After Warren Buffett called for the federal government to raise taxes on the super wealthy this week, Republican presidential candidate Michele Bachmann had a suggestion for the billionaire: Send any unwanted money to the U.S. Treasury.
“Mr. Buffett, write a big check today,” Bachmann said. “There’s nothing you have to wait for.”
The Minnesota congresswoman is correct. The federal government has had a law on the books for 50 years that allows anyone to open up his checkbook, write out a donation payable to the Bureau of the Public Debt, and send it to a post office box in Parkersburg, W.Va. — or make an online payment at www.pay.gov.
Through the first three quarters of the current fiscal year, Americans had donated about $2 million to the fund — compared with $2.8 million in donations for all of fiscal 2010.
That amounts to roughly one ten-thousandth of a percent— that is, 0.0001% — of the federal debt.
The money is set aside and ultimately used to pay the principal on maturing Treasury bills that are issued as debt to finance government operations, according to McKayla Braden, spokeswoman for the debt bureau.
“We send everybody a thank you,” Braden said, noting that the agency gets more donations whenever there’s a public crisis like a natural disaster or the summer deadlock than over raising the debt ceiling.
But millionaires and billionaires who, like Buffett, support higher taxes on the super-rich, say voluntary donations won’t solve the country’s debt problems. Even Buffett’s fortune of approximately $50 billion amounts to less than half a percent of the total.
“It’s better to have a policy than to just bank on individual, idiosyncratic discretion,” said Judy Pigott, a Seattle heiress to a trucking fortune. She is also a member of Patriotic Millionaires for Fiscal Strength, which advocates for raising taxes on those who earn more than $1 million a year.
“We all benefit from being part of our country ... and those of us who have abundant financial resources also have abundant privileges,” Pigott said.
Relying on voluntary donations wouldn’t bring in a reliable amount of money that could match revenue from raising taxes across the board, said Lee Farris, a tax policy coordinator for United for a Fair Economy.
A subgroup of that organization, Responsible Wealth, focuses on raising taxes on the wealthy.
“I’m sure Rep. Bachmann would probably not agree that all people who owe money to the U.S. Treasury should make voluntary contributions,” said Responsible Wealth member John Russell, a real estate developer in Portland, Ore. “There’s a fundamental issue of fairness, and nobody wants to be treated in a manner that’s different than other people.”
But fiscal conservatives argued that higher taxes address only one side of the debt equation.
“Buffett fails to call for significant reforms in Social Security and Medicare that could reduce federal spending,” wrote Mike Brownfield on the Heritage Foundation’s The Foundry blog, which he edits.
Jane Olive, a retired teacher in Las Vegas, sent in $100 earlier this year and sent letters to 50 friends and relatives asking them to donate, too. She said she was moved to act by the country’s current financial troubles.
“It’s in that spirit of, I can’t do much, but this is a little thing many of us can do,” Olive said. “We don’t have to be rich to do it, but it would be wonderful if the rich people did it.”
Vanessa Williamson, a graduate student studying political science at Harvard University, took her Treasury donations online. She started a website called IHeartTaxes.org a year ago, selling T-shirts, buttons and mugs with slogans like, “Taxes Put a Man on the Moon” and “Taxes Feed Kids.” The purchase prices — ranging from $2.49 to more than $30 — cover costs plus shipping. The rest goes to the government. So far, she has sent $140 to the debt bureau.
“I hope that the site reminds people that as much as it’s nice to talk about taxation, you actually like clean water,” Williamson said.
It is impossible to know how many individuals donate, said the debt bureau’s Braden, because many groups send in bundled donations. The largest donation ever was a $3.5 million gift in 1992.
A database of individual contributions, published by National Public Radio last year without names, showed that the median payment in calendar year 2009, the only full year of data available, was $100. The highest donation that year was $1.5 million; others were as little as a penny.
The law was first created so the Treasury could accept a bequest from a woman who left money to the federal government in her will. However, several estate planners said few people include the government in their final arrangements.
“I’ve only seen it once in my whole entire career,” said Joseph Falanga, an estate planner in New York and president of the National Association of Estate Planners & Councils. “As an estate planner … you say, ‘Look, either you’re going to give it to charity or you give it to the U.S. government.’”
