So, NPR requested to speak to some of the potential “victims” of the surtax:
We wanted to talk to business owners who would be affected. So, NPR requested help from numerous Republican congressional offices, including House and Senate leadership. They were unable to produce a single millionaire job creator for us to interview.
Undefeated, NPR next requested the same thing from business groups that have also fought the proposal. Again, no example could be produced.
Eventually, the reporters placed a request for business owners that would be affected by the tax to respond, and they did — only the answers they got were mostly like Jason Burger, co-owner of a company called CSS International Holdings.
Mr. Burger’s company is an international “infrastructure contractor”:
“If my taxes go up, I have slightly less disposable income, yes…But that has nothing to do with what my business does. What my business does is based on the contracts that it wins and the demand for its services.”
Burger says his Michigan-based company is hiring like crazy, and he’d be perfectly willing to pay the surtax.
“It’s only fair that I put back into the system that is the entire reason for my success,” said Burger.
So again, Republicans are manufacturing disastrous consequences for policy proposals that are quite sound.
Now, it is possible that the businesspeople who responded to NPR on Facebook are prone to be more liberal, but the fact that both the Republican party and business trade groups couldn’t provide a single example of an small entrepreneur who would decide not to hire based on his personal taxes is illustrative of how the conservative mind works.
Thinks are true because I feel they are true. Damn the evidence.
- GOP backs payroll tax extension but rejects surtax on millionaires (politicalticker.blogs.cnn.com)
- Does the GOP Really Love You? (inc.com)
David Sirota, writing at Salon.com examines the results of two new studies on education and found that the principle factor deciding of students perform well is — money.
The first report, from Stanford University, showed that with a rising “income achievement gap,” a family’s economic situation is a bigger determinative force in a child’s academic performance than any other major demographic factor. For poor kids, that means the intensifying hardships of poverty are now creating massive obstacles to academic progress.
Because of this reality, schools in destitute areas naturally require more resources than those in rich ones so as to help impoverished kids overcome comparatively steep odds. Yet, according to the second report from the U.S. Department of Education, “many high-poverty schools receive less than their fair share of state and local funding.” As if purposely embodying the old adage about adding insult to injury, the financing scheme “leav(es) students in high-poverty schools with fewer resources than schools attended by their wealthier peers.” In practice, that equals less funding to recruit teachers, upgrade classrooms, reduce class sizes and sustain all the other basics of a good education.
Put all this together and behold the crux of America’s education problems in bumper-sticker terms: It’s poverty and punitive funding formulas, stupid.
For years, private education corporations have consistently blamed teacher unions for poor results in our nations schools, but the reports shoot down this myth. Sirota:
We’ve also learned that no matter how much self-styled education “reformers” claim otherwise, the always-demonized teachers unions are not holding our education system back. As the New York Times recently noted: “If unions are the primary cause of bad schools, why isn’t labor’s pernicious effect” felt in the very unionized schools that so consistently graduate top students?
The conclusion is that in order to improve education for all students, we must combat poverty and reform the funding system:
Instead, America’s youth need the painfully obvious: a national commitment to combating poverty and more funds spent on schools in the poorest areas than on schools in the richest areas — not the other way around.
Within education, achieving those objectives requires efforts to stop financing schools via property tax systems (i.e., systems that by design direct more resources to wealthy areas). It also requires initiatives that better target public education appropriations at schools in low-income neighborhoods — and changing those existing funding formulas that actively exacerbate inequality.
I have been saying something similar for years.
My two-part proposal has been 1) to create an affordable model school infrastructure and make sure all schools meet the standards (physical plant, class size, resources, and 2) pool all school funds at the state level and distribute them based on a per-student amount to every school.
Schools in poverty-stricken areas would be given additional funds to meet needs (nutrition, etc.) not found in wealthier areas.
As Sirota notes, it’s a tough sell in the current political environment, but it’s one of the most important obstacles to ensuring the prominence of American for generations to come.
