Posts Tagged ‘wealthy’

Bill Clinton Says Rich Can Afford To Have Their Taxes Raised – But He Won’t Even Pay Hillary’s Campaign Debts

December 14, 2010

I don’t have the transcript for it, and the closest I could quickly find was this bit from Reuters:

“In my opinion, this is a good bill, and I hope that my fellow Democrats will support it,” Clinton said.

He admitted that as a high earner himself he would benefit from the Bush-era tax cuts for the wealthiest Americans that Democrats, including Obama, dislike. But with an extension of unemployment benefits and a cut in payroll taxes, Clinton said the package was the best bipartisan deal to help the country.

But I directly heard Slick Willy say that he could afford paying higher taxes.  And that even though he would personally suffer, it was the right thing to do for the country.  Because that’s just what a noble guy he is.

And Obama very definitely said it, as the Washington Times article entitled, “Obama: Rich can afford tax hike” should make abundantly clear.

But what Bill Clinton CAN’T seem to afford is wife Hillary’s campaign debts from now more than two full years ago.

The Clinton’s will eventually pay them, I don’t doubt.  With Other People’s Money, of course:

Bill Clinton is giving someone a chance to spend a day with him in New York City to help pay off his wife’s 2008 campaign debt.

The former president has sent out a new fundraising pitch on behalf of his wife, Secretary of State Hillary Rodham Clinton, who still owes her presidential campaign pollster.

Hillary Clinton owed Mark Penn and his firm more than $479,000 as of September, according to a campaign report filed with the Federal Election Commission.

Bill Clinton can pitch for raising income taxes on Other People.  Because he knows damn well he’ll weasel out of them with the help of accountants who are nearly as slick as he is.

He’s not interested in “paying his fair share.”  If he was, he’d write the check for his family campaign debts, instead of trying to sucker you into writing the check to pay off his wife’s debts for him.

Do you think Slick Willy’s going to be digging out his checkbook to pay off YOUR debts anytime soon?

Clinton and other wealthy liberals can say this kind of crap because they are unrelenting hypocrites.  Their souls swim in hypocrisy the way fish swim in water.  And so they know that they can raise taxes to whatever level they can manage, and that they’ll be able to afford every tax dodge and tax shelter and tax loophole that money can buy.

But most people can’t.  They’re forced to basically pay out the maximum rate, because they don’t have the money to afford the tax attorneys who can shelter their assets.  So they get screwed while the Slick Willy’s of the world keep getting other people to pay their debts for them.

And, of course, the Clintons and the Obamas have other little perks that honest people don’t have.  When Bill Clinton was elected as the attorney general for the state of Arkansas, his wife Hillary immediately got hired by the Rose Law Firm.  And when Bill was elected governor, suprise, suprise, Hillary suddenly made partner.  And there was that $1,000 Hillary turned into a hundred grand inside of a year with the painfully obvious benefit of insider trading tips.

And Michelle Obama benefited every scintilla as much from her husband’s political machinery.  Within months of Barack being elected state senator, Michelle Obama received a $195,000 pay increase from the “not for profit” hospital where she worked.  And at that same time, she was suddenly put on boards of companies for lucrative money – yes, including another huge stock payout.

Maybe you get money literally thrown at you on account of your spouse’s political connections.  I don’t.  Maybe the fact that I have to work hard for my money, rather than riding the coattails of a big money political machine and the businesses craving the opportunity to purchase influence makes me less willing to pay more taxes to the government.  Because I can’t tell my political patronizers, “The price just went up.”

And this liberal progressive hypocrisy on taxes and influence peddling with Other People’s Money  is as old as, well, liberal progressivism.

Barack Obama n0minated Tom Daschle to be the Secretary of Health and Human Services – and incredibly powerful position in the advent of the age of ObamaCare.  The only problem was that Daschle the Democrat hadn’t paid his taxes.

This happened again and again with a slew of Democrats who thought that their screed of “paying your fair share” only applied to Other People.  And how DARE you think that Democrats should be held accountable for standards that should only apply to Other People.

Ultimately, Obama’s nomination for Treasury Secretary went through, even though the man who would be in charge of tax enforcement hadn’t bothered to pay his own income taxes.  Because, by that time, it was apparent that finding an honest Democrat was just impossible.

And, of course, we now all know about the history of the Democrat in charge of writing tax laws for everyone else, Rep. Charlie Rangel, the now-disgraced former Chairman of the House Ways and Means Committee.

But, of course, if you think he should be criminally prosecuted for his abject failure to follow his own tax laws, well, you’re just a racist, aren’t you?

If the Congressional Black Caucus really believed that “the rich should pay their fair share of taxes,” they’d have hung Charlie Rangel up by his balls like he deserved, rather than labeling anyone who pointed out that he was a tax-cheating hypocrite fraud as a racist.

