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“Jeb Accuses Trump Of Being A New Yorker”: That’s The Home Of Rich, Snotty Liberals, Ergo, Trump Must Be A Liberal

Jeb Bush complains that the political media have not treated Donald Trump as a serious candidate. They have not dissected Trump’s eclectic stances, which, a new Bush ad contends, show the populist as a fake conservative.

OK. Labor Day is over. Let’s get serious.

Start with that new Bush ad, titled “The Real Donald Trump.”

The ad opens with Trump on TV saying: “I lived in New York City, in Manhattan, all my life, OK? So, you know, my views are a little bit different than if I lived in Iowa.”

Trump is from New York. Who knew? That’s the home of rich, snotty liberals. Ergo, Trump must be a liberal, or so the serious Bush implies.

When it comes time to raise substantial piles of campaign cash, Jeb seems to like New Yorkers just fine. Indeed, he is a frequent flier to the Manhattan till. Last winter, private equity magnate Henry Kravis threw a fundraiser for Jeb at his Park Avenue spread. The price of admission — $100,000 a ticket — raised eyebrows even on Wall Street.

Oh, yes, we’re supposed to talk about Trump’s policy positions.

The Bush ad has Trump saying years ago that the 25 percent tax rate for high-income people should be “raised substantially.” Do note that Ronald Reagan’s tax reforms left the top marginal rate at 28 percent — and after closing numerous loopholes. Also, capital gains were then taxed as ordinary income, meaning the rate for the wealthiest taxpayers was 28 percent. (The top rate is now 23.8 percent.)

Speaking of the tax code, Trump vows to close the loophole on carried interest. It lets hedge fund managers pay taxes on obviously earned income at a lower rate than their chauffeurs pay. “They’re paying nothing, and it’s ridiculous,” Trump says.

A writer at the conservative Weekly Standard recently asked Bush whether he’d end the deal on carried interest. “Ask me on Sept. 9″ was Bush’s noncommittal answer. That’s when he plans to unfurl his tax reform plan.

The ad has a younger Trump coming out for single-payer health care. That sounds a lot like Medicare.

Trump is shown saying he’s pro-choice on abortion. A recent CBS poll had 61 percent of Republicans opposing a ban on abortion, although many want stricter limits.

About Trump’s being a lifelong New Yorker, well, that’s not entirely true. He spends a good deal of quality time in Palm Beach, Florida.

“Donald is a perfect fit for Palm Beach,” Shannon Donnelly, the society editor for the Palm Beach Daily News (aka “The Shiny Sheet”), told me. “He has an office in New York but is rarely there.”

“We’re overdue for Winter White House,” Donnelly added. “We haven’t had one since that guy from Massachusetts [John F. Kennedy] moved in with all his rambunctious siblings.”

Your author cannot sign off without opining that Trump’s crude remarks about Mexicans should disqualify him from becoming president. The Trump ad tying Bush’s rather liberal thoughts on immigration to faces of Mexican criminals who murdered people in this country is rather disgraceful.

But it is not unlike the Willie Horton ad that Bush’s father, George H.W., ran in his 1988 campaign. Horton had raped a woman after being released from a Massachusetts prison on a weekend furlough. The Democratic candidate, Michael Dukakis, was Massachusetts’ governor at the time. The elder Bush’s ads continually flashed Horton’s picture in what many considered a stereotype of a scary black man.

“By the time we’re finished,” Bush campaign manager Lee Atwater said, “they’re going to wonder whether Willie Horton is Dukakis’ running mate.”

Let’s get serious about Trump’s record? Yes, and the same goes for everyone else’s.

 

By: Froma Harrop, The National Memo, September 8, 2015

September 9, 2015 Posted by | Donald Trump, Jeb Bush, New York City | , , , , , , , , , | 1 Comment

“Acting As Political Human Shields”: The Upper Middle Class Needs To Stop Coddling The 1 Percent

The most criticism I’ve ever received as a writer came from articles suggesting that we curtail tax expenditures that mainly benefit the rich, like the mortgage interest deduction or 529 college savings accounts. (Okay, second-most — the top hate mail–getter, by a large margin, was a quite different issue.)

Why? As President Obama himself found last week, the last people you want to piss off are members of the upper middle class, who are set to a hair trigger when it comes to their personal government handouts. As Paul Waldman writes, they may be “the single most dangerous constituency to anger,” because a) unlike the 1 percent, they are relatively numerous; and b) like the 1 percent, they have a lot of disposable income, which politicians love.

On one level, this is an understandable reaction to a threat to personal economic interest. But on another, members of the upper middle class are being played for fools. They are acting as political human shields for the top 1 percent, which claims more of these benefits proportionally speaking and has been raking in essentially all the benefits of economic growth. The upper middle class (let’s define this as the top income quintile, minus the top 1 percent) ought to demand a lot more than it is getting.