For those who choose to give the government a donation, rather than taxes, take heart: the gift is tax-deductible.
“Mr. Buffett, write a big check today,” Bachmann said. “There’s nothing you have to wait for.”
The Minnesota congresswoman is correct. The federal government has had a law on the books for 50 years that allows anyone to open up his checkbook, write out a donation payable to the Bureau of the Public Debt, and send it to a post office box in Parkersburg, W.Va. — or make an online payment at www.pay.gov.
Through the first three quarters of the current fiscal year, Americans had donated about $2 million to the fund — compared with $2.8 million in donations for all of fiscal 2010.
That amounts to roughly one ten-thousandth of a percent— that is, 0.0001% — of the federal debt.
The money is set aside and ultimately used to pay the principal on maturing Treasury bills that are issued as debt to finance government operations, according to McKayla Braden, spokeswoman for the debt bureau.
“We send everybody a thank you,” Braden said, noting that the agency gets more donations whenever there’s a public crisis like a natural disaster or the summer deadlock than over raising the debt ceiling.
But millionaires and billionaires who, like Buffett, support higher taxes on the super-rich, say voluntary donations won’t solve the country’s debt problems. Even Buffett’s fortune of approximately $50 billion amounts to less than half a percent of the total.
“It’s better to have a policy than to just bank on individual, idiosyncratic discretion,” said Judy Pigott, a Seattle heiress to a trucking fortune. She is also a member of Patriotic Millionaires for Fiscal Strength, which advocates for raising taxes on those who earn more than $1 million a year.
“We all benefit from being part of our country ... and those of us who have abundant financial resources also have abundant privileges,” Pigott said.
Relying on voluntary donations wouldn’t bring in a reliable amount of money that could match revenue from raising taxes across the board, said Lee Farris, a tax policy coordinator for United for a Fair Economy.
A subgroup of that organization, Responsible Wealth, focuses on raising taxes on the wealthy.
“I’m sure Rep. Bachmann would probably not agree that all people who owe money to the U.S. Treasury should make voluntary contributions,” said Responsible Wealth member John Russell, a real estate developer in Portland, Ore. “There’s a fundamental issue of fairness, and nobody wants to be treated in a manner that’s different than other people.”
But fiscal conservatives argued that higher taxes address only one side of the debt equation.
“Buffett fails to call for significant reforms in Social Security and Medicare that could reduce federal spending,” wrote Mike Brownfield on the Heritage Foundation’s The Foundry blog, which he edits.
Jane Olive, a retired teacher in Las Vegas, sent in $100 earlier this year and sent letters to 50 friends and relatives asking them to donate, too. She said she was moved to act by the country’s current financial troubles.
“It’s in that spirit of, I can’t do much, but this is a little thing many of us can do,” Olive said. “We don’t have to be rich to do it, but it would be wonderful if the rich people did it.”
Vanessa Williamson, a graduate student studying political science at Harvard University, took her Treasury donations online. She started a website called IHeartTaxes.org a year ago, selling T-shirts, buttons and mugs with slogans like, “Taxes Put a Man on the Moon” and “Taxes Feed Kids.” The purchase prices — ranging from $2.49 to more than $30 — cover costs plus shipping. The rest goes to the government. So far, she has sent $140 to the debt bureau.
“I hope that the site reminds people that as much as it’s nice to talk about taxation, you actually like clean water,” Williamson said.
It is impossible to know how many individuals donate, said the debt bureau’s Braden, because many groups send in bundled donations. The largest donation ever was a $3.5 million gift in 1992.
A database of individual contributions, published by National Public Radio last year without names, showed that the median payment in calendar year 2009, the only full year of data available, was $100. The highest donation that year was $1.5 million; others were as little as a penny.
The law was first created so the Treasury could accept a bequest from a woman who left money to the federal government in her will. However, several estate planners said few people include the government in their final arrangements.
“I’ve only seen it once in my whole entire career,” said Joseph Falanga, an estate planner in New York and president of the National Association of Estate Planners & Councils. “As an estate planner … you say, ‘Look, either you’re going to give it to charity or you give it to the U.S. government.’”
For those who choose to give the government a donation, rather than taxes, take heart: the gift is tax-deductible.
