By: Eugene Robinson, Opinion Writer, The Washington Post, January 26, 2012
“Magic Asterisks”: Buffett Rule Is Not Raising A Tax; It’s Closing Republican Tax Loopholes
The debate over the Buffett Rule is missing something important. As it stands, the fight is between Democrats who believe millionaires shouldn’t pay a lower tax rate than the middle class vs. Republicans who says no one’s taxes should go up by any amount at any time for any reason.
That’s a legitimate fight, to be sure, but there’s more to it: approving the Buffett Rule would mean closing a loophole, and in the larger context of the debate over tax policy, this makes all the difference in the world.
Let’s step back for a second. Paul Ryan’s House Republican budget plan appears to add an additional $5.4 trillion to the deficit over the next decade. Ryan insists that’s not the case — once he “clears out all the special-interest loopholes,” his numbers will start to add up.
Which loopholes? Well, it turns out that Ryan refuses to say. Maybe they’re secret loopholes; maybe they’re imaginary loopholes; but either way, he hasn’t identified any — literally, not one — loophole he’s willing to close to help pay for his own agenda. It is, as Paul Krugman put it, the “mystery meat” of the Republican plan.
“Oh, yeah?” my Republicans friends ask, “well why don’t Democrats come up with some loopholes to close?”
And therein lies the point: the Buffett Rule closes a loophole. It’s a quirk of the tax code that certain millionaires who enjoy private-equity riches pay a lower tax rate than middle-class families, and approving the Buffett Rule would not only mean establishing a degree of fairness, it would also mean scrapping this loophole.
The point is not lost on President Obama, who made this observation on Wednesday:
“I’d just point out that the Buffett Rule is something that will get us moving in the right direction towards fairness, towards economic growth. It will help us close our deficit and it’s a lot more specific than anything that the other side has proposed so far.” [emphasis added]
In other words, where Paul Ryan is vague and evasive, Obama is being direct and specific. The president is identifying actual loopholes he wants to see closed (Buffett Rule, corporate-jet loophole, tax subsidies for oil companies), which would total tens of billions of dollars in the coming decade. Meanwhile Republican leaders talk about loopholes, but choose not to back this talk up with anything substantive.
One approach represents an honest budget policy. The other, relying on magic asterisks, is a fraud.
By: Steve Benen, The Maddow Blog, April 13, 2012
“Swiss Coffers”: What Does Mitt Romney Have To Hide?
The Democrats are putting all their emphasis on touting the Buffett Rule ahead of a Senate vote for next week to coincide with Tax Day. The push is ostensibly an effort to twist the arm of a few of the more moderate Republicans—say the two Maine Senators or running for reelection in Democratic territory Scott Brown—under the hope that they’ll fear public backlash if they vote down the measure, a policy favored by over half of the country. However even if they peel off a few Republicans there is little hope that the bill would make any progress in the GOP-controlled House. Instead, as a conference call hosted by the Obama campaign Monday afternoon made clear, the push is an effort to focus attention on Mitt Romney’s wealth as a viability as the Republican nomination contest begins to come to a conclusion.
Senate Majority Whip Dick Durbin and Wisconsin Representative Tammy Baldwin joined Obama campaign manager Jim Messina on the call. Messina used most of his time talking with the reporters to attack Romney’s refusal to release his tax returns beyond the past two years. “Why is it ok to give John McCain 23 years and the American public only two? It doesn’t make sense, he can’t justify it, and he should release it,” Messina said, referring to the records Romney provided to McCain in 2008 while he was being vetted as a possible VP candidate.
“Romney is the beneficiary of a broken tax system and he wants to keep it that way,” Messina said, hinting at Romney’s 13.9 percent rate for his 2010 taxes. “He wants a system in which firefighters, cops, teachers and middle class Americans all pay a higher tax rate than he does. We think that’s wrong.”
Durbin went a step further, questioning why Romney keeps some of his money in a Swiss bank account. “It is impossible for him to explain or defend owning a Swiss bank account,” Durbin said. “I asked Warren Buffett at a meeting we had recently, ‘have you ever had a Swiss bank account?’ He said, ‘No, there are plenty of good banks in the United States.’ I started asking people ‘why do you have a Swiss bank account?’ There are two reasonable explanations. Number one: you believe the Swiss Frank is a stronger currency than the United States dollar, and that apparently is the decision the Romney family made during the Bush presidency. And secondly, you want to conceal it, you want to hide something.” Durbin didn’t quite accuse Romney of impropriety, but the implication was clear that the Senate Majority Whip believes the Republican presidential candidate is hiding information that could damage his political campaigns.