To start, let’s get one thing straight. Tax expenditures are indeed government benefits, economically identical to direct government spending. Preferential treatment in the tax code is just another way of jiggering the national economic structure to direct benefits to one group or another.

Not all tax expenditures are equally terrible. According to a CBO analysis, exclusions for health care and pensions are spread relatively equitably across the population, while the Earned Income Tax Credit and Child Tax Credit are major bulwarks against poverty.

However, the big deductions are unfairly skewed. Two-thirds of taxpayers can’t even use the mortgage interest deduction, because you have to itemize your deductions to get it; other countries manage high rates of homeownership without the subsidy. Overall, 1 percenters get 15 percent of the mortgage interest deduction, 30 percent of the state tax deduction, and 38 percent of the charitable contribution deduction.

Preferential tax rates for capital gains and dividends, meanwhile, are even worse. Over two-thirds of the benefits go to 1 percenters. The supposed idea is to incentivize investment and thus economic growth, but there is zero evidence this actually happens. Close analysis of the Bush administration’s cut on dividend taxes finds that it did not change anything except payouts to shareholders. Longer-term studies on capital gains tax rates finds no relationship to investment or broader economic growth. The major effect is a booming industry in legal chicanery allowing people to reclassify regular income as capital gains.

Meanwhile, over the last generation, 1 percenters have been capturing the vast bulk of economic growth, a trend that is only getting worse. Indeed, according to a new analysis at the Economic Policy Institute by Mark Price and Estelle Sommeiller, from 2009 to 2012 1 percenters literally received more than all the income growth. Because the incomes of the 99 percent fell on average, 1 percenters got 105.5 percent of real income growth. Policies that benefit the very top over everyone else are clearly to blame.

Clearly, that’s no good for anyone who isn’t in the 1 percent, including the merely affluent. But with the middle class lacking much punching power, and the poor largely ignored by everyone, the upper middle class really ought to be asking for more than the preservation of their existing government benefits. At the very least, the upper middle class could demand a cut of economic growth.

And if the upper middle class were willing to ally with the bottom and the middle, there’s reason to think it would be able to keep the structure of its current benefits (that is to say, access to college instead of merely some money to pay for it) while cutting everyone in on economic growth. Taxes might go up somewhat, but that would likely be compensated by better wages and universal benefits.

On the other hand, if the upper middle class can manage nothing but a hysterical defense of its own welfare handouts, and the American system keeps brutalizing the bottom half of the income ladder, a genuine mass movement could appear, as it has in the past. Such movements are not likely to be especially concerned with the upper middle class.

 

By: Ryan Cooper, The Week, February 2, 2015

February 3, 2015 Posted by | Tax Code, The 1%, Upper Middle Class | , , , , , , | Leave a comment

“An American Hero?”: Right-Wing Lauds Facebook Co-Founder’s Decision To Renounce US Citizenship

Eduardo Saverin, the co-founder of Facebook whose falling out with the company and its CEO Mark Zuckerberg was the subject of the 2010 blockbuster The Social Network, renounced his US citizenship last week, and the right has wasted no time labeling him a hero.

Saverin, who owns a roughly four percent stake of Facebook, announced that he was expatriating last week, just in time to avoid paying a federal capital gains tax on the fortune heading his way when the social site files its IPO.

Forbes Magazine, the conservative-leaning and business friendly magazine, ran an article with the headline “For De-Friending The U.S., Facebook’s Eduardo Saverin Is An American Hero.” John Tamny writes:

Saverin’s departure is also a reminder to politicians that while they can obnoxiously decree what percentage of our income we’ll hand them in taxes, what they vote for won’t necessarily reflect reality. Indeed, as evidenced by Saverin’s renunciation, tax rates and collection of monies on those rates are two different things. Assuming nosebleed rates of taxation were a driver of Saverin’s decision, politicians will hopefully see that if too greedy about collecting the money of others, they’ll eventually collect nothing.

Tamny seems to be convinced that Saverin’s departure will open the floodgates for dozens of US executives, investors and other wealthy businessmen who have made fortunes off of stocks and bonds to dramatically renounce their citizenship, break through the shackles of big government and book a one-way ticket to wherever in an attempt to hold on to every last penny they’ve earned. What Forbes and The Heritage Foundation ignore is that the capital gains tax is at a historically low rate, and even proposals to increase it slightly would still fall well short of approaching the rate during the 1970s.

Saverin’s decision to flee the United States is also remarkably shortsighted. As Farhad Manjoo notes on PandoDaily today, Saverin’s life story in particular is one that is quintessentially American.