And in a way, the racist Congressional Black Caucus is completely right.  Because all Charlie Rangel did was act like a Democrat.  And if every Democrat was arrested for hypocrisy, I mean, there just wouldn’t be any Democrats walking the streets, would there?

Remember, Charlie Rangel is a good Democrat.  A GREAT one, in fact.  Because he was totally true to the Democrat philosophy: he wanted Other People to pay higher taxes, while he himself slept on the beach in front of his villa – which he hadn’t bothered to pay taxes on in SEVENTEEN YEARS.

Amazingly, Charlie Rangel – who was re-elected yet again in spite of the fact that he is a big fat criminal and a fraud, because that’s just the way Democrats roll – was one of the vocal Democrats spouting their opposition to “the rich” getting away with paying lower than communist-level income taxes.  Because, again, Democrats make up for their ignorance with sheer unmitigated chutzpah.

Rangel should do a lot less talking and a lot more shutting the hell up.

The same thing happened the LAST election, in 2004.  John Kerry was lecturing us in that snotty tone of voice of his on paying our fair share of taxes, and how the rich owed more.

Well, George Bush – the guy who believed in LOWER taxes – basically paid income taxes on the maximum federal income tax rate of 35% without taking deductions he qualified for.  What did the Kerrys pay? How double damn DARE you ask!!!

Kerry’s Wife Pays Less Taxes Than Median Family

“According to HUD, the median family income for the U.S. for 2003 was $56,500.  After applying the standard deduction of $9,500 for married filing jointly we end up with a taxable income of $47,000.  This puts the average family in the 15 percent tax bracket.  Kerry’s wife, using tax shelters, managed to pay only an effective federal tax rate of 11.5 percent, compared with the top federal income tax rate of 35 percent.  She paid $587,000 on an income of $5.1M.

“If Kerry wants the rich to pay more he should start with his wife.”

Despite the release of partial financial information, John and Teresa Kerry have not explained why, if it’s so important for the evil rich to pay more taxes, they didn’t add a voluntary addition to their check to the IRS.

So the arrogant and always snooty Kerrys – who demanded that Other People pay far more on their income taxes paid less than one-third (rhymes with ‘turd’) the tax rate they would have paid if they were honest people who WEREN’T full of hypocrisy over their eyeballs.

Because John Kerry and his rabid wife are Democrats.  And to be a Democrat is tantamount to being a vile pile of slime these days.

Has John Kerry learned the error of his ways and reformed from his hypocrisy?  I hate to tell you, but his yacht screams hell no:

Sen. John Kerry, who has repeatedly voted to raise taxes while in Congress, dodged a whopping six-figure state tax bill on his new multimillion-dollar yacht by mooring her in Newport, R.I.

All this to say that Democrats say “the rich should pay more” only because they are vile dishonest hypocrites who know that they won’t have to follow the rules that they afflict honest people with.

The facts are abundantly clear: allowing citizens – ALL citizens, not just the ones who pass Democrats’ Marxist class warfare test – to keep more of their own money which they earned and they deserve to keep is good for the economy, good for job-creation and even good for the government tax revenues.

Not that you can trust Democrats who are too damn dishonest to bother to pay their own taxes while railing at everyone else to pay more to admit that.

Every Democrat who says that “the rich should pay more” should be checking the box on their tax forms and donating whatever percent they want Other People to pay to the government.  That’s right, you hypocrite Democrats: why don’t you put your money where your mouths are for just once in your life and do what you are demanding that Other People do?

That goes for the more than half of you Democrats who don’t pay ANY federal income taxes at all.  You can file a tax form.  You can check that box.  You can give 39.6% of your money – or whatever you demand that Other People pay – to the government.  You’re just too damn full of hypocrite to do so.

So you just eat dirt, you Bill-and-Hillary Clinton John-and-Teresa Kerry Tom Daschle Timothy Geithner Charlie Rangel Democrats.  You can be as self-righteous – or as Barack Obama himself called you, “sanctimonious” – as you want.  But you know and I know that you’re really nothing but a bunch of lousy greedy hypocrites who want Other People to pay YOUR “fair share.”

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Obama Demoagogues Boehner While Mainstream Media Misrepresents Him

September 15, 2010

I’ve already written (and still more here) about increasing numbers of Democrats doing a tacit “credit Bush” move – as opposed to the mindless failure of responsibility inherent in the “blame Bush” garbage – by demanding that ALL of the Bush tax cuts be extended at least temporarily.

So you’ll have to forgive me for changing the emphasis of the following excellent article, even as I preserve its substance.

