Tax the rich gets backing from some industry chiefs

Thu Oct 6, 2011 1:19pm IST

Bank of America CEO Brian Moynihan speaks at the Washington Ideas forum at The Newseum in Washington October 5, 2011. REUTERS/Yuri Gripas

Bank of America CEO Brian Moynihan speaks at the Washington Ideas forum at The Newseum in Washington October 5, 2011.

Credit: Reuters/Yuri Gripas

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WASHINGTON (Reuters - Captains of Google, Bank of America and Citicorp say they are ready to pay higher taxes, as long as Congress uses the money to get the U.S. economy back on its feet.

Democrats on Wednesday proposed a 5 percent surcharge on millionaires to finance President Barack Obama's $447 billion jobs stimulus package, which is designed to save and create jobs, and boost an economy on the edge of recession.

Industry executives speaking at the Washington Ideas Forum said they are willing to foot the bill.

"We need to get jobs going in this country and anything to do that would make some sense," said Brian Moynihan, chief executive of Bank of America, who earned $10.9 million including restricted stock options in 2010.

He said that Bank of America's wealth management clients he talks to say they also would be supportive, depending on how the money would be used.

"If they believe it puts our fiscal house in order, they say 'That's great.'" But they also want to see spending levels brought down as part of the equation, he said.

Eric Schmidt, executive chairman of Google Inc, said higher taxes would not prevent him from investing or spending. Opponents say higher taxes would hurt growth.

"In my case, it is not a particularly big issue because it would not change my behavior," said Schmidt, who earned $10.3 million, including stock options in 2010.

"What matters most is how to improve the growth prospects of the economy," he said. "The real problems are when you are not growing."

Robert Rubin, a senior executive at Citicorp who was a managing director of Goldman Sachs before serving as Treasury Secretary for President Bill Clinton, also favored higher taxes twinned with spending restraints.

"I would aboslutely go back to top rate of 39.6 percent," he said.

When Clinton, a Democrat, raised the tax rate on the wealthiest in the early 1990s, opponents made the same warnings that they make today that it would stifle job creation, investment, innovation and growth. In fact, the United States enjoyed its longest economic expansion and produced a budget surplus, Rubin said.

Tax breaks also need to be addressed, which would fall on the more affluent, he said.

Obama is pressing higher taxes for the rich as a way to bring the deficit in line. He gained support from billionaire investor Warren Buffett who wrote a column last month that rich people like him can afford to pay more.

(Reporting by Stella Dawson; Editing by Gary Hill)

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