Why would you expect an extension of the middle class tax cut from the least productive congress in US history?

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Warren Buffet weighs in again

A Minimum Tax for the Wealthy

By WARREN E. BUFFETT

November 25, 2012

Between 1951 and 1954, when the capital gains rate was 25 percent and marginal rates on dividends reached 91 percent in extreme cases, I sold securities and did pretty well. In the years from 1956 to 1969, the top marginal rate fell modestly, but was still a lofty 70 percent — and the tax rate on capital gains inched up to 27.5 percent. I was managing funds for investors then. Never did anyone mention taxes as a reason to forgo an investment opportunity that I offered.

Under those burdensome rates, moreover, both employment and the gross domestic product (a measure of the nation’s economic output) increased at a rapid clip. The middle class and the rich alike gained ground.

So let’s forget about the rich and ultrarich going on strike and stuffing their ample funds under their mattresses if — gasp — capital gains rates and ordinary income rates are increased. The ultrarich, including me, will forever pursue investment opportunities.

And, wow, do we have plenty to invest. The Forbes 400, the wealthiest individuals in America, hit a new group record for wealth this year: $1.7 trillion. That’s more than five times the $300 billion total in 1992. In recent years, my gang has been leaving the middle class in the dust.

A huge tail wind from tax cuts has pushed us along. In 1992, the tax paid by the 400 highest incomes in the United States (a different universe from the Forbes list) averaged 26.4 percent of adjusted gross income. In 2009, the most recent year reported, the rate was 19.9 percent. It’s nice to have friends in high places.

The group’s average income in 2009 was $202 million — which works out to $97,000 per hour. Yet more than a quarter of these ultrawealthy paid less than 15 percent of their take in combined federal income and payroll taxes. Half of this crew paid less than 20 percent.

And — brace yourself — a few actually paid nothing.

We need Congress, right now, to enact a minimum tax on high incomes. I would suggest 30 percent of taxable income between $1 million and $10 million, and 35 percent on amounts above that. A plain and simple rule like that will block the efforts of lobbyists, lawyers and contribution-hungry legislators to keep the ultrarich paying rates well below those incurred by people with income just a tiny fraction of ours. Only a minimum tax on very high incomes will prevent the stated tax rate from being eviscerated by these warriors for the wealthy.

All of America is waiting for Congress to offer a realistic and concrete plan for getting back to this fiscally sound path. Nothing less is acceptable.

Warren E. Buffett is the chairman and chief executive of Berkshire Hathaway.

Howard Fineman in fine form

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I know where I'll be on Christmas Day

You Make Me Dizzy Miss Lizzy

HERE'S A NEW IDEA FOR THE US SENATE. 

MAJORITY RULES.

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We Just Had a Class War

And the middle class won.

by Jonathan Chait

November 11, 2012

If there is a single plank in the Democratic platform on which Obama can claim to have won, it is taxing the rich. Obama ignored vast swaths of his agenda, but by God did he hammer home the fact that his winning would bring higher taxes on the rich. (And) polls consistently showed the public was on his side.

Obama’s goal was to prove to the GOP that their rigid defense of the richest one percent was political poison and to force them to bend. More than three fifths (of voters) want to leave Obamacare in place rather than repeal it; a mere 12 percent agree with the Republican position of closing the deficit entirely through spending cuts. 

The harsh truth--that fend-for-yourself economic libertarianism is a worldview mainly confined to the shrinking, aging white electorate--is a reality Republicans prefer not to acknowledge.

American voters had a chance to lay down their marker on the major social divide of our time: whether government can mitigate the skyrocketing inequality generated by the marketplace. For so many years, conservatives have endeavored to fend off such a debate by screaming “class war” at the faintest wisp of populist rhetoric. 

Here it was, right before our eyes: a class war, or the closest thing one might find to one in modern American history, as a presidential election. 

The outcome was plain. The 47 percent turned out to be the 51 percent.

McCain campaign manager says it best

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The Gipper vs. The Doofus

Between 1979 and 2008 (basically the Reagan-Bush years), 36% of all gains in household income went to America's richest 1%. As we moved through those three decades, this obscene disparity actually got worse. By the time George W. Bush was halfway through his second term, the richest 1% of Americans were sucking up a staggering 53% of all income gains in our country. Today, the richest one out of every 10,000 households in America grabs a larger share of our national income than at any other time since we started keeping records--in 1913!

As if that wasn't bad enough, a self-promoting doofus named Grover Norquist has actually convinced enough craven politicians that the wealthiest one percent are also entitled to pay a much lower tax rate on their much higher incomes than the rest of America's working stiffs. And the guy he keeps pointing to in order to justify this absolute insanity is Ronald Reagan.

OK, I didn't vote for The Gipper. And it is true that Reagan believed in lower tax rates for everybody. But he also believed that taxes should be fair. And that whatever the top tax rate (in his time, 28%)--millionaires should pay it.

Today, the top tax rate for bus drivers is 35% while the top rate for millionaires is only 15%.

Reagan thought that was ridiculous---and said so at the time.



