[R-G] Tax The Rich, Then Eat Them

[Gary Crethers]

Tax The Rich, Then Eat ThemSeptember 18th, 2010  
Modest proposals to raise taxes on the rich are getting flack  from the right. 
Deficit Hawks are now squawking about how the small  businesses will be hurt 
that generate jobs, but apparently most of these  businesses the Republicans are 
worried about, are not exactly small.  Most of them are very big, they are the 
ones with the lobbyists who can  make the most noise.
The Tea Parties seem to be falling right in line with the Republicans.  Are they 
as independent and insurgent as they are made out to be? I  think not. Perhaps 
the foot soldiers are, but when politicians gets to  Washington, they fall in 
line or find themselves left out of the game.  Look at Bernie Sanders our lone 
socialist. He has to play footsie with  the Democrats or play by himself. We 
need real change, not window  dressing. I say get it over with and eat the rich, 
then we redistribute  the wealth and set up workers control of the economy, but 
I dream. Here  is the news. 

From Alternet
“Posted by Chuck Collins at 5:02 am
September 16, 2010
Five Reasons to Let the Bush Tax Cuts for the Rich Expire
Article printed from speakeasy: http://blogs.alternet.org/speakeasy
URL to article: 
http://blogs.alternet.org/speakeasy/2010/09/16/five-reasons-to-let-the-bush-tax-cuts-for-the-rich-expire/

Congress is actively debating whether to retain President Bush’s 2001  and 2003 
tax cuts for the wealthy that are due to expire at the end of  this year.   
President Obama supports extending tax cuts for households  with incomes under 
$250,000, but ending the tax breaks for higher income  households.
Here are five good reasons for Congress to let them go.
1. Borrowing to Give the Rich Tax Breaks is a Really Bad Idea. We’ve  already 
borrowed $700 billion since 2001 to pay for these tax cuts.    Maintaining them 
for another decade would cost an estimated $700  billion, plus interest on the 
national debt estimated at $126 billion.    Does it really make sense to send 
interest payments to China and  millionaire bond-holders in the U.S. –so that we 
can cut taxes for U.S.  millionaires and billionaires?
2.  There are 700 Billion Better Ways to Use the Money.   Consider  the superior 
ways to spend $700 billion. We could use a portion to  reduce budget deficits.  
We could make long overdue investments in  infrastructure such as bridges, 
roadways, railroads, water treatment  facilities, retrofitting buildings –things 
that make our economy strong  and competitive. We could direct funds to make the 
transition to the new  economy that is less dependent on foreign oil.  In the 
short-term, all  these investments would create millions of jobs.  In the long 
term, it  would put the economy on better footing for the future. There are a  
billion better ways to use the money.
3. Restores Balance to Tax Code. Over the last half century, Congress  has 
steadily reduced tax obligations for the very rich and global  corporations. 
Between 1960 and 2004, the top 0.1 percent of U.S.  taxpayers –the wealthiest 
one in one thousand –have seen the share of  their income paid in total federal 
taxes drop from 60 to 33.6 percent.   Restoring the tax rates to pre-2001 levels 
would be a very slight  increase, yet begin the process of rebalancing the tax 
code.
4. It Won’t Hurt the Economy. You’ve heard the blather about how  taxing the 
rich is going to hurt the economy.  But cutting the taxes for  the wealthy are 
an ineffective way to help the economy.  A recent  analysis by the Congressional 
Budget Service ranked 11 strategies to  spur the economy and create jobs.  
Cutting taxes for the rich was the  worst ranked strategy.  Here’ the reality: 
Taxing the rich is different  than taxing the middle class.  The rich save more 
of their tax cuts  while working people and middle class spend it in the 
economy. Over the  last decade, the top wealth holders have shifted trillions of 
dollars  into speculative investments that have hurt the economy.
5. Reduces the Dangerous Concentration of Wealth and Power. We’re  living in a 
period of unprecedented economic inequality.  A recent  series in the online 
journal Slate examined the “Growing Divergence” of  wealth and income.  Taxes is 
one of the ways we reduce these  inequalities.
A final reason is that the U.S. public supports letting these tax  cuts for the 
rich expire.  A recent Gallup Poll reveals that 59 percent  of the population 
support letting the tax cuts for the rich expire  –while 37 percent support 
extending them.  Polls rarely reveal support  for any form of taxation –which 
indicates that a majority of Americans  –including those who will pay the hire 
taxes – recognize the imprudence  of extending them.  Alan Greenspan, who 
supported the tax cuts in 2001,  has now reversed his position and believes the 
time has come to raise  taxes.
Take action:  Organizations such as Wealth for the Common Good and  Americans 
for Responsible Taxes are working to build public support for  letting the tax 
cuts expire.”
From the NY Times
“Tax Increase Would Hit Few Small Businesses
By DAVID KOCIENIEWSKI
Published: September 17, 2010
http://www.nytimes.com/2010/09/18/business/smallbusiness/18smallbiz.html?src=busln

