… we think we live in a democracy, but mostly we just watch the rich fight. We just get lucky when a few of them fight on our side.
Thursday, January 10, 2013 7:56 pm
Wednesday, November 28, 2012 7:54 pm
Pretty much every single professional journalist in Washington, and a lot of regular Americans, think there are virtues to be had in balance, moderation and centrism. Perhaps as an extension of that belief — for it certainly is not on the basis of even moderately complicated economics, or, for that matter, mathematics — they believe that both the rich and the poor must give something up to address the nation’s budget issues.
(I refuse to call them budget problems, let alone crises; they are issues in the way that we say that sociopaths have issues in that they are the perfectly predictable, and pretty well predicted, results of predictably sociopathic decisions made by known sociopaths.)
So a lot of people who either ought to know better, or who do know better but stand to profit from pretending otherwise, are out there arguing that we need to screw the rich a tiny bit and the middle class and poor a lot to “fix” the deficit (which is fixing itself pretty nicely at the moment, plunging dramatically as a percentage of GDP, but never mind that) and that if both sides are angry, as they are about the nonexistent Simpson-Bowles “report,” then we must be doing the right thing. The problem, of course, is that not all anger is justified, valid, moral or even sane, as Charlie Pierce reminds us:
Can we please have an honest assessment of credibility here? If billionaires are angry because they might have to chip in some boutonniere money on April 15, and a middle-class family is angry because their 82-year old grandmother with Alzheimer’s is lying in her own filth in a substandard nursing home because of Medicare “reforms,” are we honestly saying that the anger of both sides is equally justified? Has anyone even asked that question?
To the best of my knowledge, no one in the DC media has asked this question, and my friend Doug Clark at the N&R, who’s usually much more sensible, doesn’t seem to be concerned with it, and, hey, I’ve got a blog, so I thought I’d raise it here.
Wednesday, November 14, 2012 6:56 pm
OK, if you don’t want to repeat after me, kids, repeat after Kevin Drum: There. Is. No. Fiscal. Cliff.
The former Calpundit and Political Animal econowonk, now with Mother Jones, explains it all for you:
Which part has the worst effect: the spending cuts or the tax increases?
That’s tricky! CBO estimates that the effect per dollar is greater for spending cuts than tax increases: roughly a dollar of GDP for every dollar of spending cuts versus about half a dollar of GDP per dollar of tax increases.
However, the absolute size of the tax increases is much larger than the absolute size of the spending cuts. Overall, CBO estimates that the spending cuts will reduce GDP by about 0.8 percentage points; the end of the payroll tax holiday will reduce GDP about 0.7 percent; and the expiration of the Bush tax cuts will reduce GDP by 1.4 percentage points.
But wait a second. There are two parts to the Bush tax cuts: the middle-class cuts and the cuts for the rich.
Right. And here’s the thing: CBO figures that letting the middle-class tax cuts expire would shrink GDP about 1.3 percentage points.
But that’s almost the entire effect of letting the Bush tax cuts expire.
Right. And everyone agrees we should extend the middle-class tax cuts. So if we did that, but let the tax cuts on the rich expire, it would have virtually no impact on growth.
So that would make a ton of sense. Are we going to do that?
Good question! Republicans are dead set against it, so it’s going to be a big fight.
What about the payroll tax holiday?
Everyone seems willing to let that end, so that’s not really very controversial.
Why is that? It has a pretty big effect.
Beats me. It would make a lot more sense to extend the payroll tax holiday than to extend the Bush tax cuts for the rich, but Republicans are opposed to the tax holiday and Democrats have already caved in on this. Mostly it’s because they’re worried that extending it would set a precedent for keeping payroll taxes lower forever, and that would hurt Social Security’s finances.
Conversely, Republicans care a lot about tax cuts for the rich. At the moment, they claim they’ll kill any deal to avoid the fiscal cliff unless they get to keep them.
Are they serious?
There’s more, but that’s the gist. Having just been told by voters not to blow up the economy any more, the GOP is dead set on doing and the Dems are less than fully dead set on stopping them. Sigh.
