Its called the "Millionaire's Tax", and it's pure genius. Finally, President Obama and Democrats have caught on to the power and importance of branding. My God, it's almost Rovian in its sheer simplicity and potential impact.
The tax is a brilliant scheme by the president to achieve his goal of taxing the rich and creating more equity in the lopsided tax code, and in the process funding his American Jobs Act. Also called the "Buffett Tax," because it was inspired and advocated by Nebraska Billionaire Warren Buffett who recently noted that many of America's wealthiest individuals' effective taxes rates are lower than those of their secretaries.
The beauty of the tax, which as expected has been broadly criticized by Republicans, is that it defines the issue more clearly than anything the administration has tried in the past and it forces politicians into one of two boxes: the rich one and the one with the poor and middle class. To paraphrase former President George W. Bush, "You're either with millionaires or you're against them." And that's a message that could resonate quite loudly with average Americans as they struggle through this challenging economy. But self-serving Republicans are crying foul.
"When you pick one area of the economy and you say, we're going to tax those people because most people are not those people, that's class warfare," Sen. Lindsey Graham (R., S.C.) said over the weekend.
Is it class warfare? You bet. But not in the way Sen. Graham and the GOP leadership would like you to believe. The truth is, the rich have been waging war on the poor and middle class for decades now, and it's time the tide turns. Income inequality in the United States has never been more glaring. According to the Wall Street Journal, "the average tax rate for the top 400 earners in the U.S. fell to as low as 16.62% in 2007 from a recent peak of 29.9% in 1995. It ticked up again in 2008 to 18.11%, according to the latest annual Internal Revenue Service analysis of returns. Capital gains represented a very high proportion of the top earners' incomes--about 56.7% on average." And those dividends and capital gains are taxed at a favorably low 15%. The problem is, the poor and middle class are not flush with either, so this is a very generous tax loophole enjoyed primarily by the nation's wealthier earners.
What's more, according to 2010 Census data, the top-earning 20% of Americans--those making more than $100,000 each year--received 49.4% of all income generated in the U.S., compared with the 3.4% earned by those below the poverty line. That ratio of 14.5-to-1 was an increase from 13.6 in 2008 and nearly double a low of 7.69 in 1968. To be sure, the rich have never been richer, and the poor have never been poorer. So what are Republicans constantly complaining about?
The Republican mantra these days is to rant about the evil of "big government" and how it's destroying America. Texas Gov. Rick Perry promises voters that if he's elected president he will "make government as inconsequential in your lives as possible." But how exactly do they define big government? Does this include Social Security and Medicare? The military? The National Weather Service? Air Traffic Control? The Centers for Disease Control? The U.S. Postal Service? Which "inconsequential" services would they suggest killing off? And the bigger issue is, who pays for them? Is it the secretary who forks over 25%+ of her pay, or Warren Buffett and the nation's rich who pay 16%? If that isn't class warfare I don't know what is.
It's time the rich stop whining about class warfare and start paying their fair share of taxes to pay for this country's essential services and to help reduce its deficit. How about we borrow from Sen. John McCain and piggyback the Millionaire's Tax with the slogan, "America First." The nation's rich needs to stop thinking about their own pocketbooks for a second and show some concern for the country in which they've amassed their colossal wealth. If the Obama administration is smart, it will hammer home this Millionaire's Tax rhetoric until it becomes the sort of highly effective propaganda Republicans have been successfully regurgitating for years.
On a side note, I wonder how many of our nation's richest inherited most of their wealth? Being born on third base doesn't mean ya hit a triple, so how about sharing that good fortune by paying more taxes and reducing the income gap? Also, what do folks like Alex Rodriguez, Alec Baldwin, Jerry Seinfeld, Katie Couric and Salman Rushdie have in common? With the exception of perhaps a maid and a personal trainer, these millionaire's don't create jobs, so let's stop the disingenuous rhetoric and quit calling them "job creators." They're just very rich people who, thanks to the lowest tax rates in history, get to keep more of their money than their maids and personal trainers.