Yes, Democrats are increasingly starting to change their tune on the Bush tax cuts.  Previously, they were blaming Bush’s tax cuts for the economic collapse; now growing numbers of them are saying they should be extended.  But let’s not forget to examine the classless, tasteless, and clueless demagoguery that is daily spit out of the Obama White House.

From HotAir:

Rank and file Dems to Pelosi: extend all the Bush tax cuts
posted at 2:13 pm on September 13, 2010 by Ed Morrissey

After John Boehner reiterated his call to extend all of the Bush-era tax cuts expiring at the end of the year, the White House once again tried hammering him as an extremist looking to protect the rich at the expense of the middle class.  House Democrats will undercut that messaging with their own call to put off tax hikes for the next couple of years.  In a letter circulating on Capitol Hill and reviewed by Politico, Blue Dogs and other Democrats tell Nancy Pelosi that this is no time to raise taxes or to extend the uncertainty:

POLITICO has obtained a draft of a letter from rank-and-file lawmakers to Pelosi and Majority Leader Steny Hoyer urging them not to let tax rates rise for Americans at the highest income levels.

“We believe in times of economic recovery it makes good sense to maintain things as they are in the short term, to provide families and businesses the certainty required to plan and make sound budget decisions,” the House members write in a letter that was being circulated for signatures on Friday and is expected to be delivered today or Tuesday.

Reps. Jim Matheson (Utah), Glenn Nye (Virginia), Melissa Bean (Ill.) and Gary Peters (Mich.) drafted the letter and are working to gather support, mostly from the moderate Blue Dog and New Democrat coalitions, for at least a temporary extension of the rates for top income earners as well as those in the lower brackets.

This comes at the same time that Boehner’s remarks have stirred controversy — although largely from the absence of context.  The media originally reported them as a retreat back to the White House petition.  Instead, Boehner said that he would vote to approve a bill that only extended the middle-class portion of the tax cuts if that was all that was offered.  Boehner scoffed at the notion that he was holding those tax-cuts extensions hostage, which a moment’s thought would prove correct.  Pelosi has a 77-seat majority in the House, and can pass anything Democrats want.

Clearly, some Democrats are now wondering if they want a class war right before the election.  That kind of strategy plays well in districts like Pelosi’s, but is falling flat in the rest of the country.  Democrats played that card in 2006 and 2008, and after four years of control in Congress, it’s no longer a trump card.  Democrats need to find a way to generate growth, and the only way to do that is to get people with capital to put it to work — which the coming tax hikes will prevent.

The Obama administration is doing its best to portray Boehner as an extremist.  Unfortunately for Obama, his own party shows that it’s the White House on the extreme, pushing tax hikes in the middle of an economic stall.  It also points to a bigger problem with the strategy, which is that punching down below one’s weight is never a good idea.  Instead of marginalizing Boehner, the White House is practically lending him the bully pulpit by putting Boehner at the same level as the President.  That helps the GOP, because most of the electorate understands that tax hikes will be disastrous for the economy — and Obama doesn’t exactly have a track record of success that gives him the benefit of the doubt.

So Chris Boehner is saying that, as a principled conservative who believes in the radical premises that Americans actually deserve to keep more of the money that they earned, he wants tax cuts for everyone.  But if he can’t get tax cuts for everyone, he’ll vote to give tax cuts to as many people as he possibly can.

Versus Obama (i.e., Obama Akbar!!!), whose position is that he will screw every single American and screw the entire economy unless his Marxist class warfare system prevails.  Because, dammit, he wants to have all the centralized commissar power to “spread that wealth around.”

And Obama calls Boehner the “extremist.”

Meanwhile, the mainstream media is deceitfully misrepresenting Boehner’s principled position into some kind of retreat.

But here’s what Boehner said:

Boehner told CBS’ “Face the Nation” that “If the only option I have is to vote for those at $250,000 and below, of course I’m going to do that.”

But, he said, “I’m going to do everything I can to fight to make sure that we extend the current tax rates for all Americans.”

And, he said, “I’ve been making the point now for months that we need to extend all the current rates for all Americans if we want to get our economy going again and we want to get jobs in America.”

I know, I know, what an “extremist.”  And, of course, Obama – who will blow up the entire country if he doesn’t get absolutely everything he wants – what a “moderate.”

And, of course, the media is clearly accurately representing Boehner’s view as a “retreat.”  Because, as any fool (and only fools, fwiw) knows, no conservative wants tax cuts for the middle class.  They just want tax cuts for the rich.  Because conservatives are evil and they hate the middle class.

When Mark Twain said, “A lie can get halfway around the world before the truth can even get it’s boots on,” he could have been talking about the American mainstream media.  Because that seems to be their standard operating procedure.  It is most certainly Barry Hussein’s.

I have written about the fact that tax cuts for “the rich” are the best way to increase both jobs and government revenues.  The arguments are on our side.  And in fact rather than being “extremist,” the position of favoring lower taxes for ALL Americans is the reasonable one we can take.  I hope you take time to read that.