There is some good news, though. President Obama has been asking the Republicans for $1.6 trillion over 10 years in tax increases ever since the Great Debt Ceiling Joke of 2011. He campaigned for a year on that very proposal. And on Nov. 6, he won by a — what’s that word, again? Oh, yeah, landslide. So, Mitch the Turtle and the Weeping Cheeto can just take that.
Oh, and Kevin also says, for the love of God, stop talking about raising the retirement age.
Thursday, August 9, 2012 8:37 pm
This, kids, is what they call a teachable moment, courtesy of BooMan. Suppose this story were going around …
Mitt Romney isn’t really a Mormon. He’s an atheist who only went along with his father’s faith so he could duck the Vietnam draft. He didn’t actually try to convert anyone when he was in France either. In reality, he spent all his time in Monte Carlo gambling and buying high-end hookers. When his daddy found out what he was doing, he made him come home and marry his high school sweetheart. Actually, he only made him marry her after the second time she got pregnant. The first time, they got an abortion. Then Romney started using some of the mafia connections he had made in Marseilles to import heroin. By the time he became governor, they were flying it straight into a secret airport they set up in the Berkshires. When one of the pilots started to talk, Romney had him killed.
If any of this sounds familiar, it’s because it’s an amalgam of stuff that has been said about our past two Democratic presidents, personalized a bit for Romney.
Now. Sen. Harry Reid has claimed that a source whom he won’t name, but who supposedly was involved in Romney’s firm, Bain Capital, says Romney paid no federal income taxes for 10 years. Not only has the Poynter Institute’s Politifact claimed that Reid’s pants are on fire, even liberal pundits like Kevin Drum are accusing Reid, on the basis of zero evidence, of lying. BooMan concludes with this useful observation:
Now, if we started telling these stories to people, and a substantial percentage of the population started to actually believe these stories, and if congressmen humored and even encouraged the people who believed these stories, and if media figures talked about these stories, and if Congress actually had hearings about some of these stories, then Mitt Romney would know what it’s like to be treated like a Democrat.
Stuff like this is where the notion that there’s a lower bar for the GOP, that IOKIYAR*, originates.
Now, I really wish Reid’s source, if the person exists, would come forward. And if the source doesn’t exist, then I’ll be the first to say Reid deserves whatever happens to him, whether it’s being hauled up before the Senate Ethics Committee, toothless as it might be, or sued.
But as much as I respect U.S. journalists who attempt to fact-check politicians, they have committed some serious failures of both logic and context in criticizing Reid for an accusation that, while unproven, is not demonstrably false and that Romney himself could easily disprove if it were.
Wednesday, July 25, 2012 8:04 pm
I am financially successful now; I pay a lot of taxes. I don’t mind because I know how taxes helped me to get to the fortunate position I am in today. I hope the taxes I pay will help some military wife give birth, a mother who needs help feed her child, help another child learn and fall in love with the written word, and help still another get through college. Likewise, I am in a socially advantageous position now, where I can help promote the work of others here and in other places. I do it because I can, because I think I should and because I remember those who helped me. It honors them and it sets the example for those I help to help those who follow them.
I know what I have been given and what I have taken. I know to whom I owe. I know that what work I have done and what I have achieved doesn’t exist in a vacuum or outside of a larger context, or without the work and investment of other people, both within the immediate scope of my life and outside of it. I like the idea that I pay it forward, both with the people I can help personally and with those who will never know that some small portion of their own hopefully good fortune is made possible by me.
So much of how their lives will be depends on them, of course, just as so much of how my life is has depended on my own actions. We all have to be the primary actors in our own lives. But so much of their lives will depend on others, too, people near and far. We all have to ask ourselves what role we play in the lives of others — in the lives of loved ones, in the lives of our community, in the life of our nation and in the life of our world. I know my own answer for this. It echoes the answer of those before me, who helped to get me where I am.
