‘The Moral High Ground’: Morgan Stanley CFO Ruth Porat Says ‘Raise Taxes on the Rich’
The vast majority of millionaires say they want to pay more taxes. Now one of the highest-ranking executives at one of the most powerful Wall Street firms is joining in the call for the richest Americans to part with more of their wealth to help bridge the growing gap between the haves and have-nots.
The Huffington Post reports that Morgan Stanley executive vice president and chief financial officer Ruth Porat, who according to Forbes earned $11,710,425 in compensation in 2010, has come out in favor of raising taxes on the wealthiest Americans.
“We cannot cut our way to greatness,” she asserted at the Economist’s “World in 2012” summit. “The wealthiest can afford to pay more in taxes,” she said. “That’s a part of the deal. That makes sense. I don’t know anyone that doesn’t agree with that.”
“The wealth disparity between the lowest and the highest continues to expand, and that’s inappropriate.”
According to an survey released in October by the Spectrem Group, most millionaires agree with Porat. Fully 68% of millionaires– those with investments of at least $1 million– support higher taxes on those earning $1 million or more annually.
A group of wealthy Americans calling themselves the Patriotic Millionaires is actively campaigning for higher taxes on the rich. Some from the group, whose members include the founders of Ben & Jerrry’s, Ask.com, Men’s Wearhouse, Princeton Review, Google executives and music superstar Moby appeared in Congress last month to make the case for higher taxes on rich folks.
Although rare, the millionaires lobbying for higher taxes on themselves have a very valid point. Many millionaires and billionaires are exploiting tax loopholes and shelters to pay very little or no federal income tax, with some billionaires paying as little as 1%.
According to the Center for American Progress, in 2009 there were 1,470 households with reported incomes of over $1 million that paid no federal income tax at all. The average federal income tax rate for America’s 400 richest people in 2008 was 18.11%, compared to 15.7% for households with incomes ranging from $45,200- $92,400.
Billionaire investor Warren Buffett has been another voice championing higher taxes on the wealthiest Americans, pointing out that the rate at which he is taxed has been “a lower percentage than was paid by any of the other 20 people” in his office. In an August op-ed piece in the New York Times titled “Stop Coddling the Super-Rich”, Buffett wrote:
While the poor and middle class fight for us in Afghanistan, and while most Americans struggle to make ends meet, we mega-rich continue to get our extraordinary tax breaks… These and other blessings are showered upon us by legislators in Washington who feel compelled to protect us, much as if we were spotted owls or some other endangered species. It’s nice to have friends in high places…My friends and I have been coddled long enough by a billionaire-friendly Congress. It’s time for our government to get serious about shared sacrifice.
Buffett’s extraordinary candor inspired what has come to be known as the “Buffett Rule,” an Obama initiative that seeks to alter the nation’s tax code so that “no household making over $1 million annually should pay a smaller share of income in taxes than middle-class families pay.” That sounds eminently reasonable. Conservative politicians have, of course, attacked the proposal as “class warfare.”
“If you think the federal government can spend your money better than you can, then by all means” pay more taxes, scoffed arch-conservative Grover Norquist of Americans for Tax Reform, an Orwellian-named group to whom “reform” is synonymous with “lower”– especially for the rich, who Norquist and his ilk euphemistically refer to as “job creators” while ignoring the glaring fact that those jobs are usually created overseas and slashed here at home.
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