It remains to be seen what kind of deal Obama will be able to wrestle out of the House this year or next, but in the meantime billionaire investor Warren Buffet paddles the spoiled rich with a vengeance in the NYT. Billmon follows up with up a salient point where upon the GOP toys with throwing their mildly affluent base under the bus in favor of Kochwhores. First an excerpt from Buffet’s op-ed, which I highly recommend should be read in its entirety, titled Stop Coddling the Super Rich:
NYT– OUR leaders have asked for “shared sacrifice.” But when they did the asking, they spared me. I checked with my mega-rich friends to learn what pain they were expecting. They, too, were left untouched.While the poor and middle class fight for us in Afghanistan, and while most Americans struggle to make ends meet, we mega-rich continue to get our extraordinary tax breaks. Some of us are investment managers who earn billions from our daily labors but are allowed to classify our income as “carried interest,” thereby getting a bargain 15 percent tax rate. Others own stock index futures for 10 minutes and have 60 percent of their gain taxed at 15 percent, as if they’d been long-term investors.
Buffet goes on to propose a minimum stop-gap flat tax of 30% for adjusted gross income over a million and 35% for income over 10 million, regardless of the source, to make sure the super rich aren’t able to evade their obligation, and to defang the army of lawyers and lobbyists the tax cutting industry has built up over several decades. Writing at Daily Kos the talented Billmon points out where the GOP might get desperate and try to screw small business owners and mid level executives with the tax reform con:
But one of the real statistical smart guys — Nate Silver no less — once again has leapfrogged over a semi-comatose pundit class to get to the heart the matter. In today’s 538 column, he describes, with perhaps a bit too much math, the perverse consequences of the GOP’s plan. In essence, Nate notes, a deduction cap and/or rate clawback would create a “bubble” in the tax code: That is to say, the relatively rich would pay a higher top marginal rate than the insanely rich (i.e. the Mitt Romneys of the world).
Bingo. Tax reform spares the super rich because deductions measured in the thousands of dollars for things like dependents are meaningless to someone earning 50 million dollars a year. The GOP cannot be allowed to succeed with this chicanery for a number of reasons. Sure it’s profoundly unethical for lower earners to pay a higher effective tax rate than the top 500 richest trust fund brats. Just as important, the stranglehold the tax cutting industry has on the Republican party would be significantly weakened if democrats avoid this idea.
For starters there’s no need to do anything until a new Congress comes in. I wouldn’t turn down a sweetheart deal in the unlikely event Boehner and McConnell offer one before Christmas. But it better be a real, real good deal. There has been some talk among the GOP that they will accept higher revenues only by jiggling deductions millions of upper middle class families depend on, and with cuts to earned benefits hurting wage earners, entitlements by any other name (BTW, wtf kinda name is entitlements for those of us who have paid into Social Security and Medicare for decades? I think earned benefits is a better frame and any other suggestions are welcome). As someone who will rely on Medicare to stay alive, which is the case for basically everyone regardless of how healthy they might be now, I’m extremely skeptical. Find savings by negotiating with drug companies, scrutinize providers and insurance plans all you want. But until we see how Obama-care is implemented, especially in red states with teabagger beholden governors, let’s not herald the ACA as a savior to bridge any gaps resulting from raising the Medicare eligibility age.
The target here is the heart of the conservative movement: we regularly criticize fundies here on FTB, but they’re just a symptom. After Reagan slashed tax rates in the 80s a massive tax cutting industry developed and solidified around serving the very, very rich. The top 0.0001%, which includes people like Buffet, made out like bandits. That lobby grew like a mutant on steroids until it engulfed the entire Republican Party (And made worrisome inroads into the democrats). Virtually everything the GOP now does is geared around getting the super, super, super rich more money. Creationism, prayer in schools, and the home schooling movement? Funded and encouraged by zillionaire fundies who want to lower their local taxes. The deficit monster that stirs and roars whenever conservatives are out of power? All the better to scare us into voting away our social safety net, freeing up more dough for the super rich. Racism and sexism? A tried and true method for driving wedges between groups of middle class and poor people, who have much more in common with one another than they do with people who collect dancing horses and yachts. Job Creators and prosperity evangelism? Created by lackeys to codify the deification of the super rich in the minds of the religious.
Let me repeat the best part: we don’t have to do a goddamn thing! Simply by waiting and doing nothing the capital gains and income tax rates of the 90s will return, taking a huge bite out of that GOP plutocratic funding base and raising a howl of anger and indignation across the board, forcing House Republicans to the bargaining table with their tails tucked firmly between their legs. They will beg and lie and scream and pound the table for a tax cut for the less wealthy, the regular millionaire and middle wage earner, and be forced to throw their Kochs and their Romney funders under the bus. Less money means less influence and less predation for the pampered few at the expense of the rest of us. Waiting also means demonstrating, once again, how the debt can actually be managed, putting the deficit monster back to sleep.
It’s the right thing to do ethically and morally by any measure, except according to those few deviant theologies least representative of the values preached in the New Testament. It exposes the worst actors in the GOP and the religious community for what they really are for all to see. Best of all this President ran on it openly and the polls support it unequivocally. How often do the political stars line up like that for the good guys?
In short We the People are holding a winning hand. The only way we can lose it is by folding before the call is made. That’s really the only big risk that i can see: folding early is something democrats have been exceedingly good at for far too long.