Wednesday, May 2, 2012 8:41 pm
Why I’d like to have a beer with Stephen King rather than George W. Bush — and might not even insist that he pay:
Chris Christie may be fat, but he ain’t Santa Claus. In fact, he seems unable to decide if he is New Jersey’s governor or its caporegime, and it may be a comment on the coarsening of American discourse that his brash rudeness is often taken for charm. In February, while discussing New Jersey’s newly amended income-tax law, which allows the rich to pay less (proportionally) than the middle class, Christie was asked about Warren Buffett’s observation that he paid less federal income taxes than his personal secretary, and that wasn’t fair. “He should just write a check and shut up,” Christie responded, with his typical verve. “I’m tired of hearing about it. If he wants to give the government more money, he’s got the ability to write a check—go ahead and write it.”
Heard it all before. At a rally in Florida (to support collective bargaining and to express the socialist view that firing teachers with experience was sort of a bad idea), I pointed out that I was paying taxes of roughly 28 percent on my income. My question was, “How come I’m not paying 50?” The governor of New Jersey did not respond to this radical idea, possibly being too busy at the all-you-can-eat cheese buffet at Applebee’s in Jersey City, but plenty of other people of the Christie persuasion did.
Cut a check and shut up, they said.
If you want to pay more, pay more, they said.
Tired of hearing about it, they said.
Tough shit for you guys, because I’m not tired of talking about it. I’ve known rich people, and why not, since I’m one of them? The majority would rather douse their dicks with lighter fluid, strike a match, and dance around singing “Disco Inferno” than pay one more cent in taxes to Uncle Sugar. It’s true that some rich folks put at least some of their tax savings into charitable contributions. My wife and I give away roughly $4 million a year to libraries, local fire departments that need updated lifesaving equipment (Jaws of Life tools are always a popular request), schools, and a scattering of organizations that underwrite the arts. Warren Buffett does the same; so does Bill Gates; so does Steven Spielberg; so do the Koch brothers; so did the late Steve Jobs. All fine as far as it goes, but it doesn’t go far enough.
What charitable 1 percenters can’t do is assume responsibility—America’s national responsibilities: the care of its sick and its poor, the education of its young, the repair of its failing infrastructure, the repayment of its staggering war debts. Charity from the rich can’t fix global warming or lower the price of gasoline by one single red penny. That kind of salvation does not come from Mark Zuckerberg or Steve Ballmer saying, “OK, I’ll write a $2 million bonus check to the IRS.” That annoying responsibility stuff comes from three words that are anathema to the Tea Partiers: United American citizenry.
I’m not going to argue that King makes a great logical argument in favor of higher marginal tax rates on the wealthy. (And that’s OK; the Krugmans and Buffetts and DeLongs and Bakers of the country have that covered.) But he does at least three other worthwhile things here.
First, he leads by example. He and Tabby give away $4 million a year, and not to Deerfield Academy, either, but to local fire departments and such.
Second, although rich and influential himself, he’s using that wealth and influence to force people who don’t want to have this converation to have it anyway, which, in reverse, is what they’ve been doing to us for the past 35 years. Since the Reagan era, a lot of conservatives have implicitly, and sometimes explicitly, taken the position that anyone who disagrees with them on the merits of their policy goals shouldn’t even be allowed to be part of the conversation. To a frightening extent, particularly on economic policy, they’ve achieved that goal: It is not impossible, but it is very, very difficult, to get views other than the orthodoxy of the wealthy expressed, and issues covered, in 21st century America’s corporate-controlled mainstream media. And this fact alone is causing needless human suffering, because what this country needs to do right now to fix the particular set of economic problems we face is actually quite well known not only among economists but among a large subset of the subset of Americans who regularly pay attention to politics and policy. And yet those positions, compared with, say, pro-austerity arguments, get vanishingly little public-sphere display even as austerity is demonstrably making things worse. So it is heartening, to say the least, to watch King — who, while he may describe himself as “baby rich,” actually has what most of us would consider “f— you” money — wade into this argument and say: No. No, we’re NOT going to stop talking about this, because we’re right and you’re wrong and so the least you sorry, selfish sonsabitches can do is sit here and listen to us for a few minutes.