The American people are now recognizing that Obama was fundamentally wrong about his stimulus; he was profoundly wrong about his ObamaCare; he was flagrantly wrong about his cap-and-trade system; he was terribly wrong with his green jobs nonsense; he was terrible wrong about immigration issues and the Ground Zero mosque; he endangered America by being completely wrong on Iran; and now he couldn’t be more wrong about his tax policy.

Where has this clown been right about anything?

Obama has said in his usual demagogic way, “If I said the sky was blue, they’d say no.”  The problem with Obama’s analogy is that if he said the sky was blue, it would probably be nighttime and the sky would actually be black.  Look at the sky at 2 AM and tell me it looks blue to you.  Obama began his presidency with a lie, PROMISING he wouldn’t run in 2008.  And not only has he never told the truth since, but he has proven that he is disastrously incompetent, as well.  The other problem with Obama is he’s not saying things like “the sky is blue” that everyone can reasonably agree to; he’s saying extremist, radical things that will implode this country.  If Obama would only pursue semi-reasonable policies, he’d get support from Republicans.

Let’s realize that Obama is a demagogue, a liar, an incompetent, and unfit to be president.  Let’s do an even better job ignoring him.  Let’s realize that if the mainstream media reports something, it is very likely at least mostly untrue.  Let’s realize that cutting taxes for everyone – especially the people who actually create jobs in this country – is far and away the best path to prosperity.  And let’s realize that we need conservative policies if we’re going to get out of this hole and move forward

Americans Recognize Obama A ZERO On Economy

July 23, 2010

What does a president do when his country recognizes he is an abject failure?

July 23, 2010
CNN Poll: Obama’s approval on economy drops to new low
Posted: July 23rd, 2010 12:30 PM ET

Washington (CNN) – Americans approval of how President Barack Obama is handling the nation’s economy has dropped to its lowest level of his presidency, according to a new national poll.

A CNN/Opinion Research Corporation survey indicates that 42 percent of the public approves of how Obama’s dealing with the economy, down 2 points from March, with 57 percent disapproving of his performance on the economy, up 2 points from March. The survey’s Friday release comes as the president made comments at the White House on what he termed the progress made this week on the economy and job recovery.

Full results [pdf]

The poll suggests a wide partisan divide on the issue, with nearly eight in 10 Democrats giving the president a thumbs up and nearly nine in 10 Republicans disapproving of Obama’s job on the economy. According to the survey, two-thirds of independents disapprove of the president’s economic performance.

The public hasn’t given Obama good marks on the economy since last September, and his approval rating on the economy, now at 42 percent, has been stuck in the mid-to-low 40s throughout this year,” says CNN Polling Director Keating Holland. “Part of the reason for that is that Americans haven’t seen much to cheer about on the economic front. Nearly eight in ten say that economic conditions are somewhat poor or very poor.”

While there were some vague signs of optimism in poll results earlier this year – when the number of Americans who said that the economy was in “very poor” shape had been slowly but steadily declining – that seems to have fizzled. Thirty-seven percent said things were in poor shape in our May poll; the same number feel that way now.

So what can Barry Hussein do?  Lying about his bogus “summer of recovery” isn’t working.

And he can’t agree with other Democrats that we should keep the Bush tax cuts in place in order to prevent damaging the economy even more.  He’s too much of an ideologue for that.

Dems may keep Bush tax cuts
By Alexander Bolton – 07/22/10 06:00 AM ET

Democrats are considering a plan to delay tax hikes on the wealthy for two years because the economic recovery is slow and they fear getting crushed in November’s election.

It could mean a big reprieve for families earning $250,000 and above annually.

President George W. Bush’s tax cuts will expire at the end of the year unless Congress acts to delay their sunset.

Some Democrats are now arguing forcefully that a delay is a win-win plan that would help the federal budget without hurting the economy.

Wealthy families would not have an incentive to cut back on spending and budget writers could assume an inflow of tax funds in future years, making five- and 10-year budget projections look less scary.

How long have the Democrats been demonizing the Bush tax cuts?  Seven long years?  And now more and more of them are arguing – likely out of fear for their own political skins – that they were misrepresenting the truth all along, and the Bush tax cuts maybe didn’t actually cause the Dark Ages after all.

But Obama is way too much of an ideologue for that kind of rubbish.  That kind of acknowledgment is about as likely as a bomb-vest-wearing terrorist acknowledging that maybe Allah ISN’T so great, after all.

So what’s Obama to do?

Only one option remaining: keep blaming Bush and Republicans.  No matter how obviously asinine it is, never quit blaming, never quit trying to divert attention for his failures to some GOP straw man.

