Celebs Talk a Big Game, But Will They Pay More Taxes?
Who wants to pay more taxes? If you’re waiting for a punch line, forget about it. With tax time underway, there will be a lineup of wealthy people, mostly celebrities, saying, “Please tax me more!” However, in many cases, their words don’t match their actions.
But around tax time last year, a Fox News Magazine report quoted several celebrities as saying they’d be willing to pay more taxes. For example, actor Will Smith said, “I’m very supportive of that idea,” that is, President Obama’s contention that the wealthy need to pay more taxes. “America has been fantastic to me. I have no problem paying whatever I need to pay to keep my country going.”
Feel free, Mr. Smith, to pay more.
Here’s a rundown of some other celebrities who’ve spoken up around tax time.
The billionaire loves to point out that he pays less in taxes than his secretary. That sounds dramatic, but as Buffett well knows, this is because his income is mostly from investments, subject to a maximum tax rate of 20 percent and no employment tax, while his secretary’s income is wages, subject to a maximum of 39.6 percent plus employment tax. He could, of course, forget to claim some of his tax-reducing deductions and end up paying more if that is his goal.
The Facebook founder paid about a billion dollars in taxes for 2012, and will likely more than double that for 2013. On the subject of raising tax on the wealthy, he told President Obama, “I’m cool with that.” Most of his money is from the exercise of options to buy Facebook stock, as opposed to receiving wages. For that income, he personally pays a bundle. Facebook, however, pays little or nothing in tax. That’s partly because the company has an enormous deduction for the compensation paid to Zuckerberg in stock options. Nothing illegitimate about that.
Zuckerberg does manage his wealth and tax with trust structures and charitable donations. Nobody would suggest he shouldn’t have donated to charity, but if he’s “cool” with paying more taxes, there was no requirement to deduct those donations on his tax returns.
In an interview with CNNMoney.com, the rapper said, “I’m sure if it was for health care and for education and to help people, I think most people with a conscience and some integrity and moral fiber wouldn’t have any problem paying more taxes.”
So according to this font of wisdom, if you don’t want to pay more taxes, you are a soulless scumbag?
Who knew a rapper would have greater wisdom than US judge and judicial philosopher Learned Hand, who said, “Any one may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury; there is not even a patriotic duty to increase one’s taxes.” No mention from the judge about a lack of moral fiber.
The actress told attendees of the 2012 Democratic National Convention she should be paying more taxes.
“The Eva Longoria who worked at Wendy’s flipping burgers – she needed a tax break. But the Eva Longoria who works on movie sets does not,” she said.
Of course, the burger-flipping Longoria probably paid no federal or state income taxes, though many low-income people think they do, mistaking employment tax for income tax.
In a letter, the author calls paying more taxes “practical necessity and a moral imperative.” Who knew the horror writer was more “learned” on taxes than Judge Learned Hand? King said, “Those who have received much must be obligated to pay … in the same proportion.”
In lengthy, vulgar attacks, he rampaged on about how rich people invest their money instead of paying their “fair share.”
“At the risk of repeating myself, here’s what rich folks do when they get richer: they invest,” he wrote.
So investing is now evil? As Forbes contributor Tim Worstall put it, “For of course the truth is that investing is the very thing that drives the whole economy forward. People not consuming some part of their current income but putting it aside to finance adventures in future economic production.”
King has a lot to say, mostly not repeatable in polite company, about people who invest their money (frequently known as “job creators”). The question remains: How does a horror writer qualify as a tax-policy expert?
Ben Affleck and Matt Damon
In 2012, Affleck went on Bill O'Reilly's Fox News show to express his belief that wealthy people like him should pony up more taxes.
“I don't know, you know, what your nut looks like,” the actor told O'Reilly, “but I don't spend so much that I can't afford to pay a little bit more in taxes.”
Affleck’s friend and fellow actor/director, Damon, expressed a similar sentiment in an interview with journalist Nicholas Ballasy: “I really don’t mind paying more taxes. I’d rather pay for taxes than cut, like, ‘Reading is Fundamental’ or ‘Head Start’ or some of these programs that are really helping kids.”
Affleck and Damon support paying higher taxes, but that doesn’t stop them from being tax-users. They both admit they could not make their movies if they didn’t take advantage of film tax credits. One way they could pay more taxes is to forget the credits and fund their projects themselves rather than letting taxpayers do it.
The actor has gone public with his support of raising taxes on the wealthy. But when his own tax bill almost shot higher by overstaying his work days in New York, he jumped on a plane and high-tailed it home to California. Wouldn’t his stated desire to pay more taxes have been better served by cooling his heels in New York a bit longer?
Mitt Romney Cheated on His Taxes … By Paying Too Much
Whether you love or hate or are indifferent about Mitt Romney, ABC News reported that with his 2011 taxes, Romney deliberately paid more than he had to. He gave $4 million to charity, but didn’t claim it all. As a result, he paid $500,000 more in taxes than he needed to. He’s clear about the political motivation; that is, he had made a public statement that he paid a certain percentage in taxes, and because of his enormous charitable donations, he fell below that percentage. Therefore, he made the decision to not claim the entire deduction for donations. The point is, he wanted to pay more, and he did.
Stop Talking and Just Pay More
These wealthy individuals would have you believe they are frustrated at their low tax bills, even as they pay accountants to find every deduction. There’s anecdotal evidence that early in his career, Elvis Presley insisted his money manager file a short-form tax return. He opted to forgo the deductions he could’ve taken because he didn’t just believe he should pay more, and he did it (assuming this is not a mere legend). The truth is, anybody can forgo deductions. Or they can go to Pay.gov and just pay more. It doesn’t get publicity, but it would put their money where their mouths are.
Note to celebrities: Your decision to pay more taxes is personal. If you want to pay more, don’t talk about it, do it.