Second, he demolishes a particularly stupid argument against higher rates in a way that, because it’s simple and because it’s Stephen Effing King saying it, a lot of people are going to see who otherwise wouldn’t.
Third, he restates forcefully and without apology a truth the Randian apologists desperately wish didn’t exist: We’re all in this together:
Mitt Romney has said, in effect, “I’m rich and I don’t apologize for it.” Nobody wants you to, Mitt. What some of us want—those who aren’t blinded by a lot of bullshit persiflage thrown up to mask the idea that rich folks want to keep their damn money—is for you to acknowledge that you couldn’t have made it in America without America.* That you were fortunate enough to be born in a country where upward mobility is possible (a subject upon which Barack Obama can speak with the authority of experience), but where the channels making such upward mobility possible are being increasingly clogged.
*A subject I addressed recently here.
Stephen King won’t win this war singlehandedly. No one will; that’ll take all of us. But it is a war, even if most of us didn’t choose it and had no idea it was coming. And it’s nice to know that in a war against the side with all the weapons, the side that gets to make most of the rules, we at least have a few folks like Warren Buffett and Stephen King on our side.
Friday, January 27, 2012 8:32 pm
Economist Jared Bernstein of the Center for Budget and Policy Priorities explains:
One reason multi-millionaire investors like Gov. Romney face 15% tax rates is because they engage in corporate activities but avoid corporate taxes. They do so by taking advantage of policy changes that have made it easier to pass capital gains through the corporation to their personal income, where, in the case of PE managers, they tap a double loophole. First, capital gains are taxed at less than half the rate of normal income, and second, even though these gains are really earnings for the fund managers, they get to claim them as capital gains (this is the notorious “carried interest” loophole).
As my CBPP colleagues Chuck Marr and Brian Highsmith wrote here:
Although businesses operating through C corporations [standard corporations] are subject to corporate taxes, the capital income of non-incorporated businesses is “passed through” to the business owners. These owners benefit from the same tax deductions and credits as do corporations, but are taxed only at the individual level. Over the past half century, and particularly during the 1980s and 1990s, states and the federal government significantly expanded the legal benefits of pass-through entities. These changes have made it easier for firms to operate through such legal structures as S corporations, partnerships, limited liability companies, and sole proprietorships — while also benefiting from limited liability and other provisions that formerly were available only to corporations.
As you see in the figure, the share of receipts passed through to non-incorporated business has almost tripled since 1980s, up from 13% to 35%.
Source: IRS, (h/t: BH)
Moreover, it’s a good example of what happens when you open up these loopholes. The elasiticities attached to changes in tax rates are wildly exaggerated by conservatives and trickle downers who argue that the slightest increase will end the economy while any decrease will trigger boom times. The evidence belies their view in terms of jobs, investments, and growth.
But when it comes to sheltering your income (e.g., passing through corporate income to the personal side to tap loopholes like carried interest), how you structure your investment vehicles, your preference for debt over equity financing (debt financing is very much favored by the tax code)—there you see very significant responses.
The question is, as posed above, does any of this add value—real value—to the economy beyond further enriching the rich? It’s not a simple question and the answer is probably less obvious than it sounds. There are unquestionably examples of PE firms that have taken over companies and discovered new efficiencies.
But neither is it a coincidence that the ascendency of this type of economic activity and the policies that support it have occurred during a period of sharply increasing inequality, weak job creation, and stagnant incomes for the middle class.
And Republicans think we need more of this, not less.
And don’t whine at me about “double taxation” (corporations paying income taxes, then investors having to pay taxes on dividends). If there weren’t huge benefits associated with being incorporated, not the least of them being the right to buy politicians without having to go to prison if what you do kills a lot of people, then businesses wouldn’t incorporate.
Monday, August 15, 2011 8:08 pm
Back in the 1980s and 1990s, tax rates for the rich were far higher, and my percentage rate was in the middle of the pack. According to a theory I sometimes hear, I should have thrown a fit and refused to invest because of the elevated tax rates on capital gains and dividends.