The last time Republicans ran Congress in January 2007, unemployment was at 4.6%.

Punishing The Rich Punishes The Poor By Punishing Economic Growth

July 15, 2009

I don’t know about you, but I have never gotten a single job – or even a single job offer – from a poor person.  And even when I’ve applied for a job at a company, there was always a rich person or persons up the food chain who had made that job possible.  We “ordinary people” don’t stop and think about how much we have actually depended upon the rich.  But as our economy tanks, maybe it’s time we did.

How the Mighty Have Fallen

The rich really aren’t like you and me–: They’re historically recession-proof. But this time they’ve been hit hard—and we may all be the poorer for it.

By Robert J. Samuelson | NEWSWEEK
Published Jul 11, 2009
From the magazine issue dated Jul 20, 2009

Just who is “rich” in America is a matter of considerable disagreement. No one disputes that Bill Gates (No. 1 on last year’s Forbes400 list with a net worth of $57 billion) and Warren Buffett (No. 2 at $50 billion) are wealthy or, indeed, that everyone on the Forbes list qualifies (the poorest had a net worth of $1.3 billion). But as you move from billions in net worth to the mere hundreds or many tens of millions, and then to annual incomes of the mere hundreds of thousands, the arguing begins.

In April, The Wall Street Journal ran an article sympathetically portraying families with incomes around $250,000, the level that President Obama has targeted for tax increases. By most measures, these families rank in the top 2 percent to 4 percent of the income spectrum. But many—possibly most—see themselves as “upper middle class” and not “rich,” the paper reported.

“I’m not after sympathy,” said the wife of a surgeon who makes about $260,000. “What I want is a reality check on what rich means. I can pay my mortgage and can buy some clothes. I’m not going without, but I’m not living a life of luxury.” The mayor of San Jose scoffed at $250,000. That’s what a two-engineer couple might make, he said. It put them in “the upper working class” and wasn’t enough to “buy a home in Silicon Valley.”

The article triggered an outpouring of e-mails—many applauding that someone had finally described their harried plight; others sarcastically wondering what planet the whiners lived on. But so much angst among the affluent—however defined—attests to something else: the present recession, unlike any other since World War II, has deeply shaken the nation’s economic elite.

With secure jobs and ample incomes, the rich and the near rich are supposed to be insulated from economic slumps. Well, not this time. Many feel fearful, threatened, and impoverished. In a recent Unity Marketing survey of consumers with incomes exceeding $250,000, 60 percent said their financial situation had deteriorated; 39 percent said bonuses or commissions had been cut; 29 percent said their regular income had been reduced; 8 percent said they’d lost their jobs; and 4 percent said their hours had been reduced. Even with a partial stock-market rebound, many of America’s most affluent feel vulnerable to layoffs and lost income, just like other Americans. “This has been an equal-opportunity recession,” argues Pam Danziger of Unity Marketing.

Collateral damage is widespread. Sales at luxury chains have fallen sharply; same-store revenues for Saks Fifth Avenue and Neiman Marcus dropped about 25 percent in recent quarters. Many country clubs are struggling to hold members. In New York’s Hamptons, unsold homes reached a 34-month supply early this year at the prevailing sales pace; buyers had hibernated. Economist Susan Sterne, a specialist in consumer spending, calls it “the demise of luxury… the people who buy $3,000 Gucci handbags. You see it in the luxury-car market and housing.”

Some causes are obvious. With the recession’s epicenter on Wall Street, layoffs and bonus reductions among highly paid investment bankers, traders, and money managers have thinned the ranks of the rich. The plunge in share prices has especially hurt the wealthy, because they disproportionately own stocks.

But something bigger may also be happening. In a new study, economists Jonathan Parker and Annette Vissing–Jorgensen of Northwestern University find that—contrary to conventional wisdom—income losses in recessions are proportionately greater for the well-to-do than for middle-income households. By their estimates, the relative income loss for the top 10 percent of the population is 26 percent larger than for the average household. For the top 1 percent, the contrast is even starker. Their proportionate loss is more than double—that is, if the average household had an income loss of 10 percent, the top 1 percent would lose more than 20 percent.

That doesn’t mean they suffer more hardship. It’s almost certainly tougher for a family with an income of $50,000 to adjust to a $5,000 loss (10 percent) than it is for a family with $1 million to compensate for a $200,000 drop (20 percent). And the poor experience the highest joblessness. Still, the increased economic vulnerability of the upper classes is a change from the past. Before the 1980s, the conventional wisdom was true, Parker and Vissing–Jorgensen say. Higher income conferred more stability.