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Class warfare is not about income inequality. Sorry to deliver the news. Income inequality is a direct product of capitalism, not a malaise of working people. Class warfare is about the divide between workers and non-workers. Workers are people who work or have worked for a living, whereas the owner/manager class (which includes the middle class, in case you did not know that either, sir) sits around collecting unearned income from huge masses of deluded people who think they are bettering themselves by performing labor.
The solution is not to figure out how to unbreak a system that is inherently designed to accumulate wealth for one class out of the value of work performed by the other class. The solution is to abolish this chicanery altogether and replace it with something like the way people lived BEFORE capitalism came along. Remember, as Marx correctly said, "labor precedes capital." Always has, always will.
You should be ashamed of yourself, for not even knowing what poverty is. Take a glance across the Rio Grande, and then try telling me earnestly that a family of 4 in our country taking in 20K annually is crushed.
As for the "incentives to say at home and ... loot the wealthy" I think completely misses the point of how that should even be possible. What the heck is wrong with wages when hard work is "rewarded" with pay that is only slightly better than government assistance?!
Trickle down is real, you have to know how to look for it. If you are looking merely at wages, you'll miss it. You have to see what the market provides for those wages.
The reality is that the "job creators" rely more on the services that are provided to the public. Two such examples: the business owner who needs to hire educated workers, relies upon a quality education system to produce such workers. Additionally, the need for product or supplies to get around in a timely manner requires viable roads, etc
Sure, the employees stand to lose if these things are not up to standard, but certainly the employer stands to lose much more due to his/her investment ... thus there is a greater vested interest in the health of the economy, the infrastructure, the education system, environment, etc. by the "job creators" -- which translates into a reason why we have a progressive tax system.
1) Somebody needs to define fair. What is fair? Everyone paying the same? What about those that make more than others? Is it fair to penalize their success (gumption, guts, or luck) or is it fair to have them pay more for enjoying the environment in which they became successful (despite how many public services they use on the whole)?
2) Both sides need to stop using statistics to muddle the point. Many high earners pay a lower rate of tax because their income is from investments. Is investment something we want to continue to encourage? Is it better to use these statistics to convince the poor and middle class that the rich are paying less than their shares (when in reality they pay much more money)? Aren't many of our tax "loopholes" (I opine that they are there to further social policies - investment, charity, etc.) benefits and intentions worthwhile?
2) "Is investment something we want to continue to encourage?" You imply that if people have to pay a higher tax rate they would stop investing. Unless we ask them to pay 100%, why would they? Let's say you, Moseph, made $10,000 on an investment and paid $1,500 tax on it. Now you have another chance to make $10,000, but you'll have to pay $2,000 tax. Will you invest or not? Of course you will.
3) "Aren't many of our tax loopholes . . .worthwhile?" They may have been at one time or maybe they are the result of special interest influence rather than worthwhile intentions. Let's assume that at one time they were well intended. How about today? Are those same loopholes necessary? Worthwhile? Still relevant? A priority? Example: we subsidize the tobacco industry $50M annually while trying to convince everyone to not smoke. We subsidize oil companies despite unprecedented profits, while encouraging the development of renewable energy technologies. We provide subsidies that were intended to help small farmers, but now someone can collect them by just owning farmland and not growing anything on it. These are loopholes that have outlived their intentions.
I appreciate the tone of your post. You are raising points worth thinking about and discussing, and doing it without name calling, meaningless soundbites, or bringing party affiliation into the discussion. I suspect you and I will see things differently, but at least I feel like there is room for discussion. I'm pleased to be your first fan.
seen the un-employment rate lately? how many millions of jobs have the 'job creators' transferred overseas to take advantage of lower wage demands? financial institutions and corporations are holding vast amounts of cash in reserve for their own use, including vast excutive salaries, they're not investing in new jobs and they're certainly not trickling anthing down.
and the word 'trickle' - doesn't that give us a clue about the substance of the policy?
if we wait for the 'job creators' to start creating jobs on their own, the rest of us will starve.
i hope this class warfare, on behalf of the middle class, finally has some substance. and remember that any new job - whether private or government - puts money back into the economy. it all spends the same.
Time to stand up!!