“It is mathematically impossible to invest enough in our economy and our country to sustain the middle class (our customers) without taxing the top 1 percent at reasonable levels again” – Venture Capitalist Nick Hanaeur
Hanauer has put his name on a growing list of 1 percenters who are boldly stating what most economists already recognize.
Writing on Bloomberg’s website, Hanauer observed:
We’ve had it backward for the last 30 years. Rich businesspeople like me don’t create jobs. Middle-class consumers do, and when they thrive, U.S. businesses grow and profit. That’s why taxing the rich to pay for investments that benefit all is a great deal for both the middle class and the rich.
“The wealthiest can afford to pay more in taxes. That’s a part of the deal. That makes sense. I don’t know anyone that doesn’t agree with that,” Porat said. “The wealth disparity between the lowest and the highest continues to expand, and that’s inappropriate.” “We cannot cut our way to greatness,” she added.
I hope this is the dawning of a new capitalist idea.
We have lived too long in the shadow of timid CEOs and their sycophants who look no further than the next quarter.
In order for capitalism to be sustainable, a robust middle class must exist.
The article goes on to note that one of the major factors driving income inequality is the outrageous compensation and bonuses given to the top tier of huge corporations.
Instituting practices that reward performance and sustainability would go a long way toward creating a healthy economy.
- Morgan Stanley Executive Calls For Higher Taxes On The Rich: ‘We Cannot Cut Our Way To Greatness’ (thinkprogress.org)
- Silicon Alley Insider: Venture Capitalist Shreds The Idea That Taxing The Rich Is A Job Killer (businessinsider.com)
- Millionaire Nick Hanauer Shoots Down Neil Cavuto’s Straw Men as He Explains Why His Taxes Should be Raised (crooksandliars.com)
- Who creates jobs? The middle class (dailykos.com)
- Study backs up “Buffett Rule” claims (cbsnews.com)
In a November 19 post, Reich gives the following advice to the Deficit Supercommittee (which has since disbanded, after failing to reach an agreement):
1. Make no cuts before unemployment is back under control (down to 5%).
2. Make the boost big enough. We need a huge jobs program with components like the New Deal’s Civilian Conservation Corps and Work Progress Administration to restore our infrastructure.
3. Raise taxes on the super rich and tax all income (capital gains included) at the same rate. Restore the tax structure to pre-1980 levels and put a 2% surcharge on income over $5 million.
4. Cut the real welfare — military spending and corporate subsidies. Savings = $400 billion annually.
Reich’s closing plea, of course, fell on deaf ears:
Do you hear me, Washington? Do these four things and restore jobs and prosperity. Fail to do these, and you’ll make things much, much worse.
Unfortunately, there’s not a chance any of this will get through in this political climate.
It seems like we are constantly in a battle to mitigate damage from bad policy and those actively on a misguided crusade to make things much worse, and not making any headway in actually fixing the problem.
Paul Krugman delivers again.
Commenting on the “new” plan being pushed to have a tax holiday for corporations, Krugman points out that it is again being sold as an answer to our job problems.
Cutting taxes for corporations does not and never has led to more jobs.
The cuts are never really designed for small businesses, and are the worst kind of trickle down wishful thinking.
As opponents of this plan point out, we’ve already seen this movie: A similar tax holiday was offered in 2004, with a similar sales pitch. And it was a total failure. Companies did indeed take advantage of the amnesty to move a lot of money back to the United States. But they used that money to pay dividends, pay down debt, buy up other companies, buy back their own stock — pretty much everything except increasing investment and creating jobs. Indeed, there’s no evidence that the 2004 tax holiday did anything at all to stimulate the economy.
A nice piece on what really happens when we cut taxes on corporations, and the disincentive it is for them to invest in infrastructure and employees.
- Avoiding taxes the way big corporations do it (thehill.com)
Andrew Sullivan posted a good exchange on wealth and taxes on his Daily Dish this Monday (sorry, I’m just getting caught up).
