Tag: Tax Reform

As anyone watching the news knows by now that the major topic of discussion is the coming expiration of the Bush/Obama Tax cuts and the mythical “fiscal cliff”. President Obama has said that he will not extend them again and that any budget agreement from congress that does not raise taxes on income over $250,000 will be vetoed. So far, he’s sticking with that story. Over the weekend Treasury Secretary Timothy Geithner was dispatched to the Sunday talk show rounds to pitch the budget proposal while the president took to the road and social media to sell it to the public. Needless to say the Republicans roundly rejected the proposal with House Speaker John Boehner calling it a “La-La-Land offer.” That’s a real adult response.

Former policy analyst to Presidents Ronald Reagan and George H. W. Bush, Bruce Bartlett, who lost all his conservative credibility when he made the case that the Bush/Cheney administration agenda didn’t make any sense, joined the discussion of the Grover Norquist‘s tax pledge for Republicans and the pro’s and con’s of increased taxes. Gov. Dannel Malloy, Democrat of Connecticut; Veronique de Rugy, senior research fellow at the Mercatus Center at George Mason University; Elizabeth Pearson, fellow at The Roosevelt Institute; and Dedrick Muhammad, senior economic director at the NAACP join host Chris Hayes and Mr. Bartlet to discuss the “story of the week”: the tax battle

Last week, Bill De Blasio, New York City’s Public Advocate and possible mayoral candidate, proposed raising taxes on NYC residents making over $500,000 to provide funds for “more pre-kindergarten classes and after-school activities for students in grades six through eight”:

Mr. de Blasio argued that improvements in early childhood education were critical to improving the city’s long-term economy and its middle class. He estimated that the new programs would cost about $500 million, which could be generated through a small tax surcharge on New Yorkers who earn $500,000 or more. [..]

A person earning $1 million in annual income would pay an additional $2,120 under Mr. de Blasio’s plan, which was modeled after a similar surcharge used to hire new police officers under a 1990s anticrime initiative of Mayor David N. Dinkins, Mr. de Blasio’s former employer. Any new surcharge would require approval by the State Legislature.

New York’s three term billionaire mayor, Michael Bloomberg was horrified stating that Mr. De Blasio’s proposal was “about as dumb a policy as I can think of.”

Capital New York reports that Bloomberg– whose net worth as the country’s 10th richest person increased from $22 billion to $25 billion over the course of six months this year— responded to a question Monday about de Blasio’s tax, saying, “Well if you want to drive out the 1 percent of the people that pay roughly 50 percent of the taxes, or the 10 percent of the people that pay 70-odd percent of the taxes, that’s as good a strategy as I know. That’s exactly the ways to do it, and then our revenue would go away, and we wouldn’t be able to have cops to keep us safe, firefighters to rescue us, teachers to educate our kids.”

Mayor Bloomberg has flip-flopped from his position in 2008 backing NY State Governor David Paterson’s tax on millionaires:

I can only tell you, among my friends, I’ve never heard one person say I’m going to move out of the city because of the taxes. Not one. Not in all the years I’ve lived here. You know, they can complain, ‘Ugh, I got my tax bill, it’s heavy.’ But my friends all want to live here.

The “good” Mayor has been in England, where he maintains a home and a business, addressing Britain’s governing Conservative Party on Wednesday. He compared his governing style to the right wing austerity government of Prime Minister David Cameron:

Mr. Bloomberg noted that both he and Mr. Cameron had taken office amid crises – the mayor in the aftermath of the Sept. 11 terrorist attacks, and the prime minister during the world economic crash.

Mr. Bloomberg said he and Mr. Cameron had each made difficult decisions on the economy, a reference to the sweeping austerity measures Mr. Cameron has introduced. Balancing his own city budget, Mr. Bloomberg said, involved “raising taxes and cutting spending, and let me tell you, that didn’t make me the most popular man in New York.” [..]

Conservative officials, who have felt hampered by their coalition government with a liberal party here, also expressed admiration for the New York police commissioner, Raymond W. Kelly, who visited London before the Olympic Games this summer. “They run things a bit like we’d like to,” one official said, “if we didn’t have to worry about inconveniences like compromise.”

The British conservatives would love to be able to crack down o civil liberties as Bloomberg and his private army, the New York Police Department, has. What our world traveling mayor failed to point out to his austerian buddies was that NYC’s rich make 40 times more that the average poor person living in the city. Nor would he have mentioned that NYC’s poverty rate reached its highest point in a decade rivaling some Sub-Saharan countries:

Median household income in the city last year was $49,461, just below the national median and down $821 from the year before (compared with a national decline of $642). Median earnings for workers fell sharply to $32,210 from $33,287 – much more than the national decline.)

New Yorkers at the bottom end of the income spectrum lost ground, while those at the top gained.

Median income for the lowest fifth was $8,844, down $463 from 2010. For the highest, it was $223,285, up $1,919.

In Manhattan, the disparity was even starker. The lowest fifth made $9,681, while the highest took home $391,022. The wealthiest fifth of Manhattanites made more than 40 times what the lowest fifth reported, a widening gap (it was 38 times, the year before) surpassed by only a few developing countries, including Namibia and Sierra Leone.

