President Obama will propose a millionaires' tax as part of the deficit-reduction package to be unveiled Monday. This is a great idea, which has already been branded "class warfare" by the Republicans.
The problem is the rest of the expected speech, which entirely mixes Obama's message to voters. Obama is widely expected to propose cutting $300 billion from Medicare over a decade, including a widely-leaked increase in the Medicare eligibility age from 65 to 67.
That really is a kind of class warfare, directed against the vast majority of older Americans who cannot afford to buy decent health insurance in the private marketplace.
UPDATE: Early this morning, there were reports that the proposed increase in the Medicare eligibility age from 65 to 67 has been scrapped. If true, this is a victory for progressives who have been pressing the White House not to commit political suicide -- Campaign for America's Future deserves a special salute for its leadership on this issue. It's also another gain for the White House beginning to recognize that scapegoating social insurance in a recession makes neither political nor economic sense.
By contrast, the proposed tax on people who make over a million dollars a year is sensible, and smokes out Republicans as defenders of wrongheaded economics and the very rich.
Rep. Paul Ryan told Fox News that the proposed tax "adds further instability to our system, more uncertainty, and it punishes job creation." This, of course, is total malarkey.
Tax rates on the rich were higher during the Clinton years, when the economy was booming, and higher still during the long post World War II boom, when the economy grew at nearly 4 percent per year for better than two decades and the great blue collar middle class was built.
If people have money in their pockets, businesses invest, investors make a bundle and willingly pay taxes on it. If the economy is flat, tax cuts won't fix it. Most of the people hit by the proposed surtax are those who have continued to make out like bandits despite the distress in the rest of the economy.
Obama was quite effective on that point in his jobs speech of September 8. He said in part:
Right now, Warren Buffett pays a lower tax rate than his secretary -- an outrage he has asked us to fix. We need a tax code where everyone gets a fair shake, and everybody pays their fair share.
Obama will call his surtax "the Buffett Rule" in honor of the billionaire who wants higher taxes and who once said of class warfare that there was indeed a class war in America and his class, the very rich, were winning.
But in the rest of the September 19 speech, Obama is expected to emphasize deficit reduction, a cause near and dear to the financial elite.
If ever there were a time when a touch of class was good politics, it is now. But deficit reduction as a cure for a prolonged jobs recession not only mixes the message. It does nothing to put unemployed people back to work and it deprives government of the resources it needs to help the needy and get the economy back on track.
Cutting Medicare is even worse politics. If you wanted to address the projected shortfall in Medicare in a fashion that was sensitive to class, you might propose giving Medicare the authority to negotiate bulk discounts with drug companies. You might point out that it was Republicans under President George W. Bush who explicitly stripped government of that authority.
Obama's proposed cuts that are part of a bipartisan deficit reduction package will take money away from a whole range of early childhood and income-support programs that help the working poor. In a deep jobs recession, that's class warfare, big time, and it's the wrong kind.
As for the proposed tax increase, one might applaud more if it were part of a bigger-ticket jobs program. Regular people support the principle of taxation based on the ability to pay -- but not because most Americans like soaking the rich as an end itself. The idea has far more resonance if it is part of a believable strategy to end the jobs recession and restore broad prosperity.
Since Republicans are going to block this proposed tax in any case, Obama's advisers can wink at the Wall Street millionaires who are financing his campaign and signal that there is no cause to worry.
While Obama is willing to include a whiff of class when it comes to proposing new sources of revenue to reduce the deficit, he is still in thrall to financial elites who want to bet the farm on deficit reduction as a cure for the larger economic recession. That is dubious economics and worse politics.
If you are going to practice the politics of class, is some consistency too much to ask? The proposed Buffett tax takes a token swipe at the very rich, while much of the rest of the program cuts outlays that help the working and middle class -- and blurs distinctions with Republicans.
As long as Republicans are going to condemn Obama as a class warrior, he might as well earn the label.
Robert Kuttner is co-editor of The American Prospect and a senior fellow at Demos. His latest book is A Presidency in Peril.
President Set to Unveil New Millionaires Tax
Obama planning a millionaire's tax called "Buffett's Rule," named for Warren ...
Wendy sells burgers for the same price to anyone...so does Apple or Nike or AT&T or Brinks security service....
Waht govt takes different amount of money from differnt people?