Sullivan makes a common argument against what he sees is excessive, punitive taxation of the rich:
After all, he is the person whose success makes taxation possible at all – or rather far more successful than if there were only Wal-Mart workers. But I am content with inequality as the price of freedom, and do not believe the government should punish people for being successful.
But one of his correspondents quotes conservative Ben Stein, and makes a key point:
But if they are superrich, they derive special benefits from life in the United States that the nonrich don’t. For one thing, they can make the money in a safe environment, which is not true for the rich in many countries. It is just common decency that they should pay much higher income taxes than they do.
Not addressed in the back-and-forth is the important fact that some of the rich have rigged the system to keep most people poor and the rich richer.
Sullivan closes nicely with a graph that I completely agree with:
I favor a return to Clinton era tax rates for the successful because we need to find some money somewhere and the hike is not that bad, given the debt we face. I’d like tax simplification and an end to the myriad loopholes and deductions in the tax code that the rich pay lawyers to exploit. I believe in an estate tax, in order to reward work not nepotism. I’ve made the same point about paying for the wars and supported the health insurance reform. I just think that wealthy seniors should pay more for Medicare and that social security could easily be means-tested and that the retirement age be raised. Not because I hate the old, but because we have to do something, or go into default. The successful already pay the bulk of the taxes. I just don’t see why tax hikes should be framed as some kind of revenge on them, or long-overdue comeuppance. It’s a necessary evil for the common good. And many liberals would fare better if they made their case that way, as, I might add, Obama generally does.
A good post that I encourage you to read.
- Bill Maher: New Rule: Rich People Who Complain About Being Vilified Should Be Vilified (huffingtonpost.com)
- Ben Stein’s fiscal policy (blogs.reuters.com)
- “The Successful” Ctd (andrewsullivan.theatlantic.com)
- Taxing the Successful (outsidethebeltway.com)
There’s a good post by Ned Resnikoff up at Salon.com.
“The non-existent moral case for tax cuts” outlines the Tea Party and elite argument for cuts:
It goes like this: We earned this money. We deserve it. It is therefore immoral to take it from us.
Resnikoff correctly points out that the argument is silly because it is impossible to give an accurate accounting for how much of a role circumstance and environmental factors played in achieving that wealth, and how much of it was sweat equity.
The word “deserve” is extremely loaded, and eminently debatable:
When you control for environmental, genetic, social, historical, and biological factors, what differentiates my own distinguishing features from Charles Manson’s — or, for that matter, Obama’s, Palin’s, Lincoln’s or yours — is either imperceptible or completely nonexistent. And if that’s the case, I don’t see how you can argue that either of us deserve more or less than any of those people.
What this suggests to me is that the only way you can coherently argue that a person inherently deserves a certain level of privilege or material comfort is to also argue that all persons deserve it, by virtue of their personhood. We already have language to describe these things that all persons innately deserve: we call them rights.
If this is so, and I personally agree that it is, then the argument from the right is pure bluster and a manifestation of privilege.
The conclusion is one that I am also convinced of. It is, however, not a subject that you can discuss with extreme partisans:
Mostly it falls back to a question of economics: how to balance the state’s ability to provide needed services for all citizens, including its most needy, while preserving a capitalist system which rewards achievement, and therefore (one would hope) innovation, productivity and excellence.
From yesterday’s Washington Post:
In a vote of 53 to 45, Republicans and Joe Lieberman (and four Democrats) kept the bill, which punished companies that send jobs overseas, from passing.
…Senate Minority Leader Mitch McConnell (R-Ky.) dismissed the bill as “a purely political exercise” that never had a chance of becoming law.
This coming from someone whose party just released the “Pledge To America”.
In reality, this is the Republican game to stop the Democrats from accomplishing ANYTHING.
They don’t care who this hurts, as long as they can leverage it to try to get back into power so they can rack up the reforms and changes they achieved during the Bush years. Wait, what?
For those keeping score:
Democrats voting to block the bill were Ben Nelson (Neb.), Jon Tester (Mont.), Mark Warner (Va.) and Max Baucus (Mont.).
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