 

By: Adam Peck, Think Progress, May 14, 2012

May 15, 2012 Posted by | Taxes | , , , , , , , , | 1 Comment

Why Mitt Romney’s Tax Returns Undermine The GOP’s Investment Tax Argument

According to Republican gospel, taxes on investment must always be low, or else investors will simply sit on their money, refusing to do the very thing that could earn them more money. However, as David Abromowitz laid out in Bloobmerg View today, Mitt Romney’s tax returns undermine this argument.

After all, Romney made his fortune via investments made by Bain Capital, the private equity firm that he ran. And Bain’s investments between 1984 and 1999 “occurred when capital-gains rates were much higher than they are today. Yet Bain consistently attracted massive amounts of private capital, and thrived”:

Bain’s haul is further evidence that fair tax rates don’t hold back profit-seeking capitalists, at least until those rates reach a point that no one is proposing. From 1984 until 1999, the top rates on capital gains — the profit from investments as opposed to compensation for work — were often at 28 percent, and never lower than 20 percent. Indeed, in 1987, under President Ronald Reagan, the 20 percent rate rose to 28 percent — a 40 percent increase in potential taxation of Bain investment profit. (Yes, Reagan did raise taxes, even on capital.)

An analysis by the Wall Street Journal of 77 Bain deals in that time period showed that the firm “produced about $2.5 billion in gains for its investors,” on about $1.1 billion invested. Clearly, even with capital-gains rates almost double those today, fund managers such as Romney didn’t lack investors.

As billionaire investor Warren Buffett put it, “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.” It’s worth remembering that it was conservative icon Ronald Reagan who completely equalized the tax treatment of investment and wage income, rejecting the argument that a lower capital gains rate was necessary to incentivize investment.

As Nobel Prize winning economist Paul Krugman has noted, the case for a lower capital gains tax is dubious at best. “Nothing in our history or experience says that unearned income has to be taxed this lightly,” he wrote.

 

By: Pat Garofalo, Think Progress, February 9, 2012

February 10, 2012 Posted by | Election 2012, Taxes | , , , , , , , | Leave a comment

“Can’t-Win Cul-de-Sac”: Mitt Romney’s Clumsy Economic Centrism

There are times when I feel a twinge  of sympathy for former Gov. Mitt Romney. Really and truly. The Unbearable  Heaviness of Being Mitt in the current ideological climate—with its  highly-charged suspicions of both “socialism” and conspicuous wealth—forces him  to tack left and right in ways that leave him pitifully exposed.

His calculated moves toward the  right sometime in the mid-2000s, on  key issues like abortion, gay rights, and  immigration, are well-known  and justly scrutinized.

Less noticed—but no less calculated—have  been his efforts to hew to the center.

I’m thinking, first, of Romney’s  proposal to eliminate capital gains  taxes only for married couples making under  $200,000 and singles  making less than $100,000. The cap at those income levels  is  head-scratchingly pointless, as the vast  majority who benefit from low capital gains tax rates make well over $200,000.

Romney’s official rationale for  limited capital gains tax relief is that “We  need to spend our precious tax dollars on the middle class.”

That sounds nice and centrist-y, but  the more likely reason became  clear when Romney finally released his tax returns: If he proposed  eliminating taxes on capital gains altogether—as  former Speaker Newt  Gingrich, Rep. Ron Paul and Gov. Rick Perry have  proposed—then Romney would be forced to defend the prospect of paying even  less than his already low rate of 13.9 percent.

“Under  that plan”—meaning Gingrich’s—”I’d have paid no taxes in the last two years,” Romney said, in one of his sharpest lines in the debate in Tampa last month.

Romney is similarly lukewarm, from  the libertarian economic perspective, on the issue of the minimum wage. As  in 2008, Romney favors automatic increases to  keep pace with inflation. The  right uniformly hates this idea—they  think it will actually eliminate  entry-level jobs and hurt the very  people it’s trying to help.

As with his suspicious-seeming  lurches toward the right to appease  the social conservative base, Romney trims  toward the center on  sensitive economic issues to limit the appearance of rank  plutocracy.

Steve  Forbes tells Yahoo News:  “It goes to show he’s still very defensive  about his own wealth. All  it does is give the base another reason to be  unenthusiastic about  him.”

At National  Review Online, Andrew C. McCarthy likewise asserted that Romney was  “doubling down on stupid to overcompensate for any hint of a compassion  deficit.”

Hence my (momentary) twinge of  sympathy for Romney. His ideological  contortions, whichever direction they take  him, land him in the same  can’t-win cul-de-sac.

 

By: Scott Galupo, U. S. News and World Report, February 7, 2012

February 8, 2012 Posted by | Election 2012 | , , , , , , , | 1 Comment

   

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