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Originally published April 9, 2010 at 7:40 PM | Page modified April 10, 2010 at 11:12 AM

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Network of wealthy wants to pay more taxes

Some rich Americans are leading a tax revolt of sorts — to pay more, not less.

Seattle Times business reporter

Some rich Americans are leading a tax revolt of sorts — to pay more, not less.

Judy Pigott, a Seattle author, philanthropist and an heir to the Paccar fortune, is among the group of wealthy individuals calling on Congress to end tax breaks that have enriched people like her.

They have signed a Tax Fairness Pledge to take the money they saved as part of tax cuts enacted under President George W. Bush and donate it to groups working to overturn those policies.

The tax cuts were "based on the erroneous assumption that the trickle-down effect would somehow benefit everyone," Pigott said. "What we have now is the greatest wealth disparity since the Great Depression."

She is part of a group called Responsible Wealth, a project of the nonprofit United for a Fair Economy. The network of 700 people who are among the wealthiest 5 percent in the U.S. includes Jeffrey Hollender, the co-founder of Seventh Generation natural products, and Eric Schoenberg, an economist at Columbia University and former investment banker.

United for a Fair Economy, which has worked to prevent permanent repeal of the estate tax, is trying to counteract "Tea Party" protests over higher taxes, and the group argues that eliminating tax cuts for the wealthiest Americans is one solution to the country's deficit.

They want Congress to restore the 39.6 percent and 36 percent rates on the highest income earners and end special treatment of dividends and capital gains.

People in the top 5 percent received almost half of the Bush tax cuts, Pigott said, a figure that amounts to more than half of the current $1.5 trillion deficit. She has supported the effort for four years. Last year she donated about $600,000, half of which was savings from tax cuts, she said.

Why not just keep giving the surplus away?

"I think it is the national government that can deal with clean air, water, national transportation systems, education," she said. "I see those things are in trouble on a state level and on a national level because we don't have the money. Yes, we can do a lot, but we can't do what the federal government can do."

Pigott, co-founder of Personal Safety Nets, is the daughter of the late Formula One race-car driver Pat Pigott and the granddaughter of Paul Pigott, who owned the truck company that is now Paccar. Paccar CEO Mark Pigott is one of her cousins.

Asked whether she has approached members of her family about the tax cuts, Judy Pigott said she has talked to her cousins. "I'll just say we have a large enough family that we cover all points of view and a solid enough family that we can agree to disagree."

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Another member of the network is Arul Menezes, who came to the U.S. as a graduate student with $250 and earned his wealth over the past 20 years at Microsoft. Investments made decades ago created the universities and research systems that helped him succeed, he said.

Menezes said that while the tax cuts have saved him more than $20,000 a year, he worries about the long-term impact.

"The tax cut was paid for entirely with borrowing," he said, while funding for schools, roads and research was cut. With a deficit of about $1.5 trillion, "that's just robbing the bank."

Menezes said he has stepped up his charitable giving. But that won't have the same effect as reworking the tax system, he said.

"It embarrasses me to go into a grocery store and know that the person at the checkout stand is paying a higher tax rate than I am," he said.

Kristi Heim: 206-464-2718 or kheim@seattletimes.com

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