Bravo to President Obama for remembering his progressive roots and the location of his spine and proposing the Buffett tax, named after billionaire financier Warren Buffett who says he and his fellow ultra-wealthy should be paying more in taxes.
The Buffett tax would raise the minimum federal income tax that people with more than $1 million in annual income have to pay. Right now, those in the million-per-annum club pay the lowest rates in the history of the income tax. Most economists (not in the pay of right-wing institutions like the Heritage Foundation, the Hoover Institute and the Cato Foundation) now agree that the Bush tax cuts to the wealthy in 2001 and 2003 are what caused our federal budget surplus from the Clinton years to turn to the greatest deficit in our history.
The Republicans were not wasting away in Margaritaville with the lesser Buffett when the President dropped the news. Such right-wing luminaries as Representative Paul Ryan and Senators Lindsay Graham and Mitch McConnell immediately opposed the proposed tax.
Collectively, the Republicans gave four completely bogus arguments, the same ones they always give when someone proposes to raise taxes on the wealthy or opposes one of their frequent schemes to lower taxes on the same. Here are the reasons, with an explanation of their “bogusness” (bogusity?) in bold:
- The tax on millionaires is a form of class warfare: They have a lot of nerve talking about class warfare after trying to bust up public unions, end unemployment benefits and destroy Social Security and Medicare.
- It hurts corporate investment and job creation: But corporations are not creating new jobs now, but instead building up profit and paying their executives (the millionaires) hefty sums. With the additional money collected from the millionaire tax, the federal government could do more job creation of its own, something that it happens to do well.
- It adds to uncertainty in the economy: Huh? There is no greater uncertainty, just a new set of certainties. The uncertainty argument when applied to taxes or regulation is always bogus.
- It punishes the people who create jobs: These people have gotten off pretty well these past few decades. They control more of our wealth and make a larger share of total income than they did 30 years ago. They also pay far less in taxes than they did 30 years ago. President Obama doesn’t want to strip them of their wealth and the many privileges that come with it, he just wants them to pay a little bit more.
I have a feeling that even before this entry appears that others will have thoroughly analyzed the political angle. With one bold action, Obama hopes to get the attention of his core progressive constituency, whom he has abandoned as he tacks further and further to the right on economic, environmental and military issues. As long as the Republicans vociferously oppose the millionaire tax, the contrast between Obama and his rightwing opponents will be very clearly drawn, much more clearly than, let’s say, after the President deep-sixed needed environmental regulations a few weeks back.
I don’t believe that President Obama is going to make a case for reelection based on this one proposal. He will need a number of proposals that put him on the progressive side of the issue and his Republican opponents, and then opponent, clearly on the other side.