Six Myths Explained About Taxing The Wealthy

Six Myths Explained About Taxing The Wealthy

On Saturday, the Obama administration unveiled the "Buffett Rule [1]," a proposed tax on millionaires and billionaires named after celebrity investor Warren Buffett, who has long argued that the federal government should demand more of the wealthy. The millionaires tax is certain to become a major point of contention in the 2012 presidential campaign, and Republicans have wasted no time in heaping it with calumnies. Here are the six most popular conservative arguments against a progressive tax code, and why they're wrong:

It's class warfare! [2]
Yeah right. Three decades of laissez-faire economic polices have allowed the rich to double their share of the national income while paying tax rates a fifth lower than before. The result, notes Kevin Drum [3], was "wage stagnation for everyone else, a massive financial collapse that ravaged the middle class, an enormous deficits that they'll be asked to pay off eventually." If the millionaires tax is the only blowback, the wealthy should count their blessings.

It's a tax on small business [4]
"Don't forget that most small businesses file taxes as individuals," House Budget Committee Chairman Paul Ryan (R-Wis.) said on Fox News Sunday. "So when you are raising top tax rates, you are raising taxes on these job creators." Except when you aren't. ThinkProgress's Pat Garofalo points out [5] that fewer than 2 percent of the nation's small businesses fall into either of the top two tax brackets. Plus, many of the small business filers in the upper brackets are merely investors who have nothing to do with running the business. And if small businesses don't want to pay taxes as individuals, they can file as corporations.

It reduces incentives to work and invest [6]
Experience shows otherwise. As Nancy Folbre points out [7] over at Economix, "average annual rates of growth in gross domestic product in the high tax era between 1950 and 1980 exceeded those of the last 30 years. Increases in the top tax rate under President Bill Clinton were followed by robust economic expansion."

It's an unstable source of revenue [8]
A recent essay [8] in the Wall Street Journal argued that the high volatility of upper-level income makes it impractical to rely on taxing it. But this concern is vastly overblown [9] and can be easily dealt with by establishing rainy day funds.

It's unfair [10]
In the libertarian view, the rich are entitled to their gains because they worked for them. But this ignores how structural changes in the economy such as globalization, financial deregulation, and the rise of the knowledge-based economy have disproportionately rewarded the wealthy [11]. At the same time, we've failed to reinvest in government programs that once leveled the playing field, such as financing for community colleges and public universities [12].

The rich will leave the country [13]
Good riddance, writes [14] Don Peck in a recent Atlantic essay on how to save the middle class: "America remains a magnet for talent, for reasons that go beyond the tax code; and by international standards, none of the tax changes recommended here would create an excessive tax burden on high earners. If a few financiers choose to decamp for some small island-state in search of the smallest possible tax bill, we should wish them good luck."
Source URL: http://motherjones.com/mojo/2011/09/6-dumb-arguments-against-taxing-rich-explained

Links:
[1] http://www.nytimes.com/2011/09/18/us/politics/obama-tax-plan-would-ask-more-of-millionaires.html?pagewanted=2
[2] http://www.outsidethebeltway.com/obamas-millionaires-tax/
[3] http://motherjones.com/kevin-drum/2011/09/paul-ryan-insults-our-intelligence-yet-again
[4] http://www.foxnews.com/on-air/fox-news-sunday/2011/09/18/rep-paul-ryan-rips-obamas-jobs-plan-herman-cain-defends-his-999-tax-proposal
[5] http://thinkprogress.org/economy/2011/09/19/322193/small-business-taxes-lies/
[6] http://spectator.org/blog/2011/09/18/thoughts-on-obamas-buffett-rul
[7] http://economix.blogs.nytimes.com/2011/04/11/taxing-the-rich/
[8] http://online.wsj.com/article/SB10001424052748704604704576220491592684626.html
[9] http://www.remappingdebate.org/article/wsj-story-exaggerates-price-taxing-rich-cherry-picks-data
[10] http://reason.com/archives/2010/09/30/taxing-the-rich
[11] http://motherjones.com/politics/2011/02/income-inequality-labor-union-decline
[12] http://motherjones.com/mojo/2011/09/why-expanding-colleges-wont-fix-income-inequality
[13] http://www.ronpaulforums.com/showthread.php?193824-Maryland-Tax-Raise-Backfires-When-Millionaires-Flee
[14] http://www.theatlantic.com/magazine/archive/2011/09/can-the-middle-class-be-saved/8600/?single_page=true

Perhaps the biggest myth surrounding the wealthiest 10% of U.S. citizens is that they are the "producers". Most of us have little problem with a business owner taking large compensation if earnings are high. Yet those owners and everyone else needs to keep one fundamental fact in mind - all capital starts with and is perpetrated by some doing some labor - in modern times that means making a product or providing a service. Take away labor and those so-called producers are just people with day dreams. The wealthy and conservatives especially have gotten very arrogant about how valuable they are. They'll be shocked to find that if they packed and moved to some no tax island tomorrow not only will America survive, we'll be better off without them.

