Greg Sargent hits Chris Christie dead center.
In an interview with CNN’s Piers Morgan, NJ Gov. Chris Christie attacked Warren Buffett for calling for higher tax rates on the wealthy. “Yeah, well he should just write a check and shut up,” Christie said. “Really. And just contribute. The fact of the matter is that 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.”
It’s kind of remarkable that Republican officials in positions of real influence and responsibility continue to repeat this silly line in public without any apparent sense of embarrassment.
Let’s try to walk through this really slowly. The problem that Buffett and other wealthy people are trying to solve by calling for higher taxes on their class isn’t simply that they as individuals would like to be contributing more towards the tax burden, but can’t. Rather, the problem as they’ve identified it is a society-wide one: We need a massive boost in revenues to keep society functioning at acceptable levels and to address profound and intractable fiscal problems that threaten the country’s future.
This problem will not be solved if Warren Buffett writes a check. Buffett’s point is that the scale of the problem requires his class as a whole to chip in a bit more to solve it. So doing will require relatively minimal sacrifice, and will prevent more of the burden for maintaining a functioning society — which helps enable wealth in the first place — from falling on those who are far less equipped to bear it. This won’t happen unless taxes are raised on the very wealthy. Voluntary contributions won’t quite cut it. This requires a society-wide solution.
Nothin’ but net. Buffett’s got a lot of money, but he can’t make a dent in the national debt. A bunch of Warren Buffetts can. What Christie — and the rest of the Republican Party — is doing in response to Buffett’s argument is pretending to be stupid. At least, I hope they’re pretending. They pretend to completely misunderstand what he’s saying, which allows them to offer a strawman in response.
“By the way, the ‘just shut up’ response to inequality is not exclusive to Christie,” Sargent points out. “As you’ll recall, the GOP’s likely standard-bearer, Mitt Romney, recently opined that we should confine our discussion of these matters to ‘quiet rooms.’”
That’s because it’s an argument for which they have no answer. They want us to shut up about it, so they can stop pretending to be so dumb.
'Hey Mitt. Workin' hard or hardly workin'?'
Mitt Romney — and the entire Republican Party, for that matter — like to argue that rich people deserve big, fat tax breaks because they worked so hard for their money. Fellow rich guy Warren Buffett knocks that argument down:
He makes his money the same way I make my money. He makes money by moving around big bucks, not by straining his back and going to work cleaning the toilets or whatever it may be. He makes it shoving around money. I make it shoving around money. If you look at the 400 highest incomes in the United States, they average $220 million. Something like 90 of them are effectively unemployed. They have no earned income, and that number has gone up over the years. […]
It’s the wrong policy to have. Nothing wrong about [Romney] doing that. He will not pay more than the law requires. I don’t fault him for that in the least, but I do fault the law that allows him and me, earning enormous sums to pay over all federal taxes at a rate that is about half what the average person in my office pays.
If being fabulously well-to-do were only a matter of how hard you worked, Mittens would be a pauper, while bricklayers and dock workers would be the 1%.
News Roundup for 8/23/11
Not a myth
-Headline of the Day-
"Bisexual men exist: study."
Yeah, yeah, yeah. There was an earthquake in DC. You don’t need to hear about that from me. If there’s one thing an earthquake in Washington is going to get, it’s plenty of press coverage. Think about it; that’s where all the reporters are. If it had happened in Kansas City, the media response would be, “Weird, huh?” and then they’d move on. But it happened to them, making it the biggest, most important news story ever.
So it falls to me to do the heavy lifting and report the real big story of the day. And that big story involves hooking up high-techy doo-dads to guys’ wing-wangs and showing them porn, because scientific discovery is how civilization advances.
See, there was actually some question as to whether bi fellas existed after a 2005 study by Northwestern University turned up inconclusive. In that study, “men who identified themselves as bisexual were in fact exclusively aroused by either one sex or the other, usually by other men.”
Perhaps the quality of the porn was an issue, because this time around Northwestern got a result. Awesome porn of one category and lousy porn of the other would skew the results, after all. I don’t know. Just throwing it out there. Just being all pundity and engaging in baseless speculation. In any case, all those guys who say they’re bi are really bi. Not really clear on why we ever doubted them in the first place, but there ya go. We’ve got proof now. It’s science.
Progress marches on. (Raw Story)
-Buffetted by criticism-
Warren Buffett’s call to raise taxes on the very rich draws a spirited response.
Click to embiggen
Might as well be a photograph. (McClatchy)
"Rebels Breach Walls of Gaddafi Compound."
Whatever. You hear about that earthquake? I understand it knocked over a lawn chair! (Crooks and Liars)
Stories to Watch: 8/21/11
Breaking Bad again tonight. Best show on TV. Now here’s the news…
Rep. Maxine Waters does not think much of the Tea Party. They’re not happy with being told to “go straight to hell,” but with polling showing them less popular than even atheists and Muslims — two groups the ‘baggers frequently attack — they get to suck it.