Mr. Obama wants to extend the cuts for most taxpayers. But he proposes  
eliminating them for the top 2 percent of wage earners, whose taxes  would rise. 
Opponents of the plan warn that a tax increase would batter  hundreds of 
thousands of small businesses — from Silicon Valley  start-ups to mom-and-pop 
convenience stores — and prevent them from  creating the jobs that might lift 
the sagging economy.
“It’s a body blow to the small-business community,” said Grover  Norquist, 
president of the conservative advocacy group Americans for Tax  Reform.
Despite that emotional appeal, Internal Revenue Service statistics  indicate 
that only 3 percent of small businesses would be subject to the  higher tax, and 
many studies of previous tax increases suggest that it  would have minimal 
impact on hiring.
According to the Joint Committee on Taxation, 97 percent of all  businesses 
owners do not earn enough to be subject to the higher rates,  which would be 
levied on income of over $200,000 for individuals and  $250,000 for families.
Even among the 750,000 businesses that would be subjected to the  higher rates 
in 2011, many are sole proprietors — a classification so  amorphous it can 
include everyone from corporate executives who earn  income on rental property 
to entertainers, hedge fund managers and  investment bankers. Because 80 percent 
of America’s 32 million  businesses are sole proprietorships, 90 percent of the 
tax cut would be  derived from businesses without employees.
Trade groups lobbying to extend the tax break for wealthy Americans  argue that 
when hobbyists and home-based enterprises are removed from  the equation, the 
total number of businesses affected is closer to 8  percent. Those companies are 
responsible for nearly half of all business  revenue generated in the country, 
and according to the conservative  American Enterprise Institute, would be less 
likely to invest or hire if  subjected to higher rates.
But much of the research over the last two decades has found that  increases in 
top tax rates can lead to an increase in the formation of  small businesses, as 
wealthy individuals apparently begin start-ups to  avail themselves of the more 
generous tax breaks offered to businesses.” 

This is from the Washington Post
“House Dems: Many businesses that face Obama tax hike are too big to be labeled 
’small’
By Lori Montgomery
Washington Post Staff Writer
Friday, September 17, 2010; 6:10 PM
http://www.washingtonpost.com/wp-dyn/content/article/2010/09/17/AR2010091702116.html