Freedom is Only For the Elite - Welcome to Republican America Which is Willing To Raise Payroll Taxes On 113 Million Households To Spare 345,000 Millionaires From Tiny Surtax

Freedom is Only For the Elite - Welcome to Republican America Which is Willing To Raise Payroll Taxes On 113 Million Households To Spare 345,000 Millionaires From Tiny Surtax

Senate Democrats yesterday introduced legislation — as they’ve been promising to — that would extend a soon-to-expire payroll tax cut, and pay for it by implementing a surtax on income above $1 million. Republicans, of course, are opposing the plan, reviving their false claims that taxing the very wealthiest Americans will hit small businesses and job creators.

In essence, the GOP is saying that it’s willing to allow higher taxes on middle- and lower-income Americans in order to prevent tax increases on the very wealthy. According to an analysis by Citizens for Tax Justice, provided to the Washington Post’s Greg Sargent, the surtax would affect exceedingly few taxpayers, while a payroll tax cut expiration would wallop more than 100 million households:

    The surtax would impact around 345,000 taxpayers, roughly 0.2 percent of taxpayers, or one in 500 of them. Those people would pay on average an additional 2.1 percent of their overall income, or just over 1/50th of that overall income, in taxes.

    In a majority of states, only one-tenth of one percent, or one in 1,000 taxpayers, would pay this surtax.

    And how many people would benefit from the payroll tax cut? According to the group, around 113 million tax filing units — either single workers or families that include more than one worker — would see their payroll tax cut extended. That’s a lot of people — well over 113 million workers, in fact.

Allowing the payroll tax cut to expire at the end of the year would hit middle-class families with a $1,000 tax increase, providing a substantial drag on the economy. In fact, according to Macroeconomic Advisers, allowing the payroll tax cut to lapse “would reduce GDP growth by 0.5 percent and cost the economy 400,000 jobs.” Other estimates are even worse, with Barclays’s estimating that a payroll tax increase could say 1.5 percent off of GDP growth.

The GOP has, time and again, blocked any legislation that would increase taxes by the slightest amount on the ultra-wealthy, even with tax revenue at a 60 year low, taxes on the rich the lowest they’ve been in a generation, and income inequality out of control. Instead, Republicans would prefer to raise taxes on the middle-class, knocking the economy where it can least afford it.

Be sure and vote conservative Republican in 2012 so the United States of America can look and operate more like 16th century France. When will conservatives start wearing flowing velvet robes and silk brocaded vests so we can all better distinguish the elite from the common folk.

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Newest Hacked Climate E-Mails Still Fail to Disprove Global Warming

Newest Hacked Climate E-Mails Still Fail to Disprove Global Warming

The UK Guardian reports today that the deniers are serving 2-year-old leftovers for Thanksgiving:

    Fresh round of hacked climate science emails leaked online

    A file containing 5,000 emails has been made available in an apparent attempt to repeat the impact of 2009's similar release….

    The initial email dump was apparently timed to disrupt the Copenhagen climate talks. It prompted three official inquiries in the UK and two in the US into the working practices of climate scientists. Although these were critical of the scientists’ handling of Freedom of Information Act requests and lack of openness they did not find fault with the climate change science they had produced.

    Norfolk police have said the new set of emails is “of interest” to their investigation to find the perpetrator of the initial email release who has not yet been identified.

Actually nine independent investigations have vindicated climate science and climate scientists on the hacked University of East Anglia emails (as Skeptical Science explains, for those who want the full history).

As one scientist put it to me today:

    “Two years ago, emails were released and the American people were lied to about their content.  Now, we are expected to be gullible enough to believe the original liars a second time.”

Media Matters also has a good post, “Memo To Media: Research First, Then Report On Climate Emails.”

The bad news is that, as Media Matters explains in its latest post, “Media Already Botching Reports On Hacked Climate Emails,” with some awful “reporting” by the Washington Post already (see below).

The good news is that the perpetrators and their fellow deniers apparently think the international climate talks in Durban are actually important enough to try to trick the media once again into prematurely running stories on out-of-context excerpts from private emails from scientists, most of which were written years ago, discussing science that has long since been resolved.

Leftovers, again? One climate scientist calls the email dump, “Two-year-old turkey from Thanksgiving 2009.”

These are the “second string” emails.  The Varsity team couldn’t derail the science so it’s  really hard to see how the Junior Varsity team could. In other words, if multiple independent investigations showed that climate science was unscathed by the original batch of emails — which must have been the ones the deniers thought were the best they had — then what precisely are the chances these even weaker second-stringers are going to beat the climate science team?  After all, the climate science team has gotten considerably stronger in recent years.

The U.S. National Academy of Sciences concluded its 2010 review of climate science, saying it is a “settled fact” that “the Earth system is warming.”  As for the cause, last year, Time reported on a comprehensive new review paper of “100 peer-reviewed post-IPCC studies” in an article titled, “Report: The Case for Global Warming Stronger Than Ever”:

    By looking at a wide range of observations from all over the world,  the Met Office study concludes that the fingerprint of human influence on climate is stronger than ever. “We can say with a very high significance level that the effects we see in the climate cannot be attributed to any other forcings [factors that push the climate in one direction or another],” says study co-author Gabriele Hegerl of the University of Edinburgh.

ironically or maybe just a joke on everyone gullible enough to stumble across their crazy rants a site called Junk Science is using the newest old e-mails as proof there ain't no such thing as global warming. They have no science to back them up. Perhaps they're called Junk Science because that is what they believe in, junk.

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