I didn’t refuse, nor did others. I have worked with investors for 60 years and I have yet to see anyone — not even when capital gains rates were 39.9 percent in 1976-77 — shy away from a sensible investment because of the tax rate on the potential gain. People invest to make money, and potential taxes have never scared them off. And to those who argue that higher rates hurt job creation, I would note that a net of nearly 40 million jobs were added between 1980 and 2000. You know what’s happened since then: lower tax rates and far lower job creation. …
Job one for the 12 [members of Congress who will be defining deficit-reduction details] is to pare down some future promises that even a rich America can’t fulfill. Big money must be saved here. The 12 should then turn to the issue of revenues. I would leave rates for 99.7 percent of taxpayers unchanged and continue the current 2-percentage-point reduction in the employee contribution to the payroll tax. This cut helps the poor and the middle class, who need every break they can get.
But for those making more than $1 million — there were 236,883 such households in 2009 — I would raise rates immediately on taxable income in excess of $1 million, including, of course, dividends and capital gains. And for those who make $10 million or more — there were 8,274 in 2009 — I would suggest an additional increase in rate.
My friends and I have been coddled long enough by a billionaire-friendly Congress. It’s time for our government to get serious about shared sacrifice.
Buffett, in simple language, explains just how rigged the system is in favor not only of the wealthy but also in favor of those whose income is derived from investments rather than labor.
Wednesday, April 21, 2010 8:49 pm
Friend John Cole speaks my mind:
I’m sitting here after dinner, about to have a glass of wine, thinking about what I would do with my all my money if I had millions of dollars. You know what isn’t on the list?
Whine about how much I pay in taxes. Can someone please “punish” me by throwing me in a higher tax bracket? Pretty please? Hell, I’ll take the highest tax bracket you got if I get the kind of money you need to make to be in it. Punish me. Give me your best shot. Really put the screws to me.
Thursday, April 15, 2010 10:50 pm
No overarching conclusions about the group’s beliefs/motives here, but a few things have emerged from the primordial media ooze to gain purchase on the shifting sands of my awareness:
- When Dick Armey and FreedomWatch are organizing and funding a lot of your efforts, you can be a lot of things, but “grass roots” is not one of them.
- In general, I, too, worry about budget deficits. But, having not slept through Econ 101 (got a B, in fact), I understand that when consumer demand has collapsed and jobs are hemorrhaging, the government has to spend because no one else is going to. And it’s funny how so few of those NOW worried about deficits worried about them between 2001 and 2008.
- One thing I don’t worry about is the notion that federal income taxes are unacceptably high by any recent historical standard, because they’re just not. On the other hand, a recent CBS/New York Times poll found, teabagger concern about those taxes appears to have been overblown by anecdotal media reports: “Most [Tea Party movement supporters polled] describe the amount they paid in taxes this year as ‘fair.’”
- And, finally, although I’m willing to give teabaggers in general the benefit of the doubt on race issues, that doubt is significant all the same for this reason: that same poll found that:
- 25 percent think that the administration favors blacks over whites — compared with 11 percent of the general public.
- They are more likely than the general public, and Republicans, to say that too much has been made of the problems facing black people.
UPDATE: If the Christian Science Monitor is mocking you, you probably should just give up.
Sunday, March 21, 2010 9:24 pm
Radical liberal socialist Bruce Bartlett — and, by “radical liberal socialist,” I mean, “former official in the Reagan and Bush 41 administrations” — takes to the pages of the radical liberal socialist Web site Forbes.com to examine the beliefs of the Tea Party movement. And what does the Tea Party movement believe? Let’s just say Alice and the White Rabbit might recognize their world, but you and I wouldn’t:
Curious about the factual knowledge these people have regarding the issues they are protesting, my friend David Frum enlisted some interns to interview as many Tea Partyers as possible on a couple of basic questions. They got 57 responses — a pretty good-sized sample from a crowd that numbered between 300 and 500 people. (Survey results are here.) …
Tea Partyers were asked how much the federal government gets in taxes as a percentage of the gross domestic product. According to Congressional Budget Office data, acceptable answers would be 6.4%, which is the percentage for federal income taxes; 12.7%, which would be for both income taxes and Social Security payroll taxes; or 14.8%, which would represent all federal taxes as a share of GDP in 2009.
