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.