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Who, What, Why: How can an American pay extra tax?

2011-09-28 17:49:39

Amid a robust debate about taxes, the budget deficit and the national debt, a

wealthy former Google executive wants Washington to raise his taxes. If

Americans want to pay more than they have to by law, how can they go about it?

President Barack Obama, at a town hall-style meeting in Silicon Valley on

Monday, called on a balding man in glasses and a blue shirt near the back.

"I'm unemployed by choice," Doug Edwards, Google's 59th employee, told the

president.

"My question is, would you please raise my taxes? I would like very much to

have the country to continue to invest in things like Pell Grants [an education

programme] and infrastructure and job training programs that made it possible

for me to get to where I am."

The answer

The US Department of Treasury accepts gifts

See the department's gift website

Dozens of other US government agencies and research centres accept donations

for more specific aims

Some states also accept gifts into their coffers

With his comments on Monday Mr Edwards, author of memoir I'm Feeling Lucky

about his six-year tenure at Google, joined billionaire Warren Buffett in a

public call for the US Congress to raise income tax rates on the wealthiest

Americans.

The comments drew fire from conservatives who urged him to cut a cheque to the

US government rather than saddle others with higher tax bills, and praise from

liberals who say current tax policy has contributed to rising income

inequality.

Mr Obama has called for higher taxes on the wealthy, a proposal Republicans

have attacked as a declaration of "class warfare".

Doug Edwards, courtesy of Houghton Mifflin Harcourt Mr Edwards urged Mr Obama

to "stay strong" in pushing for tax increases

But while Mr Obama and the Republicans fight it out, Mr Edwards and other

wealthy Americans are already easily able to express their devotion to their

country through higher taxes if they desire.

Since 1843, the US treasury department has accepted what it terms "gifts to the

United States", which go into the US treasury for general budget needs.

Now, a webpage gives Americans instructions and an address to send their

cheques.

If they want some control over how their gifts are used, Americans can give

directly to more than 50 separate government agencies or programmes, from the

National Science Foundation to the National Park Service and the state

department, to an account earmarked to pay down the national debt.

In 2010, Americans contributed $316m directly to the government, with the

largest chunk going to scientific and medical research organisations. It's not

much: Total individual income tax receipts were $899bn, according to the

treasury department.

And if people want to give closer to home, several states accept voluntary tax

contributions.

'Moral preening'

Former Arkansas Governor Mike Huckabee, who ran for president in 2008 and is

now a chat show host on Fox News Channel, established the state's Tax Me More

Fund in 2001 in a mocking swipe at Democratic lawmakers who called for tax

increases to stave off spending cuts.

The fund ultimately raised $2,076.79, says Richard Weiss, director of the

state's Department of Finance and Administration. The last collection was a $3

donation in January 2005.

Graph showing breakdown of donations

"It's not a successful tax programme," Mr Weiss says, but, "it's still alive.

We can always use the money."

Conservatives who provide the political and policy energy behind the Republican

party's anti-tax position derided Mr Edwards and Mr Buffett and encouraged them

to make voluntary contributions rather than offer to pay higher tax rates as if

they represented the spirit of their hyperwealthy peers.

"You can write your cheque today," says Grover Norquist, president of anti-tax

advocacy group Americans for Tax Reform.

He accused Mr Edwards and Mr Buffett, who has repeatedly complained that he and

other mega-rich Americans pay lower tax rates than their secretaries, of "moral

preening".

But some liberal-leaning analysts laud the offer.

"It's great to see," says Chuck Marr, director of federal tax policy at the

Centre for Budget and Policy Priorities in Washington.

"Very wealthy people are stepping up and saying they've been privileged to live

in a great country and they're willing to pay higher taxes."