By: Patrick Caldwell, The American Prospect, April 9, 2012
Buffett Rule Will Raise $50 Billion Per Year, Affect Just 0.08 Percent Of Taxpayers
When President Obama announced his latest vision for the so called “Buffett rule” — a 30 percent minimum tax on millionaires — during his State of the Union address this week, Republicans were quick to criticize it. For instance, Speaker of the House John Boehner (R-OH) derided the proposal as a “political gimmick.” “It’s a smokescreen,” added Rep. Steve Scalise (R-LA).
However, as a new analysis from Citizens for Tax Justice pointed out, the Buffett rule as laid out in the speech could raise up to $50 billion per year to pay down the deficit, while affecting just 0.08 percent of taxpayers:
Citizens for Tax Justice has calculated that President Obama’s “Buffett Rule” would, if in effect this year, raise $50 billion in a single year and affect only the richest 0.08 percent of taxpayers— that’s just eight percent of the richest one percent of taxpayers. […]
To calculate the $50 billion figure, we assumed that there would be a minimum tax that applies to adjusted gross income (AGI) minus charitable deductions. (We’ll call this modified AGI.)
We assumed that a taxpayer with modified AGI greater than $1 million would face a minimum tax of 30 percent of modified AGI. The taxpayer would pay whichever is greater, their personal income tax under the existing rules or this minimum tax.
Obviously, $50 billion by itself won’t balance the budget, but it certainly doesn’t hurt. At the same time, the Buffett rule will aid in correcting some of the problems in the tax code — like one quarter of millionaires paying lower rates than millions of middle class families and some millionaires paying no income tax at all — that have helped drive income inequality up to a level not seen in the U.S. since the 1920s.
By: Pat Garofalo, Think Progress, January 27, 2012
“Greed Is Good?”: The GOP Seems To Be Okay With That
If you heard a loud “gulp” Tuesday night after President Obama’s State of the Union address, it probably came from Republican political strategists as they realized their party’s odds of capturing the White House this fall are getting longer. Obama may be no Ronald Reagan, but he’s no Jimmy Carter, either.
The obligatory list of accomplishments and initiatives was embellished with bits and pieces of what will likely be Obama’s standard campaign speech. At the heart of his argument for a second term is his assertion that the American dream of upward mobility has been hijacked — that the rich and the powerful have rigged our economic and political systems to favor their interests over those of the average citizen.
Obama sounded this theme several times, perhaps most effectively when he decried policies that allow billionaire Warren Buffett to pay a lower income-tax rate than does his longtime secretary, Debbie Bosanek, who sat with first lady Michelle Obama in her box Tuesday night:
“We don’t begrudge financial success in this country. We admire it. When Americans talk about folks like me paying my fair share of taxes, it’s not because they envy the rich. It’s because they understand that when I get a tax break I don’t need and the country can’t afford, it either adds to the deficit or somebody else has to make up the difference — like a senior on a fixed income, or a student trying to get through school, or a family trying to make ends meet.
“That’s not right. Americans know that’s not right. They know that this generation’s success is only possible because past generations felt a responsibility to each other, and to the future of their country, and they know our way of life will only endure if we feel that same sense of shared responsibility.”
There are some Republicans who can’t wait to take the issue of Buffett’s tax rate vs. Bosanek’s head-on. They are eager to argue that one of the world’s richest men deserves to pay a lower rate because his income derives from job-creating investments. These Republicans presumably consider his secretary a mere salaried employee who spends her money on such fripperies as, you know, food, shelter, clothing and transportation.
“The issue I think that’s going to play out this election is that question of Warren Buffett’s secretary,” House Majority Leader Eric Cantor, R-Va., said Wednesday on CNN. “We want her to make more money, we want her to have more hope for the future. . . . [But] this notion that somehow the income that Warren Buffett makes is the same as a wage income for his secretary, we know that’s not the same.”
In other words, it’s not just that the rich are better than the rest of us but also that their money is better than our money.
Is this really an argument the Republican presidential nominee is going to make? Not in so many words, surely. Newt Gingrich and Rick Santorum seem to understand that taking Cantor’s line would constitute political malpractice.
Mitt Romney may get it, too, but he has little room to maneuver. Romney’s wealth must be very special, indeed, to deserve vacations in Switzerland and the Cayman Islands, where he likes to park his money. But I digress.
Perhaps more of a political problem, from the GOP’s point of view, is Obama’s riff on shared responsibility. Republicans seem eager to double down on a “greed is good” ethos that has more resonance when the economy is booming, real estate values are soaring and everybody feels rich. Obama, by contrast, envisions a return to an America where the successful and fortunate lend a helping hand to those down on their luck, rather than coldly leave them behind. This seems much more in tune with the times.
