A CALL TO ACTION: A LETTER IN SUPPORT OF A WEALTH TAX
JUNE 24, 2019
TO: 2020 Presidential Candidates
We are writing to call on all candidates for President, whether they are Republicans or Democrats, to support a moderate wealth tax on the fortunes of the richest 1/10 of the richest 1% of Americans — on us. The next dollar of new tax revenue should come from the most financially fortunate, not from middle-income and lower-income Americans.
America has a moral, ethical and economic responsibility to tax our wealth more. A wealth tax could help address the climate crisis, improve the economy, improve health outcomes, fairly create opportunity, and strengthen our democratic freedoms. Instituting a wealth tax is in the interest of our republic.
Polls show that a moderate tax on the wealthiest Americans enjoys the support of a majority of Americans — Republicans, Independents, and Democrats. We hope that candidates for President will also recognize the force of the idea and join with most Americans in supporting it. Some ideas are too important for America to be part of only a few candidates’ platforms.
The concept of a wealth tax isn’t new: Millions of middle-income Americans already pay a wealth tax each year in the form of property taxes on their primary form of wealth — their home. The kind of moderate tax on the richest 1/10 of 1% that we support just asks us to pay a small wealth tax on the primary source of our wealth as well.
Several candidates for President, including Senator Elizabeth Warren, Mayor Pete Buttigieg, Representative Beto O’Rourke, Senator Bernie Sanders, Representative Tim Ryan, and Tom Steyer, are already supportive of the idea. The first specific candidate proposal, introduced by Senator Warren, would provide millions of families with a better shot at the American dream by taxing only 75,000 of the wealthiest families in the country. The proposal is straightforward: It puts in place a tax of 2 cents on the dollar on assets after a $50 million exemption and an additional tax of 1 cent on the dollar on assets over $1 billion. If you have $49.9 million or less you are not paying the tax. It is estimated to generate nearly $3 trillion in tax revenue over ten years.
This revenue could substantially fund the cost of smart investments in our future, like clean energy innovation to mitigate climate change, universal child care, student loan debt relief, infrastructure modernization, tax credits for low-income families, public health solutions, and other vital needs.
That a moderate tax on a minuscule number of Americans could raise so much revenue simply reflects historic levels of wealth among America’s richest. The top 1/10 of 1% of households now have almost as much wealth as all Americans in the bottom 90%. Those of us signing this letter enjoy uncommon fortunes, but each of us wants to live in an America that solves the biggest challenges of our common future.
We are in favor of a wealth tax for at least six key reasons:
A Wealth Tax Is a Powerful Tool for Solving Our Climate Crisis. In addition to better rules on carbon pollution, more American investment is needed now to tackle climate change. This could both accelerate innovation and speed implementation of solutions that create a clean energy economy and a low-carbon future. A wealth tax asks those of us who have benefitted most from our economic system to help fix one of its most devastating and fatal flaws.
A Wealth Tax Is an Economic Winner for America. It would be a powerful instrument for greater economic growth and success. Reinvested both across America and among those less wealthy than ourselves, a wealth tax would extend prosperity. Along with resources for climate crisis investments, America needs a revenue source for other public investments in addition to private investment and philanthropy. Greater public investment in America’s aging infrastructure, child care, and education will not only solve important problems but will also increase productivity in the long run and promote sustained and broad-based economic growth. Easing student debt would boost entrepreneurship and homeownership rates, which have significantly declined as the costs of higher education have skyrocketed. A wealth tax could help with innovation and job creation — America’s entrepreneurial economy, despite its many successes, needs strengthening. Put simply, a wealth tax would strengthen the American economy in ways that benefit all Americans.
A Wealth Tax Will Make Americans Healthier. America’s most experienced public health experts point out that more resources are needed for major public health challenges like cardiovascular disease, the nation’s top killer, and high levels of opioid addiction. High rates of inequality have been linked to lower life expectancies. The wealthiest Americans are now estimated to live up to 15 years longer than the poorest Americans, and individuals living in disadvantaged communities are more likely to die before the age of 75, regardless of their income level. With a modest tax on the most wealthy families to fund investments creating opportunities for lower-income and middle-income families, we can improve public health outcomes and extend life expectancies.
A Wealth Tax Is Fair. A wealth tax would help close the large gap in effective tax rates between very rich families and everyone else. Warren Buffett has pointed out that he is taxed at a lower rate than his secretary. The top 1/10 of 1% are projected to pay 3.2% of their wealth in taxes this year, while the bottom 99% of households are projected to pay 7.2%. This imbalance creates resentment and makes it harder for working-class Americans to achieve social mobility. Taxing extraordinary wealth should be a greater priority than taxing hard work. The most fortunate should contribute more.
A Wealth Tax Strengthens American Freedom and Democracy. It would slow the growing concentration of wealth that undermines the stability and integrity of our republic. Countries with high levels of economic inequality are more likely to concentrate political power and become plutocratic. The founders of America knew this, and feared that an economic elite might become ensconced as leaders and erode the effectiveness of the republic. Today, major policies seldom come to pass without the prior support of wealthy elites or other wealthy interests. Division and dissatisfaction are exacerbated by inequality, leading to higher levels of distrust in democratic institutions — and worse. That’s one reason we don’t view a wealth tax as a sacrifice on our part: We believe instituting a wealth tax would lead to political, social, and economic stability, strengthening and safeguarding America’s democratic freedoms.
A Wealth Tax Is Patriotic. In our republic, it is the patriotic duty of all Americans to contribute what they can to the success of the country, and the wealthiest are no exception. Others have put far more on the line for America. Those of us in the richest 1/10 of the richest 1% should be proud to pay a bit more of our fortune forward to America’s future. We’ll be fine — taking on this tax is the least we can do to strengthen the country we love.
What about the arguments against a wealth tax? They are mostly technical and often overstated.
Some raise important questions about implementation and enforcement. But as the Warren proposal shows, we can limit potential evasion and reduce tax cheating by building on lessons learned in the United States and other countries. Others question whether assets owned by many ultra-millionaires and billionaires, including private equity and art collections, can be accurately assessed for tax purposes. But such assets are frequently valued — upon resale, donation, bankruptcy, divorce, or death.
Some have argued that a federal wealth tax is unconstitutional. But here again, some of the country’s most prominent constitutional scholars — including two former heads of the Office of Legal Counsel at the Department of Justice — have argued convincingly that a wealth tax is constitutional.
Far-reaching policy proposals nearly always require considerable effort to iron out complexities — and that effort has always been made when the cause is important enough. The process of instituting a wealth tax would in itself likely improve the measurement tools to facilitate implementation.
Those of us who have signed this letter believe it is our duty to step up and support a wealth tax that taxes us. It is a key to both addressing our climate crisis, and a more competitive, stronger economy that would better serve millions of Americans. It would make America healthier. It is a fair way of creating opportunity. And it strengthens American freedom and democracy. It is not in our interest to advocate for this tax, if our interests are quite narrowly understood. But the wealth tax is in our interest as Americans.
That’s why we’re joining the majority of Americans already supporting a moderate wealth tax. We ask that you recognize its strong merit and popular support, and advance the idea to tax us a little more.
Signed: Louise J. Bowditch, Robert S. Bowditch, Abigail Disney, Sean Eldridge, Stephen R. English, Agnes Gund, Catherine Gund, Nick Hanauer, Arnold Hiatt, Chris Hughes, Molly Munger, Regan Pritzker, Justin Rosenstein, Stephen M. Silberstein, Ian T. Simmons, Liesel Pritzker Simmons, Alexander Soros, George Soros, Hansjörg Wyss, and Anonymous