It’s not entirely clear what changed. Parker thinks that “one cause is the dramatic increase in pay for performance.” In the past quarter century, salaries for top executives and managers have increasingly consisted of stock options, year-end bonuses, and sales incentives, he says. When the economy thrives, pay rises; when it sours, pay falls. Parker also cites the growth of professionals (lawyers, doctors, accountants, consultants) among the economic elite. “When the demand for elective surgery or legal services or consulting services goes down, so do their incomes,” he says. Even among the top one tenth of 1 percent, wages represent half their income, and “proprietors’ income” (essentially profits from a business or partnership) accounts for another quarter. The stereo-type of the rich living mainly off dividends and interest income is increasingly outdated. Many of the wealthy are owners of small businesses whose well- being is—to some extent—hostage to the business cycle.

It will strike many, no doubt, that the setbacks and anxieties for the country-club set are just deserts. Some will correctly note that well-paid CEOs and investment bankers helped bring about the economic crisis. They’re just getting their comeuppance—and it’s about time. Others will point out that countless studies have shown that, in recent decades, the gap between the rich and the rest has widened. From 1990 to 2006, for instance, the share of pretax income received by the top 1 percent grew from 12 percent to 19 percent, says the Congressional Budget Office. The present reverses are a healthy correction. So goes the argument.

All this is understandable, but incomplete. The criticism usually presumes that if the rich and near rich get less, someone else will get more. Redistribution achieves a better social balance. Sometimes that happens. But sometimes when the rich get less, no one else gets more. Regardless of how the rich earned their money—trading bonds, performing surgery, starting new companies, providing legal work—it’s no longer so lucrative. The rich get poorer, but no one else gets richer. Society is worse off.

“Trickle-down economics” is a despised phrase and concept to many, but it also embodies a harsh reality. The rich often play a pivotal role in U.S. economic growth, and if they are enfeebled, then the consequences are widespread. Consider:

Consumption spending, the economy’s main engine, is skewed toward the upper classes, because they have most of the income. In 2009, households with more than $200,000 in income account for 3.4 percent of the total but will generate almost 14 percent of consumer spending, estimates economist Sterne. Households with incomes between $100,000 and $200,000 represent about 14 percent of the population and 34 percent of spending. Together, these groups generate nearly half of U.S. consumption, although they’re only a sixth of the population.

Similarly, the rich pay most of the taxes. In 2006, the richest 1 percent paid 28 percent of all federal taxes, estimates the CBO. The richest 10 percent (including the top 1 percent) paid 55 percent. The system is progressive—that is, the richer people get, the more of their income they pay in taxes. In 2006, the effective rate for the top 1 percent was 31 percent, reflecting all federal taxes. By contrast, the poorest fifth paid an effective rate of 4 percent. (State and local taxes are less progressive, because they rely more heavily on regressive sales taxes.)

The wealthy dominate charitable giving. In 2004, families with a net worth exceeding $5 million made up about 1.5 percent of all U.S. families but accounted for 27 percent of contributions, according to the Center on Wealth and Philanthropy at Boston College. Those with a net worth between $1 million and $5 million, about 7 percent of all families, represented another 20 percent of contributions. So, a tenth of American families made nearly half of all gifts.

Wealthy individuals are an important source of money for venture capital—funds invested in startup companies. Individuals and families represent about 10 percent of VC money (most of the rest comes from pension funds, college endowments, and insurance companies).

When the affluent retrench, they drag a lot with them. For example, the financial crisis led to a 44 percent fall in year-end bonuses at Wall Street firms, to $18.4 billion in 2008 from $32.9 billion in 2007, according to the New York state comptroller. No doubt that struck many as overdue and insufficient. Bankers were overpaid, and huge year-end bonuses encouraged excessive risk-taking. The trouble is that the loss of taxes on the bonuses blew a $1 billion hole in the state’s budget and made it harder to pay for schools, health care, and prisons.

It’s the same story with consumption. In late 2008, spending declined at about a 4 percent annual rate, and, in the first quarter of this year, rose slightly. But Danziger’s surveys show steeper cutbacks at the top. From 2007 to 2008, consumers with incomes from $150,000 to $249,000 reduced spending by about 8 percent, while those above $250,000 cut almost 15 percent. Similarly, charitable giving decreased to $308 billion in 2008, a drop of 5.7 percent after adjustment for inflation, says the Giving USA Foundation, a nonprofit group. Donations may fall further this year. The stock market is a strong predictor of giving. A 100-point rise in the S&P 500 stock index increases charitable contributions by $1.7 billion, says the Center on Philanthropy at Indiana University.

Not all charities have suffered. “Our funding is up 42 percent over last year,” says Ross Fraser of Feeding America, an umbrella group that channels cash and groceries to 206 food banks around the country. “Charities such as ours do well when times are hard. If you have to choose between giving to the ballet and feeding a hungry child, who’s going to win?” But that compounds the pressure on other nonprofits: colleges, hospitals, and environmental groups.