Indiana Gov. Mitch Daniels, delivering the Republican response, offered an alternative that many voters might find cogent and unthreatening. He didn’t provide a lot of new ideas — basically, Daniels supports the same laissez-faire policies that got us into this crisis — but at least he didn’t sound like some kind of Ayn Rand acolyte who believes that economic Darwinism must always be allowed to run its course.
Daniels isn’t running for president, though, and the pragmatic conservatism he described — one that imagines a role for government — is out of touch with the radicalism that dominates his party. The Republicans who are running the party laugh at the concepts of fairness and collective responsibility. Soon they may find the joke’s on them.
“A Club Of Coddled Millionaires”: Newt Gingrich Is Obama’s Best Surrogate
The most important figure in Tuesday night’s State of the Union address wasn’t on the House floor. In fact, he hasn’t taken a seat in front of the chamber in 13 years.
But as he campaigned for the Republican presidential nomination in Florida, former House speaker Newt Gingrich was doing more to boost President Obama’s reelection prospects than anything Obama himself could do.
Obama’s address, which marked the unofficial start of his campaign, aimed to take the economic misery that threatens to doom his reelection and turn it into class resentment: the privileged wealthy against ordinary Americans. “We can either settle for a country where a shrinking number of people do really well, while a growing number of Americans barely get by,” he said, in remarks prepared for delivery. “Or we can restore an economy where everyone gets a fair shot, everyone does their fair share, and everyone plays by the same set of rules.”
Gingrich assisted in making this case by helpfully arranging for Republicans to serve as fat-cat foils. The former speaker, whose allies had already branded Mitt Romney a job-destroying “predatory capitalist,” successfully goaded the former Massachusetts governor into releasing tax returns that reveal him to be making millions of dollars per year from investments and paying paltry tax rates — while tucking money in the Cayman Islands, Fannie Mae and Freddie Mac stock and a Swiss bank account. Gingrich exulted Tuesday that the already rich Romney is “getting richer off Fannie Mae and Freddie Mac.”
Romney, suddenly faltering in his bid for the nomination, found himself declaring in Florida on Tuesday that “banks aren’t bad people” — a version of his earlier claim that “corporations are people.” He continued to characterize Gingrich as an “influence peddler,” a tool of K Street and an exorbitantly compensated Freddie Mac lobbyist. Gingrich’s campaign, in turn, answered with the implausible claim that it “can’t find” all of the lucrative contracts the candidate had with Freddie. (Did they look under the sofa cushions?)
Obama strategist David Axelrod couldn’t have arranged it better: On the very day the president tried to turn the campaign into a contest between the 1 percent and the 99 percent, the Republicans launched an all-out war between the Gingrich haves and the Romney have-mores.
A new Washington Post/ABC News poll shows the damage done. Two weeks ago, Romney was viewed favorably by 39 percent of Americans and unfavorably by 34 percent. Incredibly, he is now viewed favorably by only 31 percent and unfavorably by 49 percent. Among independents, who will decide the outcome in November, Romney is viewed unfavorably by a margin of 2-to-1.
By no coincidence Obama has grown in public esteem over that time. His favorable rating is up to 53 percent from 48 percent in December, and his unfavorable rating has dropped to 43 percent from 49 percent.
Gingrich himself remains so unpopular that his own chances of beating Obama seem dim: His 29 percent favorability rating is about where it was before he was dumped as speaker by his House colleagues in 1998. But by making Romney as unpopular as he is, he has made Obama look good by comparison.
Gingrich has long regarded himself as a “transformational figure” in world history, and now he’s about to prove it: For the second time in his career, he is about to reelect a Democratic president.
After he led Republicans to victory in 1994 and became House speaker, his ill-advised standoff with President Bill Clinton led to a government shutdown and allowed Clinton to rebound to an easy reelection in 1996. Now, just two years after Republicans swept to power in the House, Gingrich is again providing a Democratic president with an unexpected path to victory.
To press his Gingrich-given advantage Obama made plans to highlight the “Buffett Rule” and invited to the speech Warren Buffett’s secretary, who supposedly pays a higher tax rate than Buffett does. “Let’s never forget,” Obama said in his prepared text, “millions of Americans who work hard and play by the rules every day deserve a government and a financial system that do the same. It’s time to apply the same rules from top to bottom: No bailouts, no handouts, and no cop-outs.”
But it was hardly necessary for Obama to make the case. Gingrich had already turned the Republican candidates into a club of coddled millionaires.
By: Dana Milbank, Opinion Writer, The Washington Post, January 24, 2012
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