Why Some Millionaires Want Their Tax Cuts to End

Seventh Generation CEO and founder Jeffrey Hollender Andrew H. Walker / Getty Images for Sunshine Sachs & Associates

Although Congress has decided to hold off on voting on the fate of the Bush-era tax cuts until after the November election, the delay has not slowed down the efforts of some wealthy millionaires. The 700 or so members of a Massachusetts-based group called the Responsible Wealth Project have spent the last several months courting politicians to make their case, arguing that the country simply cannot afford to keep tax cuts for the wealthiest Americans and that, as billionaires and millionaires, they hardly need that cash. NEWSWEEK’s Nancy Cook recently spoke with one of the group’s members, the cofounder of Seventh Generation, Jeffrey Hollender. Hollender talked about his disdain for the current tax code, the need for more compassion among the wealthy, and the way being rich often seems relative. Excerpts:

NEWSWEEK: So why do you oppose extending the tax cuts for families that make more than $250,000 a year?

Hollender: This is a time when the wealthiest Americans need to give back to the country. I know this well, as someone who has been financially successful, the vast array of benefits available to me that are not available to other people. It’s a moral question, but it’s also equally economic, because I don’t necessarily need everyone to agree with my morals and my perspectives. We can agree that the country can’t afford the tax cuts. This is the absolute wrong time, because where is that money going to be made up from? It’s going to come from social services. The government will have to reduce expenses, probably by providing fewer benefits for less affluent Americans. I can’t remember the government dealing with economic problems in a way that has inflicted pain on me, but that’s the not the case if you’re living below the poverty level.

What kind of organizing has the group you’re involved with been doing?

As with any kind of legislation, it is hard to maintain the same level of pressure on the government. Politicians’ attention drifts, but a few weeks ago, I was in Washington, D.C., visiting with senators and congressmen as part of a business group to discuss a broader range of issues. We’ve seen the Republicans back off on continuing the tax cuts for the wealthiest Americans at the moment, but who knows what happens after the midterm elections if they pick up more seats?

In this climate, with the growing gap between the rich and the poor, do you feel like rich people are afraid to openly talk about their views on the tax cuts, especially after a University of Chicago professor blogged about feeling cash-strapped and was then widely criticized for his views?

I’m an opinionated person on many issues, but there is no issue that stirs greater passion than issues that have to do with money. I got more threatening e-mails than anything I have ever spoken about in my life after speaking out against the tax cuts. There is one group who philosophically say, “The last thing I want to do is to give any more money to the government for any reason.” Those are people who may or may not be affluent or object to big government, but you know, somehow sadly, there is another group of people for whom no matter how much they have, they never think they have enough. They always think they need to have more. It’s a sad state in this country when those of us who are so privileged fight for more rather than fight for those among us who have so little. People tell me to keep my hand out of their pocket—that they don’t want me giving their money away—but letting the tax cuts expire is a small step to what’s required for a more equitable wealth distribution. Why should I be able to deduct my second mortgage, for instance? If you have two houses, do you need a deduction on your second house? There are so many benefits the wealthy have.

What else would you like to see the government do to close the gap between the poor and the wealthy?

The tax code is a disaster. It needs to be simplified. There is a huge amount of taxes collected out of people’s paychecks. Unfortunately, we tax too much of the good stuff, like income, and not enough things that pollute our air or that cause many of the problems we face. We have an economic system that encourages bad things and bad behavior. Why should organic food cost more than nonorganic food? If you want to create that kind of negative impact, you should have to pay for the right to do that. I really think that we send very confusing messages to the marketplace and that makes it hard for people to do the right thing.

If the tax cuts do expire, where would you like to see that money go?

There are two answers to that question. One, we need to make investments in this country to make us more competitive and to take better care of our citizens. We need to invest in things like infrastructure, so everyone has access to high-speed Internet and so we also can take better care of the poorer among us. But the other issue of equal importance is that we as a country have lost our way. In a global economy you need to have an economic strategy like China. You can’t do everything well. You have to say, “We’re going to be the leading manufacturer of global technology.” We need to decide in this country what we’re going to be the best at and invest in education and invest in starting business in those sectors that we know over the next decade will create jobs. But now, it’s almost taboo to talk about government discussing a plan for our economy. We need to make strategic long-term investments.

Do you think you approach this subject from a different vantage because you both grew up with money and then created your own wealth as well? Do you think the self-made wealthy may have a different experience?

I felt so uncomfortable about my family’s money that I left home when I was 17. It’s a possible viewpoint if you came from a much less affluent background, I could see someone having a more hard-edged attitude about money—like, “I made it all myself, so let me keep every penny I can.” [But] I would hope that someone who came from a less affluent background would have more compassion. The challenge is that I don’t believe in starting out poor or starting out rich. A lot of it is luck, and we’re standing on the backs of those who came before us.

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