On April 11, President Barack Obama gave a speech in Washington urging Congress to pass the Buffett rule.
“We can settle for an economy where a shrinking number of people do very, very well and everybody else is struggling to get by,” he said, or the U.S. can build an economy where “everybody’s playing by the same set of rules.”
To illustrate his point, he motioned to four smiling people behind him, all millionaires who say they welcome the proposed law, which would require high earners to pay a minimum federal income-tax rate of 30 percent. Republicans joked that Obama had managed to find the only four millionaires in the U.S. who want to pay more taxes, Bloomberg Businessweek reports in its April 23 issue.
As it turns out, there are at least 200 more like them, all members of Patriotic Millionaires for Fiscal Strength, a loose gathering of mostly liberal-leaning executives who say they’d happily write bigger checks to the Internal Revenue Service.
Its ranks include Ben & Jerry’s co-founder Ben Cohen; retired Google engineer Frank Jernigan, one of about a dozen members who made their fortunes at the company; actress Edie Falco, and T2 Partners fund manager Whitney Tilson.
Though Obama left the impression that they’re part of a spontaneous national uprising of millionaires demanding higher tax rates, the group is an offshoot of the Agenda Project, an advocacy group in New York that specializes in attention-grabbing publicity campaigns.
Erica Payne, Agenda’s founder and a former Democratic Party fundraiser, says the point of Patriotic Millionaires is to create “a stir.” Payne, a Wharton School graduate, says she hopes to recruit “garden-variety millionaires” from all 50 states to help ensure taxes remain a big election issue, especially since Republicans have made it clear the Buffett rule -- named for billionaire investor Warren Buffett, who says he pays a lower tax rate than his secretary -- is dead this year.
“Politicians are the least important part of politics,” Payne says. “We felt political pressure was forcing a decision by politicians that was not the right decision for the country.”
Patriotic Millionaires got its start in late 2010 when Payne, former Google engineer David desJardins and Guy Saperstein, a California venture capitalist, enlisted wealthy friends to protest extending Bush-era tax cuts for the wealthy. When the Buffett rule started getting attention last year, the group rallied behind it.
Investors Over Workers
Payne says Patriotic Millionaires didn’t join forces with Obama until the White House asked if some of its members would be willing to stand behind the president while he delivered his Buffett rule speech.
Saperstein says he may not pay any taxes because of carried over losses, even though he made more than $7 million last year in investment income.
“Why should we favor investors over working people?” he says.
Tilson, the fund manager who was one of the four millionaires on stage with Obama, agrees. Everyone knows the government has to raise revenue to reduce the deficit, he says. “Most of it has to come from spending cuts, but a meaningful chunk has to come from tax increases.”
He concedes he’s in the minority among his friends and clients. The investors he manages “are all millionaires,” he says. “I can imagine some of them might take a dim view of me advocating for this.”