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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."