Some members of the Patriotic Millionaires inherited their wealth or accumulated it from highly paid employment or investments that did very well. I, on the other hand, earned much of my own wealth through my knowledge of the American tax system and the advantages it gives to wealthy investors.
By using extremely favorable tax laws, I was able to postpone paying taxes on the profitable sale of real estate that I owned by simply trading those gains into other real estate. I was also able to shelter income from my employment from taxation by claiming depreciation deductions on real estate that I owned, even if that depreciation didn’t actually cost me any out-of-pocket funds. By claiming these “paper losses,” I kept a significant portion of my actual income tax-free.
While I don’t know how many other millionaires in the group took my exact path, I’m not the only one who has the tax code to thank for my wealth. Almost everyone who has a significant amount of wealth in America has at least on some level benefited from the preferential treatment our tax code gives to the rich.
Other members accumulated wealth by using special tax breaks for depletion, investment tax credits, lower taxes on investment income than for earned income, and for the extremely favorable tax treatment of the income that hedge fund managers earn called “carried interest.” These tax breaks are complicated, obscure, and fly under the radar of the majority of taxpayers in this country, but you can bet that most wealthy people know exactly which tax breaks they rely on, and they’re willing to fight to preserve them. Or, more accurately, spend to preserve them. Our election system incentivizes wealthy citizens to support representatives who return the favor by passing extremely favorable tax laws for the rich and powerful, and it’s left us with a tax code that gives huge breaks to the wealthy while doing little for the middle class and poor.
The Patriotic Millionaires think we should do things differently. Why do our members want to pay more to the government, which might spend it on things we don’t agree with? Because we know that the great diversity of needs and issues that our government is charged with providing requires collective sacrifice, and that our contribution is a requirement of living in civilized society, whether or not we agree with 100% of the ways the money is used.
We cannot pick and choose what to support with our taxes — we can vote for representatives who agree with our values, but the fact that we’re wealthy should not give us any more right to control where the money goes than anyone else. And in the end, we all want pretty similar things. Taxpayers demand protection by police, firefighters, and the military. We demand clean water and air. We depend on government protection from disease, infection, pestilence, and floods. We demand safe highways and bridges, air traffic controllers, sewage treatment plants, dams, levies, schools, and education.
No matter what issue you care most about, everyone must pitch in to supply the funds for all of these demands. But our current tax laws don’t ask enough from the people who have the most to give. It requires workers to pay significantly higher taxes than we, the owners of wealth, generally pay. We need to close the loopholes that allow the wealthy to avoid paying their fair share, and perhaps most importantly, we need to start taxing investment income MORE heavily than earnings. There’s no reason an idle millionaire should pay a lower tax rate on passive investment income than a normal working person pays on money they actually worked for.
I often get asked why we members of Patriotic Millionaires joined together to change the tax laws to pay higher taxes when we could all just voluntarily pay extra to the government. The simple answer is that doing so wouldn’t be enough to make the change we want to see in this country. We are a tiny fraction of the wealthy in this country, so our voluntary taxes would not begin to make a difference on any scale that matters. We need to address this on a systemic level so that working people have just as much of a chance to succeed as people who already have wealth.
Personally, I feel embarrassed and ashamed that I get such favorable tax treatment. I don’t need it — I can afford to pay the same (or higher) tax rates that workers pay — and I don’t want it. It is indefensible that we, who don’t need the tax breaks, get them as a result of the greed of some of our colleagues who have “gamed the system” by “buying” representatives who will lavish tax breaks on us. Workers need to learn about these tax laws and demand that they be repealed and replaced with equitable laws that require all citizens who can afford to pay taxes actually do pay them, irrespective of income source and at comparable rates.
I don’t want to add to my personal net worth at the expense of my fellow Americans. I can pay more, I should pay more, and I reject the false concept that we wealthy Americans are the job creators who will leave the country with our money if we’re asked to pay our fair share. Who wants to live in a country filled with angry, resentful, desperate people? Wealth does not trickle down — it rises to the top, vastly assisted by special tax laws that exempt or reduce the tax bills of those most able to pay to support our country.