It is well past time that taxes on the wealthiest were raised, and not in just New York City. Richard (RJ) Eskow thinks the tax rates for the highest earners should be doubled:

Forget the “Buffett rule.” It’s not enough. What’s more, “letting the Bush tax cuts expire for the rich” isn’t enough either — although it might get us halfway there.

As for that “Simpson Bowles” so-called “deficit reduction” plan: It’s a hoax, another ploy to give the ultra-rich yet another huge tax cut — unless you believe that the lobbying fairy will magically grant a wish that’s never been granted before: an end to billionaires’ loopholes.

If you buy that — which I don’t — then the plan’s just grossly unfair.

The real moment of truth Washington won’t face is this one: It’s time to admit that we can’t rebuild our economy — or balance the Federal budget — without raising taxes on the very wealthy. That’s what Simpson, Bowles, and all their highly-funded friends won’t tell you: We need to raise their taxes a lot.

And by “a lot,” I mean doubling them.

Let’s be clear: I’m not talking about imposing sharp increases on incomes over $250,000 or even $500,000, at least not until the economy’s healthier. At those levels an expiration of the Bush tax cuts would probably be enough. But once you hit income of a million dollars a year and over, we should go back to the higher tax rates that were in place for millionaires during the Nixon years.

Not a bad idea, at least until the economy has stabilized and there is a handle on regulating Wall St.

Oh and Mr. Bloomberg, do NYC a favor, resign and stay in England.

This weekend on MSNBC’s Up with Chris Hayes Nobel Prize winning economist Professor Joseph E. Stiglitz and Avik Roy, an adviser to Presidential Republican nominee Mitt Romney, debate the nominee’s tax plan and its impact on Americans.

In the second segment, Prof. Stiglitz and Mr. Roy try to outline what is known about Mr. Romney’s tax plan and whether he would be able to implement the plan if elected president.

Here comes Simpson-Bowles to spare the bloated Pentagon budget and avoid letting the Bush/Obama Tax Cuts expire:

U.S. Treasury Secretary Timothy Geithner recently suggested the Simpson-Bowles deficit reduction framework is the way forward in terms of balancing the federal budget. [..]

“We need to take advantage of the incentive created by the sequester and these expiring tax cuts to force this town to confront and take on the things that divide us now in these long-term fiscal reforms so we can go ahead and govern,” he said. “This is a place where people spend a lot of time worrying whether Washington can work again and for Washington to say, ‘We’re going to defer,’ I don’t see how that would be helpful to confidence.” [..]

David Dayen at FDL News Desk adds his take on Geithner’s appearance before the Council on Foreign Relation:

The lame duck session has so many fiscal issues expiring at the same time that many view it as an opportunity to put together the long-sought “grand bargain” on deficit reduction. Erskine Bowles and Alan Simpson have recently come out of their shells and resumed a high-profile media tour in an effort to get their framework into the discussion for the lame duck session. The Bowles-Simpson plan does include tax increases of hundreds of billions above the Bush tax cut rates, albeit lower than what would occur if the Bush tax cuts were allowed to completely expire.

Because of this, Democrats like Nancy Pelosi have embraced Bowles-Simpson to tease Republicans for their opposition to higher tax rates. But that also puts Democrats on the hook for embracing cuts to the social safety net, including Medicare and Social Security. And on Wednesday, Geithner said that Bowles-Simpson is “the only path to resolution politically [and] growing essentially economically, and I think that’s where it’s going to end up.” He didn’t make the caveats on Social Security or other entitlements.

David also noted that Sen. Max Baucus (D-MT), chairperson of the tax writing Senate Finance Committee, would hold hearing in the next few weeks on Bowles-Simpson and Domenici-Rivlin, which combine revenue-raising tax reforms with restraint on entitlement spending. Baucus told The Hill:

“My view is everything’s on the table,” Baucus said. “That’s a psychology which I think is very important to keep people talking, keep people working.”

In his comprehensive article on Geithner’s alliance with JP Morgan CEO Jamie Dimon and Cat Food Commission co-chair former Sen. Alan Simpson (R-UT), Richard (RJ) Eskow had this to say about the coming of Simpson-Bowles:

Geithner said Simpson-Bowles was the perfect recipe: “tax reforms that raise a modest amount of revenue tied to spending savings across the government that’s still preserving some room to invest in things that matter to how we grow moving forward.” He added, “There’s no plausible way to get there economically or politically without that kind of balanced framework again that marries tax reform with broader spending reforms,”

Geithner is joining leading Democrats on the Hill like Sen. Max Baucus and Rep. Nancy Pelosi in backing the plan. And take careful note of the fact that they’re all using the phrase “tax reform” instead of “tax increases.” They don’t just plan to pay for the wealth and misdeeds of the Dimon crowd with your Social Security and Medicare benefits. They also plan to raise your taxes, not theirs. The Simpson Bowles plan would actually lower the top tax rate for people like Jamie Dimon, while “tax reform” would tax away tax deductions for the middle class’s health insurance, mortgages, and other expenses.

All our elected officials are completely out of touch with what Americans want and need. Yes, indeed, something wicked this way comes.