Republicans oppose President Obama’s plan to raise taxes on the nation’s  
wealthiest households because, they say, many small businesses - a  major engine 
of job growth - would be slapped with a tax hike.
“The top 2 or 3 percent” of all small businesses would see their  taxes go up 
under the Obama plan, Sen. Orrin Hatch (R-Utah) fumed this  week. “That’s 
750,000 to 800,000 small businesses! That create most of  the jobs in our 
society!”
The thing is, some of those businesses are not particularly small. In fact, 
they’re quite large.
Alan Viard, an economist in the Bush White House who is now at the  American 
Enterprise Institute, agreed that many firms represented in the  top tax 
brackets are hardly small. Economically, that doesn’t matter,  he said: Obama 
would still be raising taxes on a significant source of  jobs and economic 
activity.
Politically, however, it’s a very different matter to raise taxes on a  Wall 
Street hedge fund than it is to tax your neighborhood dry cleaner.  Which is why 
Republicans continually define pass-through entities of  all sizes as small 
businesses, a position Viard called a “fallacy.”
“How can it be that 3 percent of owners are accounting for 50 percent  of small 
business income? Those firms they’re owning can’t be all that  small,” Viard 
said. “And that’s true. They’re very large.”
Added Rep. Chris Van Hollen (D-Md.), a member of House leadership who  heads the 
committee charged with electing House Democrats: “Republicans  are trying to 
disguise this issue as a small business issue when the  facts tell a different 
story. Among the major beneficiaries are hedge  funds, billion-dollar private 
equity funds, major Washington lobbying  firms and other million-dollar special 
interests.” 

And this From Washington Post
The true test of tea parties’ mettle
By Ezra Klein
Washington Post Staff Writer
Saturday, September 18, 2010; 6:20 PM
http://www.washingtonpost.com/wp-dyn/content/article/2010/09/18/AR2010091802861.html

“The Republicans are proposing to increase the deficit by about $4  trillion by 
extending all of the Bush tax cuts and the Democrats are  countering with an 
offer to increase the deficit by a bit more than $3  trillion by extending only 
the tax cuts for those making less than  $250,000 a year. Look at those numbers 
again: $4 trillion and $3  trillion. That’s vastly more deficit spending than 
the stimulus, bank  bailouts, health-care bill (which actually reduces the 
deficit) and  everything else we’ve done in the past few years combined.
But will the tea party candidates, when it comes down to it, be any  different 
from the Republican Party that serves as their uncomfortable  home? As of yet, 
there’s little sign of it. The tea parties may be  something new in American 
politics, or at least something rare. They’re  grass-roots, decentralized and 
deeply authentic. But their candidates  sound, well, like any other politicians.
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Take Paul. The Lexington-Herald Leader asked him whether the Bush tax  cuts 
should be fully extended. “Absolutely,” he replied. “The money is  not the 
government’s. It is ours.” The problem, of course, is that we,  as a democratic 
society, granted the government the power to tax that  money in order to spend 
it on things we thought important, such as  national defense and Social 
Security. If you take away the revenue but  don’t cut the spending, you get 
deficits. And the tea party hates  deficits.
So how would Paul pay for the tax cuts? Paul said he “couldn’t spell  out a 
proposal to do that before the November 2 election.” And even if  he does spell 
out a proposal after the election, the one put forward by  the GOP’s leadership 
doesn’t pay for itself. Will Paul vote against it -  will he in fact filibuster 
his own party - unless it adds $4 trillion  in spending cuts over the next 
decade?
Paul isn’t alone. Christine O’Donnell, who scored the upset in  Delaware, rails 
against the deficit but says we “absolutely” have to  extend the Bush tax cuts. 
That’s $4 trillion straight to the deficit’s  hips. How will she pay for it? 
“Waste,” of course. Anyone who’s been  around Washington for even a day or two 
is familiar with that dodge.
Then there’s the Mama Grizzly herself. Sarah Palin may be the patron  saint of 
the tea parties, but when she gets on Fox News, she’s just  another politician. 
Last month, Fox News Sunday anchor Chris Wallace  asked about the tension 
between extending the tax cuts for the rich and  balancing the budget. 
“Republicans keep talking about being deficit  hawks,” he said. “This is $678 
billion you are not going to pay for.”  Palin refused to even grant the premise. 
“No, this is going to result in  the largest tax increase in U.S. history. 
Again, it’s idiotic. My palm  isn’t large enough to have written all my notes 
down on what this tax  increase, what it will result in.”