Hypocrisy and phoniness, thy name is Rick Perry — in more ways than one.
Charles Koch responds to Warren Buffett’s op-ed calling for higher taxes on the rich by claiming that being one of the nation’s top polluters makes him a boon to mankind. To paraphrase Spiderman; with great power comes a great big freakin’ ego.
The obvious becoming clearer and clearer (and, you hope, more and more undeniable); the NYT reports that pretty much everyone who knows is warning that GOP politicking, posturing, obstructionism, hostage-taking, and boneheaded ideological certainty is driving America straight toward an economic cliff. James Fallows calls it a must-read.
Former New York Gov. George Pataki may be the next shiny object the media fixates on — Gov. Rick who?
File under “confirmation of the obvious”: a close look shows that the Tea Party is authoritarian, not libertarian.
Finally, what Republican voters — and especially Tea Partiers — believe is 100%, perfectly bass-ackward wrong. Example; Republicans want to raise taxes, while President Obama works to stop them.
An Unsustainable Free Ride for the Wealthy
Let’s start out by talking about a flat tax. At one point, a flat tax was all the rage among conservatives. For many, it’s still a fave. When someone on the right talks about “simplifying the tax code,” what they really mean is flattening the tax rate. If everyone paid the same percentage and there were very few deductions, everything would be “fairer,” they argue. People making a lot of money are “punished for success” by being pushed into a higher tax bracket. Never mind that this “punishment” doesn’t seem to be much of a deterrent, since the total number of US millionaires is expected to double by 2020, as the income inequality between the wealthy and everyone else grows at an astonishing clip. The wealthy are gluttons for this particular punishment, apparently.
Now, keep a flat tax — the conservative favorite — in mind while you read this quote from an op-ed by Berkshire Hathaway CEO Warren Buffett, one of the richest people in the world.
Last year my federal tax bill — the income tax I paid, as well as payroll taxes paid by me and on my behalf — was $6,938,744. That sounds like a lot of money. But what I paid was only 17.4 percent of my taxable income — and that’s actually a lower percentage than was paid by any of the other 20 people in our office. Their tax burdens ranged from 33 percent to 41 percent and averaged 36 percent.
If you make money with money, as some of my super-rich friends do, your percentage may be a bit lower than mine. But if you earn money from a job, your percentage will surely exceed mine — most likely by a lot.
That’s right, a flat tax would actually be better than what we’re paying now. We now live in an upside-down world where an office worker is taxed at a higher percentage than the CEO of the same company. Do the wealthy still pay more in total than everyone else? Of course they do. But if we take the flat tax as a serious argument, we have to conclude that even conservatives believe the rich should pay more than everyone. They may not say so outright, but it’s the only logical conclusion to the sets of facts. Even Republicans believe that the wealthy should send more total to Washington than the average citizen.
I don’t bring this up as an endorsement of a flat tax — which I believe is fiscal insanity — but to point out just how insane our current tax rates are. If a flat tax is idiotic, then our current system is worse, by virtue of being not-flat in the wrong direction.
"I know well many of the mega-rich and, by and large, they are very decent people," Buffett goes on. "They love America and appreciate the opportunity this country has given them. Many have joined the Giving Pledge, promising to give most of their wealth to philanthropy. Most wouldn’t mind being told to pay more in taxes as well, particularly when so many of their fellow citizens are truly suffering." He calls on Washington to "stop coddling the super-rich."
And he’s right for several reasons, not the least of which is that if we increase taxation rather than cut spending, the wealthy will actually be better off. Republicans have tried to repeal the law of supply and demand, but reality is a stubborn thing and will not be dismissed by wishful thinking — no matter how earnest all that wishing may be. If the government spends more, this has the effect of increasing demand — including demand for labor — and the increased employment and consumer spending will send money all the way to the top (money gushes up, it doesn’t “trickle down”). In the meantime, tax revenues for the lower brackets will also increase as people become better off. Wealth isn’t created by tax cuts, wealth is created by working and spending and borrowing. In fact, borrowing probably makes up the biggest chunk of wealth creation, since it’s the source of all interest. If you want a quick explanation of this, check out the "run on the bank" scene in It’s a Wonderful Life — “The money’s not here. Why, your money’s in Joe’s house…” If we increase demand to the point where people spend, that’s great. If we increase it to the point where people feel safe enough to borrow, that’s even better. And maintaining a stupidly bass-ackward rate of taxation just isn’t doing the job.
Would raising taxes on the wealthy be political suicide? Not at all. Polling shows it’s only slightly less popular than free beer. And, despite the claims of Republicans that these tax hikes would hit the upper middle class, the fact is that just 3% would see their taxes go up if the increase were set at households earning $200,000 or more, as President Obama has proposed in the past. And the increased revenue from the tax hikes, combined with the increased tax revenues from higher wages and employment spurred by government spending, would go a long way toward reducing our deficit. Republicans want to run government like a business? Fine. Just remember the old business dictum; “It takes money to make money.”