It’s probably true that being rich is more a state of mind than an explicit level of income or wealth. It’s feeling of having enough money so that money is no longer a worry. For many, that sense of security is gone. Michael Silverstein of the Boston Consulting Group reckons there are about 100,000 households with a net worth—counting their homes, stocks, bonds, and businesses—of at least $20 million. Even at these rarefied levels, he thinks, many are rattled. “They’ve seen up to a 30 to 40 percent drop in their net worth from peak to trough.  Some have friends at blue-chip companies like General Electric, AIG, or Citigroup who have lost fortunes invested in company stock,” he says.

What’s unclear is whether the trauma will permanently change behavior. Silverstein is skeptical. “The nice thing about Americans is that they have short-term memories,” he says. “We’ll get out of this—and then the rich will realize they’re rich again and start to spend.” But Danziger, the marketing researcher, thinks the shopping culture has taken heavy hits. Americans have “been on an extended buying spree for the past 20 years. They’ve got stuff—and they don’t need a lot of it,” she says. There’s a growing realization “that material wealth doesn’t make people happy.” Striving to replenish their savings, Americans—even the rich—will skimp on spending.

Once way or another, it’s doubtful that trickle-down economics will soon regain the power of recent decades, when exploding stock and real-estate values and rising salaries were compounded by George W. Bush’s favorable tax changes. But cheering at its eclipse may be premature and misguided. The contradiction is that many of the large gains at the top that are routinely deplored also provide the economic fuel for desired spending at the bottom. If the rich—however defined—remain stuck in neutral, the overall economy may not do much better.

Think about some of the “filthy rich” such as doctors and small business owners.  Ask yourself this: if there wasn’t the promise of high pay at the end of the road, do you think we’d have as many doctors?  Would you spend tens of thousands of hours in study, and thousands of more hours in stressful and sleep-deprived residency, if you weren’t going to be well-paid in the end?  How about small businesspeople?  Would you risk all your savings and years of your time developing a business if you didn’t have the right to expect a real reward if you actually succeeded?

What’s wrong with us for hating such people for their hard work and their success?  Why on earth would we wish them anything but success when we benefit from their succeeding with better health, better jobs, and better lives than we could otherwise ever have apart from them?

There has long been a movement by the political left in America to be more like sophisticated Europe.  Liberals say, “What Europeans do with government is pretty good.  And what they do with civil rights is pretty good.  And what they do with health care is pretty good.”  And there’s this constant movement on the part of the left to be more like Europe.  In our Surpreme Court liberal justices have been quoting what Europeans do in their law.  The fact is, 200 years ago there was the same kind of intellectual elitest movement going on – “Let’s be like Europe.”  Thomas Jefferson made a statement that is applicable today:

“The comparisons of our government with those of Europe are like a comparison of heaven and hell.”

That’s the thing.  As Europe has dived into socialism, fascism, communism, and just about every other “-ism,” what should have been obvious is that Americans shouldn’t be more like Europeans; it should be the other way around.  And socialist redistribution of wealth is neither American nor successful.

There’s a joke that compares the attitudes of Americans with the attitudes of Europeans.  An American rides the bus, sees an expensive sports car, and says, “Some day I’m going to own a car like that.”  And there’s a European who rides the bus, sees an expensive sports car, and says, “Some day that son of a bitch will be riding the bus just like me.”  What makes that joke so sad is that we have too many American liberals who are thinking like the Europeans even as the Europeans are beginning to think more like Americans used to.

As we speak, Democrats are devising more and more ways to fund their massive and frankly European-style socialist spending programs by punishing the rich for their success.  They are going to lift the successful Bush tax cuts and raise taxes on “the rich.”  They are going to impose additional taxes in the form of “surcharges” on “the rich” to try to pay for their socialist-style health care agenda.  As a result the rich – who already pay a shockingly high share of the taxes – will begin to see more taxes than they have seen in decades.  And they will keep coming after “the rich” as long as Marxist-style class-warfare politics pitting the proletariat against the bourgeousie continue to work for them.

Taxes & Stupid: When Less of One Means More of the Other

April 16, 2008

Gallup conducted a survey between 6-9 April, asking, “Are Americans paying Their fair share in federal taxes, paying too much or pay to little?” Here are the results, with the figure on the right representing “too little”:

Middle-income People  4% (pay too little)
Lower-income people 13%
Upper-income people 63%
Corporations               73%

Okay. So that’s what a survey of 1,021 adults thought (with a margin of error at +/- 3%, blah, blah, blah).

Democrats ubiquitiously claim that “It’s time for wealthy Americans and corporations to pay their fair share!” And – judging by this poll, anyway – it appears that they have won the case in the minds of most Americans.

The only problem is that these people are completely wrong.