Not everyone follows these numbers closely, and Tea Partyers may have been thinking of figures from a few years ago, before the recession when taxes were higher. According to the CBO, the highest figure for all federal taxes since 1970 came in the year 2000, when they reached 20.6% of GDP. As we know, after that George W. Bush and Republicans in Congress cut federal taxes; they fell to 18.5% of GDP in 2007, before the recession hit, and 17.5% in 2008.
Tuesday’s Tea Party crowd, however, thought that federal taxes were almost three times as high as they actually are. The average response was 42% of GDP and the median 40%. The highest figure recorded in all of American history was half those figures: 20.9% at the peak of World War II in 1944.
To follow up, Tea Partyers were asked how much they think a typical family making $50,000 per year pays in federal income taxes. The average response was $12,710, the median $10,000. In percentage terms this means a tax burden of between 20% and 25% of income.
Of course, it’s hard to know what any particular individual or family pays in taxes, but according to IRS tax tables, a single person with $50,000 in taxable income last year would owe $8,694 in federal income taxes, and a married couple filing jointly would owe $6,669.
But these numbers are high because to have a taxable income of $50,000, one’s gross income would be higher by at least the personal exemption, which is $3,650, and the standard deduction, which is $5,700 for single people and $11,400 for married couples. Owning a home or having children would reduce one’s tax burden further.
According to calculations by the Joint Committee on Taxation, a congressional committee, tax filers with adjusted gross incomes between $40,000 and $50,000 have an average federal income tax burden of just 1.7%. Those with adjusted gross incomes between $50,000 and $75,000 have an average burden of 4.2%. …
Tea Partyers also seem to have a very distorted view of the direction of federal taxes. They were asked whether they are higher, lower or the same as when Barack Obama was inaugurated last year. More than two-thirds thought that taxes are higher today, and only 4% thought they were lower; the rest said they are the same.
As noted earlier, federal taxes are very considerably lower by every measure since Obama became president. And given the economic circumstances, it’s hard to imagine that a tax increase would have been enacted last year. In fact, 40% of Obama’s stimulus package involved tax cuts. These include the Making Work Pay Credit, which reduces federal taxes for all taxpayers with incomes below $75,000 by between $400 and $800.
According to the JCT, last year’s $787 billion stimulus bill, enacted with no Republican support, reduced federal taxes by almost $100 billion in 2009 and another $222 billion this year. The Tax Policy Center, a private research group, estimates that close to 90% of all taxpayers got a tax cut last year and almost 100% of those in the $50,000 income range. For those making between $40,000 and $50,000, the average tax cut was $472; for those making between $50,000 and $75,000, the tax cut averaged $522. No taxpayer anywhere in the country had his or her taxes increased as a consequence of Obama’s policies.
It’s hard to explain this divergence between perception and reality. Perhaps these people haven’t calculated their tax returns for 2009 yet and simply don’t know what they owe. Or perhaps they just assume that because a Democrat is president that taxes must have gone up, because that’s what Republicans say that Democrats always do. In fact, there hasn’t been a federal tax increase of any significance in this country since 1993.
I wonder if it will concern the mainstream national media at all that they’re paying such attention to a group that, by and large, doesn’t know what in the pluperfect hell it is talking about. I also wonder whether that same media will consider the question of whether their own poor job performance might be contributing to that ignorance.
Actually, no, on second thought, I don’t wonder at all.
People with ties to Glenn Beck’s 9-12 Project, Tea Party Boise and other conservative causes plan a protest outside Rep. Walt Minnick’s office this weekend, with the claim that the Idaho Democrat co-sponsored one of the health care bills that Congress is considering.
Their assertion is untrue, however; Minnick never sponsored such legislation…
Props to the RNC, which initially flogged this story, for admitting forthrightly that it had been mistaken. You don’t see the RNC do that every day.
(Full disclosure: The writer, Erika Bolstad, is a friend and former co-worker of mine.)