When your tax burden is so weighted toward people at the bottom of the economic ladder that a flat tax would actually be an improvement, then something is really out of whack. This needs to be fixed, because the current system heads no place but down and everything we’re seeing happen to the economy today will only get worse. It’s clearly unsustainable.
Stealing America Right From Under Our Noses
"Yes, ‘there’s class warfare, all right,’ warns Warren Buffett. ‘But it’s my class, the rich class, that’s making war, and we’re winning.’"
That quote, much beloved by liberals concerned with economic justice, opens a piece at MarketWatch by Paul B. Farrell. Farrell then goes on to agree with Buffett and take the argument further; there’s a “new American Civil War between the rich and the rest.” Buffett, the billionaire investment capitalist behind Berkshire Hathaway, issued his warning in a New York Times op-ed back in 2006. It was true then, but it’s much truer now. Led by gains at the state level, Republicans are moving to strip the poor and the middle class of things they’ve paid for with their tax dollars or worked for at their state jobs, then take all that money and give it to the wealthy.
But that’s only the start. Writes Farrell:
Not just the 16 new GOP governors in Wisconsin, Michigan, Ohio, Florida, and across America fighting for new powers. Others include: Chamber of Commerce billionaires, Koch brothers, Forbes 400, Karl Rove’s American Crossroads, Grover Norquist’s Americans for Tax Reform — which now has 97% of House Republicans and 85% of the GOP Senators signed on his “no new taxes” pledge — the Tea Party and Reaganomics ideologues.
Wake up America. You are under attack. Stop kidding yourself. We are at war. In fact, we have been fighting this Civil War for a generation, since Ronald Reagan was elected in 1981. Recently Buffett renewed the battle cry: The “rich class” is winning this war. Except most Americans still don’t realize they’re losing, don’t see the prize at stake.
All this was predicted back in September 2008 by Naomi Klein, author of Shock Doctrine: The Rise of Disaster Capitalism. Yes, we were warned that the GOP’s Reaganomics ideology would stage a rapid comeback… warned before the market collapsed… before Wall Street was virtually bankrupt… before Treasury Secretary Henry Paulson conned Congress into $787 billion in bailouts… warned before Obama’s 2008 election.
So who is this granola-crunching hippie/commie who cites Naomi Klein and disses Reagonomics? His bio at the site tells us that Paul B. Ferrell is “the author of nine books on personal finance, economics and psychology, including ‘The Millionaire Code,’ ‘The Winning Portfolio,’ ‘The Lazy Person’s Guide to Investing.’ Farrell was an investment banker with Morgan Stanley; executive vice president of the Financial News Network; executive vice president of Mercury Entertainment Corp; and associate editor of the Los Angeles Herald Examiner" — i.e., a capitalist in the purest sense of the word.
Here in Wisconsin, Gov. Scott Walker wants to raise taxes on the poor, not long after he pushed through $100 million new spending and tax giveaways that mostly benefit the wealthy and corporations. Having given away the store, Walker suddenly declared a huge budget emergency that called for draconian cuts to everything from water safety to recycling programs. And, of course, programs that help the poor and middle class. In addition to the big tax hike families in need would face, they’ll also to pay more for healthcare, as the state slashes Medicaid spending. Meanwhile, the state has hot and cold running corporate welfare. Never in history has “shared sacrifice” involved so little sharing of so much sacrifice.
In Florida, Gov. Rick Scott shares Walker’s vision of a corporate paradise built by taking from teachers to give to the rich. In Tennessee, Gov. Bill Haslam wants to cut higher education and the state’s TennCare program, which helps cover the uninsured — all to fund a private, for-profit prison.
But the worst is in Michigan, where the state has declared virtual economic martial law and the legislature has given the governor the power to overturn elections and turn local governments over to private concerns. This is the Republican love of privatization taken to its most extreme; privatize literally everything, up to and including the mayor’s office, the school board, and the police and fire departments. On the bright side, it’s impossible for me to believe that even our current Supreme Court would find this constitutional.
These are all examples. An exhaustive list would be exhaustive in every sense of the word — it would probably take me a sleepless week to track it all down and put it all together. Suffice it to say that, no matter where you are, there’s probably a Republican who’s either taking something away from you to give to someone who doesn’t need it or a Republican who wants to so badly they can taste it. Farrell and Buffett cast all of this as a war, but I have a better word for it: a heist.
This is all stuff you own. This is all stuff you paid for. This is all stuff you worked for. And it’s being given away to the Republicans’ wealthy donors. State by state, district by district, city by city, the nation is being disassembled and given away — not even sold off — by ideologues and economic flatearthers and straight-out crooks. I guarantee, what was lost so casually won’t be regained as easily.
And when the smoke clears, you won’t have a damned thing to show for it, other than the constant reassurances that you’re living in a free market Utopia and it’ll all work out great — eventually. All you have to do is keep voting Republican, so they can keep giving all your stuff away.