And then let's look at it this way. Say you make $50K a year and you pay 10% in taxes - that's $5K, so now your income is $45K ....or say you earn $25K a year, so your tax liability would be $2500. In reality it's pretty hard to live on $25K a year, so now you get to live on $22,500. What about all the other taxes you pay...state sales tax, state income tax, gas tax, phone tax, electric tax, sewer tax, property tax, school bond taxes, license plates, and, of course, FICA. So by the time you get done paying all those taxes/fees that are NOT going to go away, just how much money will you have left to pay your health,car insurance, the mortgage/rent, the phone, the gas/electric, and the cable bill, feed the kids, and sock something away for the college education or your retirement?
That's WHY we have a progressive tax system in this country.
If you want to change that, you'd better be careful what you wish for.
Two things.
1. The high tax payers get back less then the no tax payers (hence the name "takers"). for e.g. my son is done schooling but I still pay huge amount of money which goes to school system. Even when my son was in school the entire 12 years i think I was not only paying for his schooling but also for another 2.8 students ...in return for poor standard of education.
2. Most of the charges you mentioned above should be based on consumption only as "charges". not as taxes. Hence if you use the service you pay for it. otherwise you do not. if you do not buy gas you do not pay gas-tax / charge. if you do not have a phone you do not need to pay for phone tax/ charge. (BTW why if govt taxing on phone service which is rendered by a private company?)
finally if we make for every $1000 you pay as tax you get one extra vote then the system will be equitable. because you have a vested interest int eh welfare of the govt and you are entitled to question how you money is being spent. unlike in govt it tax my money and gives it to Union thugs
http://www.colbertnation.com/the-colbert-report-videos/397491/september-20-2011/barack-obama-unveils-the--buffett-rule-
To Republic'CONS', I say f......k your class-warfare. Just pay your f...,ing dues! Free ride is over, dudes! It is time to pay up or shut up!
How about the disabled?
How about the working poor who only make minimum wage? What's their fair share?
How about we increase the minimum wage so they CAN pay taxes? Rather than allowing employers to pay a minimum wage and provide no health care so the rest of us can pay for them via Medicaid and foods stamps?
All this has been for years and years is corporations and businesses shifting the burden to the taxpayers so they can have cheap workers and no benefits to pay for them...until, of course, the took our jobs overseas with the blessing of government, so now we have fewer and fewer who can pay taxes since they are effectively wiping out the middle class.
Please see the forest and not just the trees they want you to focus on.
Most people think his secretary pays more taxes than he does, but that can't be true. If it is, then Buffett is abusing the tax code. I would like to see both 1040s from Buffett and his secretary before I can believe in the Buffett rule. If Obama follows the "Buffet rule" he is agreeing to more deception. So what else is new? Now you know!
corps have always been considered "individual" under the law. the supreme court simply clarified what has always been.
as far as money buying elections i believe obama has garnered records money levels so far for 2012.
his 2008 largest contributors ...... note GE @ hal a million .... you know them the big bad ZERO taxpayer.
University of California
$1,648,685
Goldman Sachs
$1,013,091
Harvard University
$864,654
Microsoft Corp
$852,167
Google Inc
$814,540
JPMorgan Chase & Co
$808,799
Citigroup Inc
$736,771
Time Warner
$624,618
Sidley Austin LLP
$600,298
Stanford University
$595,716
National Amusements Inc
$563,798
Wilmerhale Llp
$550,168
Skadden, Arps et al
$543,539
Columbia University
$541,002
UBS AG
$532,674
IBM Corp
$532,372
General Electric
$529,855
US Government
$517,908
Morgan Stanley
$512,232
Latham & Watkins
$503,295
Conservatives have perfected the art of mouthing talking points as a way of avoiding meaningful discussion.
What is not "fair" is that the top 1% skims off 19% of the income. What is not "fair" is that the top 1% has grabbed 40% of the wealth. What is not "fair" is that the top 1% uses their wealth to perpetuate the system that has profited them so much at the expense of the bottom 80%.
Are you afraid that those 47 percent might actually have a modicum of comfort in their lives?
I know a lot of bottom 47% and they are there do to their own accord. They waste their money and think they can just spend it all every week, and run up their credit cards. At some point the bill man is going to come. As Tyler Dryden said "the things that you own end up owning you".
Considering that his opponents are drawn from the Marie Antoinette School of Economics, Mr. Obama doesn't have to try very hard.
Progressive tax rates is not class warfare, it is called "joyful giving required by laws" if you are really religious as most of you making the claim!
Apparently, the Swedish people are smarter than us. They pay a lot in taxes in comparison in order for them to build a strong and stable social and economical society. The Swedish people understand the concept of shared sacrifice for the good of the public and national interests. It is ob vious that some of the Republi'cons' party leaders and their super-and-mega rich wealthy Americans don't give a sh..t if America is going down the toilet as long as it does not affect their personal banking account!