According to the Congressional Budget Office figures (Historical Effective Federal Tax Rates: 1979-2005, released December 2007) on “Individual Income Taxes”:

The top         1% Pays 38.8%
The top       20% Pays 86.3%
The top       40% Pays 99.5%
The bottom 60% Pays 0.6%

The actual facts are just the opposite from what we are routinely told, aren’t they?  Let me put it in capital letters so you can see it better: THE WEALTHIEST 40% OF AMERICANS PAY 99.5% OF THE INCOME TAXES!!! And they’re not paying their fair share?  The Democrats and the media have won the case in the culture by misrepresenting the truth.

When the Bush tax cuts took effect, it threw a lot of people (in that 60% group) off the tax roles entirely, and created a new lower tax rate (people who’d been paying 15% rate paid a 10% rate, etc).  It is a flat out lie to say that the rich benefitted unfairly from the Bush tax cuts.

Corporations pay a 35% federal tax rate.  Republican Presidential hopeful John McCain wants to reduce that to 25%. Why?  Because he’s trying to make the U.S. more competitive, that’s why! The world average corporate income tax rate for industrial democracies is 24%. The 35% rate – which is the 2nd highest corporate tax rate in the world – makes the U.S. less competitive.  You want to know why jobs are going overseas?  There’s one of the big reasons.  Some of the others are the demands of American labor unions, environmental regulations, the lack of protection from frivilous lawsuits, etc.  But those issues are for another day.

Now, the rare few Democrats who aren’t entirely stupid point to the payroll taxes as evidence that the rich – in spite of what you’ve read above – don’t pay their fair share.  People who earn over $1 million pay 18% of the total federal tax bill; those between $200,000 and $1,000,000 pay 23%; and those between $100,000-$200,000 pay 25% of the total tax. But payroll taxes – which hit middle income people the hardest – are those taxes that pay into Social Security and Medicare.  But in point of fact, the wealthy are virtually banned from these programs (if they use their own retirements funds, they don’t qualify for Social Security and Medicare) – and they certainly don’t get more “benefit” than anyone else in these programs).

Conservatives have frequently talked about lowering payroll taxes – which DO effect the middle class’ bottom line – and who screams about it?  Democrats!  Why?  Because they claim (rightly) that it would hurt Social Security and Medicare.  So they complain about taxes that they have repeatedly refuse to allow Republicans to lower?  That’s nice.

Here’s another issue: the United States currently has a 67,000 plus page tax code!  Does that sound like the pathway to efficiency to anyone?  We have an incredibly non-competitive and inefficient economy because of this idiocy. Democrats have done to our economy what the EPA did to our car engines in the mid-1970s.

What we need to do is to return to the 1986 Bill Bradley – Ronald Reagan Commission compromise that lowered tax rates but removed loopholes. But Democrats in the 22 years that have followed have encouraged unwise behavior by adding tax loopholes (for pet projects such as efficient cars, community colleges, ethanol, etc.). Obviously, Republicans have fed from this trough as well, but let’s not be dumb as to who keeps this mindset going.

We need to return to the Bradley-Reagan mindset to eliminate these breaks and return to a competitive and efficient economy. Every time the government hands out another loophole, they are deliberately encouraging an embrace of an inefficiency.  It’s a way of saying that we (the government bureaucracy) want to turn something that people would not rationally do into a tax break loophole so they will do what they would not do otherwise. That’s not the path to a healthy economy.  It’s the guaranteed path to a dysfunctional, schizophrenic economy.

Democrats and the media outlets rail at the wealthy, and blame “tax breaks that benefit the rich” for virtually every ill facing society.  But stop and ask yourself, “Who gave me my job?” Was it a poor guy, or was it a rich guy? Unless you are working on straight commission for one of those guys on the city street corner who wash car windows at traffic signals, you probably got your job from a rich guy.  Now, as long as that rich guy is making a sufficient profit, you have your job.  But what happens if he isn’t making a profit anymore?  What happens if you decide to vote for people who will raise his taxes, increase his costs and expenses, and lower his profits?  Congratulations: you lose your job.

This demagoguery has got to stop.  The wealthy create jobs by investing in markets that supply funds, by starting businesses themselves, and by managing their assets wisely.  The Democrats – who routinely divide people into groups according to race, gender, and sexual orientation – want to play their Ace card and divide people into economic classes as well.  Realize that’s already been tried by Karl Marx, and it didn’t turn out too well.  John Edwards’ and other Democrats’ talk of “two Americas” is little more than a recasting of the Communists’ tired bourgeoise vs. proletariat class-hatred.

It’s time Americans wised up, stopped playing self-defeating games of class warfare, and got together on tuning up the U.S. economy to perform – for everybody – the way that it is capable of performing.