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Some wealthy stand fast—for higher taxes

Some prominent names are on record in favor of higher tax rates for the rich, including (left to right): Tom Stemberg, the founder of Staples Inc.; travel guide Rick Steves; and businessman Frank Patitucci.

His taxes are going up, and Woody Kaplan isn’t happy.

“I’m disappointed that they’re not going up more,” said Kaplan, a retired Back Bay real estate developer who is now a civil liberties activist.

Following congressional approval this week of a deal that raises federal income and investment tax rates on wealthy Americans, some of the loudest applause is coming from people who now must share more of their income with Uncle Sam.

Kaplan is one of six Massachusetts members of a national organization called Patriotic Millionaires for Fiscal Strength. The group’s high earners have been asking Congress to increase taxes on the wealthy since 2010, saying they can afford to pay more for the sake of stronger social service programs and smaller budget deficits.


When President Obama delivered a speech in April arguing in favor of the Buffett Rule — a failed proposal that would have taxed all income over $1 million at 30 percent, even if it came from investments — he stood on stage flanked by members of the group.

The Patriotic Millionaires represent a minority opinion within the 1 percent, Kaplan conceded, but even some nonmembers who are less enthusiastic about bigger tax bills say they are willing to open their wallets if Congress uses the revenue as part of a sound plan to reduce the federal deficit.

The founder of Staples Inc., Tom Stemberg, a Mitt Romney supporter, reiterated his position stated before the election.

“As I said then, I am OK paying the higher taxes if this leads to balancing the budget,” Stemberg said in an e-mail.

“We have yet to see the expense side of the ledger addressed to get us there. I would not be happy paying more if we continue to bleed as a country.”

After months of brinksmanship, both houses of Congress approved a package of measures on New Year’s Day that pulled the nation back from the fiscal cliff.


The compromise extended Bush-era income tax cuts for most Americans, while allowing the top rate to rise to 39.6 percent from 35 percent for individuals who earn more than $400,000 and couples who make more than $450,000.

In addition, the deal raised capital gains and dividends taxes on the wealthy to 23.8 percent, up from 15 percent.

The White House has estimated that the tax changes will generate an additional $620 billion in revenue over the next 10 years.

Members of the Patriotic Millionaires embraced the higher rates.

“The overnight increase in my taxes is itself more than the annual income of almost anyone I know,” Rick Steves, a travel writer and host of the public television series “Rick Steves’ Europe,” said in a statement provided by the group.

“It won’t impact my lifestyle or outlook or enthusiasm for employing people a bit. In fact, the very thought of this brings me joy.”

Frank Patitucci, chief executive of NuCompass Mobility, a relocation services company in Pleasanton, Calif., predicted “a great year for the economy, thanks to the job-creating increase in tax rates on the wealthiest taxpayers.”

“The reaction of the markets to the fiscal cliff deal is immediate proof that higher tax rates on the wealthiest taxpayers will not kill jobs or tank the economy,” Patitucci said.

“In fact the opposite will be true, and investors in the stock market know it.”


The Dow Jones industrial average rose more than 2 percent on the first day of trading after the fiscal cliff deal. Stock markets in Europe and Asia also­ climbed.

The cliff agreement has its detractors.

The Campaign to Fix the Debt, founded by Democrat Erskine Bowles and Republican Alan K. Simpson, cochairmen of the National Commission on Fiscal Responsibility and Reform, called the deal “a squandered opportunity.”

The group, whose members include many executives who have expressed a willingness to pay more taxes, as a matter of policy is pressing for spending cuts and economic growth and for overhauling entitlement programs.

Jon Romano, a spokesman for the group, said Fix the Debt is for “raising revenue, yes. Raising taxes, no.”

Ultimately, most wealthy Americans can accept higher tax rates if they believe the increases are part of a broader fiscal solution, said Jeremy Gonsalves, managing director of BNY Mellon Wealth Management in Boston.

“Our high-net-worth clients are mostly about what else we’re going to do, because we haven’t solved all our challenges with the deficit for the next 10 years,” Gonsalves said.

“They’re willing to pay more, but they’re anxious to see a sustainable path going forward.”

Callum Borchers can be reached at callum.borchers@globe.com. Follow him on Twitter @callumborchers.
Beth Healy of the Globe staff contributed to this report.