The richest 1 percent of Americans own more than a third of the nation's wealth. A half-century ago the wealthiest Americans paid a top income tax rate of 91 percent. Post-reform, the top rate is 37 percent. Presidential hopeful Elizabeth Warren (D-MA) has proposed eliminating student-loan debt for an estimated 42 million Americans with a wealth tax. Rep. Alexandria Ocasio-Cortez (D-NY) has put forth a 70 percent marginal tax rate on the highest earners.

Increasing the wealthy’s taxes has become not just a political mantra but for some HNW taxpayers a chance to volunteer that they wouldn’t mind paying more in taxes. Is this feeling widespread?

“Psychologically? Somewhat. Economically? Less so,” said Daniel Morris, a senior partner at Morris + D’Angelo CPAs in San Jose, Calif.

According to the Institute on Taxation and Economic Policy, from 2001 through 2018 federal tax changes have reduced revenue $5.1 trillion, with nearly two-thirds of that flowing to the richest fifth of Americans. The cumulative impact on the deficit during this period is $5.9 trillion, including interest payments. By the end of 2025, when tax reform provisions are due to expire, the tally of tax cuts will grow to $10.6 trillion.

Bill Gates and Warren Buffett, to name two of the world’s wealthiest, agree they would willingly pay more in taxes and do not need tax cuts. In a recent survey, about two out of three registered voters said the richest Americans should pay more taxes or currently pay too little; almost three-quarters said the tax system favors the wealthy.

“I’ve never had a client express a desire to pay more in taxes,” said Chris Wittich, a CPA and senior manager with Boyum & Barenscheer in Bloomington, Minn. “With the tax cuts this year, HNW individuals saved quite a bit in taxes. I didn’t have any [wealthy clients] upset about it or who suggested not claiming all the deductions they are entitled to or brought up the tax cuts in a negative light.”

“Some HNW clients were confused about how the tax law was structured, especially in Minnesota, which didn’t conform to the federal changes,” Wittich said, “but especially business owners who received a very substantial tax cut were quite pleased with the new tax law.”

HNW clients already understand that capital gains are taxed at preferred rates over earnings and many have already received various benefits from reform such as the Trump incentives, the permanent capital gains rate reductions, use of non-cash based deductions, Morris added.

With an eye to leveling the field, Americans for Tax Fairness has suggested taxing income from investments similarly to how work income is taxed and capping deductions at 28 percent for the wealthiest Americans.

“Most HNW people understand the political realities of what I call the ‘Warren Buffett Conundrum,’ where investment earnings are regularly taxed at substantially lower rates than earned income. Even Warren Buffett, however, doesn’t appear to be a taxpaying volunteer. Easy to promote a concept of fairness and more difficult to practice. Even my most wealthy customers desire to harvest the most of what they make,” Morris said.

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