DENVER — At a wine-and-cheese reception in his office here, Terry M. Barr, president of Samson Oil and Gas, made a pitch to industry executives to donate to the Republican Party of Colorado so that they could defeat President Barack Obama and elect more Republicans at the federal, state and local levels.
After his guests left, Barr offered a surprising postscript: He agrees with a proposal by congressional Democrats to impose a surtax on income over $1 million a year.
Republicans in Congress deride the proposal for a so-called millionaires' tax as class warfare. But in an interview, Barr said, "Wealthy people in the U.S. should be paying more tax, and I'm one of them."
Barr, a petroleum geologist who said he made $1.2 million a year, described himself as a staunch conservative, and said his views of tax policy reflected his fiscal conservatism.
"The United States needs a tax increase for the sake of its fiscal health," Barr said. "If you fight two wars in Iraq and Afghanistan, you have to pay for them. China owns a trillion dollars of U.S. government debt. That's not a healthy position for us to be in. We have to suck it up and pay more tax to help get rid of the deficit. I would pay more tax. I can afford to."
But the affluent are not of one mind.
Ann L. Brown, president of New Vista Image, a digital graphics company in Golden, Colo., said: "I believe in the American dream. I don't want to destroy it by taxing those who are successful. The millionaires' tax would penalize the very people who make our economy grow, including many small-business owners. I think we already pay a fair share of the taxes."
Those divergent views define the battle lines on an issue that has moved to the center of political debate this fall. The Democrats' campaign for a millionaires' tax will resume when the Senate returns on Monday. Democrats want to use the tax to pay for Obama's jobs bill — the whole $447 billion package or any piece of it they can push through Congress.
Unable to pass the jobs bill as a whole, Senate Democrats decided to break it into pieces, using the same source of revenue.
This week they will try to pass a measure providing $60 billion for transportation and public works projects, financed by a millionaires' tax.
The debate offers a preview of a much larger fight over whether to extend tax cuts enacted in 2001 and 2003 and scheduled to expire at the end of next year. Republicans generally want to preserve what are known as the Bush tax cuts for all Americans. Democrats, by contrast, want to let them expire for the highest-income taxpayers.
Rep. John Garamendi, D-Calif., said Republicans refused to "put a little teeny, tiny tax on millionaires' income" to create jobs. Rep. Betty Sutton, D-Ohio, said Republicans were "fixated on protecting millionaires and billionaires" — an assertion made repeatedly by Obama as he has campaigned for re-election and for his jobs bill.
In his weekly address on Saturday, Obama expressed alarm about growing income inequality, which is also one of the grievances of the Occupy Wall Street movement and its supporters.
Obama said he believed that many high-income people agreed with his proposal. "One survey found that nearly 7 in 10 millionaires are willing to step up and pay a little more in order to help the economy," Obama said.
James Walker, who manages oil and gas wells in the northeast corner of Colorado, said the proposed surtax would be disastrous.
"That tax would grab a whole lot of small businesses that are on the cusp of success," Walker said. "The tax policies coming out of Washington could crush domestic oil and gas production by us little guys."
Rick and Polly Lawrence run the Lawrence Construction Co., a fourth-generation family-owned business in Littleton, Colo., with 200 employees and $59 million in annual revenue. They build roads and bridges with union workers. The company, organized under Subchapter S of the Internal Revenue Code, does not pay corporate income taxes. Most of its income stays in the company, but for tax purposes is reported on the owners' personal tax returns, and they pay income taxes on their share of the corporation's profits.
"Our individual returns show big profits — $885,000 of income from the company last year," Lawrence said. "But the vast majority of that income stays in the business. If Congress increases the tax rate, we would have to take more cash out of the business to pay taxes — money that we would otherwise reinvest in the company, to buy equipment or to hire more employees."
Lawrence added: "When people in Washington talk about millionaires, it's just an abstract idea. They paint a picture of somebody sitting outside a mansion next to a pool with a servant. That's far removed from reality."
"When we go on vacation," her husband said, "we fly economy. We don't have corporate jets."
In separate interviews, people with high incomes said they would willingly pay higher federal taxes if they thought the money would be well spent by the government, but many doubt that it would be.
"I feel like a majority of that extra revenue will be wasted," said Gayle A. Dendinger, the owner of a Denver transportation company, who said he made $1 million to $2 million in good years.
Earl L. Wright, chief executive of AMG National Trust Bank in Englewood, Colo., which manages investments for many millionaires, said: "If they thought that surtax would resolve the problems we have with the deficit, unemployment, Medicare and entitlement expenses, most of them would pay it in a heartbeat. But they do not believe that Washington would spend the money more effectively or productively than they do."
From his fourth-floor office, Wright has a spectacular view of the snow-capped Rockies. "Most of the wealth you see out here in the Front Range was created from scratch by owners of small and midsize companies operating in an innovative, entrepreneurial way," Wright said.
Several affluent people said they were aware of data showing increased inequality in the distribution of income, with the top 1 percent of earners making outsize gains in the last three decades.Comment on this story
"That bothers me," said Brown of New Vista Image. "I do not like seeing that trend. And it also bothers me when I see huge multimillion-dollar bonuses going to corporate executives whose companies are not showing good performance."
But, Brown said, the solution is not to impose a surtax on every dollar over $1 million. In good years, Brown said, such a tax could affect her because she and her husband report the profits of their business — a limited liability company with nine employees — on their personal tax return.