008 election showed that a majority of the highest-income voters actually opted for President Barack Obama, despite his clear and oft-repeated promise to raise their taxes, which was a central issue of the presidential campaign.

Examine the websites of the groups that are pushing for restoration of fairness, and three persuasive points argue for abandoning the antitax dogma that has given us the lowest income tax rates in modern times.

These are problems of biblical proportions, and historical and biblical appeals are appropriate.

Massachusetts Gov. Deval Patrick pinpoints the “generational responsibility” of our forebears, the ancestors who “built great public institutions and universities and the federal highway system; that created the social safety net we so worry about today; that launched the modern civil rights movement. They saw their stake not just in themselves, but in their neighbors; not just in their times, but in tomorrow. They bore their generational responsibility. Now, so must we.”

And Gov. Mark Dayton, a descendant of one of Minnesota’s wealthiest families, hit this perfect note in his State of the State address, in a direct appeal to those at the top.

“My father’s favorite quote was from the Bible. ‘To whomsoever much has been given, of him shall much be required.’ You have achieved so much. I ask you, please, to help your state, your children and grandchildren, your friends and neighbors, to regain what you and I have enjoyed so much and benefited from so greatly during our lives here in Minnesota.”

###

A version of this column originally appeared in the St. Paul Legal Ledger Capitol Report on Thursday, April 21, 2011.

Dane Smith is the president of Growth & Justice, a progressive public policy organization that promotes statewide economic growth for Minnesota through smarter public investments in human capital and infrastructure.


Support Our Work

Web Development by Creative Arc, a Minneapolis Web Design firm.