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Millionaires work hard for the money too

Mary Lou Gillam

Who are those heartless millionaires who don't care about Elise Patkotak's home mortgage? ("Middle class pays a price for the rich," Jan. 5) She wrote, "I don't think millionaires particularly care about this since they have lawyers and accountants making sure they pay less taxes than your average sales clerk."

Where does she get her numbers? How does she define a millionaire? Is it someone earning more than $1 million annually or someone with a net worth more than $1 million or someone retired with vested pension and lifetime health benefits quantified at $1 million or more?

According to the Tax Foundation, in 2008 the top 5 percent of federal individual income taxpayers (adjusted gross income over $160,000) earned 35 percent of the nation's adjusted gross income but paid almost 60 percent of the federal individual income tax. The Tax Foundation reports, "The top earning 5 percent of taxpayers paid far more than the bottom 95 percent" despite the well criticized "millionaires' tax cuts." In terms of sales clerks, I have been one myself, and I am not maligning that career, but they probably were not among the top-earning 5 percent.

The Tax Foundation figures show in Alaska, for 2006, adjusted in 2008, there were 322,369 federal individual income tax returns filed. Alaskans earned about $17.5 billion and paid about $2.2 billion in individual federal income taxes.

However, the top 5 percent of Alaska individual federal income taxpayers, including those pesky Alaska millionaires, paid over $1 billion, about half of the total. About 16,000 Alaska high earners, if shares were equal, paid about $62,500 each. The remaining 300,000-plus Alaskans paid about $3,333 each, if shares were equal.

Alaska's top individual taxpayers paid almost 19 times more. Why should sales clerks feel burdened? The millionaires should feel burdened!

Liberal socialists might say that millionaires not only can afford to pay 19 times more than sales clerks in taxes but that millionaires should give some of their millions to those who have less. Really? Charitable giving is necessary in every community, and I suspect most Alaska millionaires give plenty. Look at the modern Rasmuson Foundation, sprouted from a very large charitable gift from a famous Alaska millionaire. Charitable foundations are not tax breaks for millionaires -- they exist to give away money that someone earned and paid taxes on in the first place, to people or institutions who didn't earn it.

What happens to the rest of a millionaire's money? Are millionaires like Scrooge McDuck, keeping all their dollars heaped in a big room, gleefully counting it daily just before bedtime? Some people pooh-pooh the "trickle-down" economic effect of spending by millionaires, but like everyone else, millionaires spend on home improvements, consumption of goods and services, education, entertainment, and any assortment of budget items.

In tough economic times, even millionaires cut back. Maybe millionaires would like to pay lower taxes to have more discretionary dollars, dollars they have earned and have a right to spend or invest or give away as they see fit. Isn't the tax burden already top-heavy in terms of the portion paid by top earners?

We all know the famous movie line, "Greed is good," and the amended follow-up, "Greed is legal." But outside of the movies and excluding the nefarious, making money is not a bad thing. Making a million dollars generally is hard work or, at the very least, smart work. Many millionaires get up before dawn every day, working well into the night doing whatever they do so well that it earns a million dollars a year. Remember that old saying -- if it were easy, everyone would be doing it.

Don't blame millionaires for the mortgage woes of sales clerks. Many millionaires, in addition to being self-made, are constructive, charitable, creative, enthusiastic, entrepreneurial people who keep producing and paying taxes year after year. Millionaires have paid more than a fair share. Elise Patkotak should show a little respect for the hard work it takes to sustain that level of taxpaying.

Mary Lou Gillam is a housewife and former economist with Alaska Pacific Bank. She lives in Anchorage.


By MARY LOU GILLAM