Last week--by a 3 million vote margin--America agreed with Reagan (and incidently, Obama). It's time to get this deficit under control. And the first step is to tax wealth at the same rate as work.

We will never start growing the middle class again in this country until the rich (and their political apologists) stop insisting that the highest earners should have the lowest tax rates.

Memo to what's left of the Tea Party: Even Ronald Reagan thought that was a stupid idea.

Jon Stewart: Election results spark meltdown at Fox "News"

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THE PEOPLE HAVE SPOKEN

In their quest for the presidency, Barack Obama and Mitt Romney each spent a billion dollars. They debated each other three times in front of an average audience of 60 million Americans. In the process, they aired sharp differences on several major issues facing the country.

The people listened carefully.

On Tuesday November 6, 2012, Americans delivered their verdict.

They gave President Obama three million more popular votes--and 126 more electoral votes--than Governor Romney. By their votes, the American people settled the following questions:

1) National health care? YES. (Obamacare is here to stay.)

2) Tax cuts for the rich? NO. (Ryan Budget rejected.)

3) Roe v. Wade? YES. (Rape is never "legitimate.")

4) Citizens United? NO. (Most expensive election ever.)

5) Balanced approach to deficit reduction? YES. (Grover Norquist sent packing.)

6) Privatize social security & medicare? NO. (Fix, don't nix.)

7) More women in US Senate? YES. (Number climbs to 20--the highest ever.)

8) More Republicans in congress? NO. (GOP loses 2 seats in Senate, 8 in House.)

9) Bi-partisanship? YES. (Voters applaud Obama-Christie cooperation.)

10) Deregulation? NO. (Voters to top 1%: Greed is NOT good.)

11) Equal pay for equal work? YES. (Voters punish GOP for "war on women.")

12) Self-deportation? NO. (Voters support sensible immigration reform instead.)

Significantly, the proportion of young people voting in 2012 was up from 2008---as was the proportion of African-Americans and Latinos.

President Barack Obama--by virtue of 2 consecutive majority victories in the popular vote--is now the most successful Democratic presidential candidate since Franklin Roosevelt.

For a rare look into the man's soul, I offer you this:

More than fifty years later, still the best description of election day:

From the “Making of the President 1960”  
By Theodore H. White

Chapter 1: WAITING

It was invisible, as always.

They had begun to vote in the villages of New Hampshire at midnight, as they always do, seven and a half hours before the candidate rose. His men had canvassed Hart’s Location in New Hampshire days before, sending his autographed picture to each of the twelve registered voters in the village. They knew that they had five votes certain there, that Nixon had five votes certain—and that two were still undecided. Yet it was worth the effort, for Hart’s Location’s results would be the first flash of news on the wires to greet millions of voters as they opened their morning papers over coffee. But from there on it was unpredictable---invisible.

By the time the candidate left his Boston hotel at 8:30, several million had already voted across the country—in schools, libraries, churches, stores, post offices. These, too, were invisible, but it was certain that at this hour the vote was overwhelmingly Republican. 

On election day America is Republican until five or six in the evening. It is in the last few hours of the day that working people and their families vote, on the way home from work, or after supper; it is then, at evening, that America goes Democratic if it goes Democratic at all. All of this is invisible, for it is the essence of the act that as it happens it is a mystery in which millions of people fit one fragment of the total secret together, none of them knowing the shape of the whole.

What results from the fitting together of these secrets is, of course, the most awesome transfer of power in the world—the power to marshal and mobilize, the power to send men to kill or be killed, the power to tax and destroy, the power to create and the responsibility to do so, the power to guide and the responsibility to heal—all committed into the hands of one man. 

Heroes and philosophers, brave men and vile, have since Rome and Athens tried to make this particular manner of transfer of power work effectively; no people has succeeded at it better, or over a longer period of time than the Americans. Yet as the transfer of this power takes place, there is nothing to be seen except an occasional line outside of a church or school, or a file of people fidgeting in the rain, waiting to enter the booths. 

No bands play on election day, no troops march, no guns are readied, no conspirators gather in secret headquarters. The noise and the blare, the bands and the screaming, the pageantry and oratory of the long fall campaign, fade on election day. 

All the planning is over, all effort spent. 

Now the candidates must wait…

(Out of nearly 69 million votes cast in 1960, Senator John F. Kennedy defeated Vice-President Richard Nixon by only 112,827 votes or 0.16%. Kennedy received 303 electoral votes to Nixon's 219.)

In case you missed this, worth a look

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Tough Choices? Gimme a Break

Everybody says the country is polarized. Really? It seems to me that we're pretty much in agreement on most things:

DEFENSE SPENDING:

*Our troops should be the best trained and best equipped in the world.

*The various branches of our military should not be competing against each other for resources but preparing instead to fight increasingly sophisticated threats to our national security.

*Our allies should be paying their fair share of the cost of defending freedom around the world.

DOMESTIC SPENDING:

*Social Security? Good. But Warren Buffet should have to pay the same percentage of his total income into Social Security as the rest of us. And if the retirement age also has to go up a year or two in order to make the system solvent over time, we’re fine with that.

*Medicare and Medicaid? Also good. But each needs to be run better---and by that we mean cheaper. As far as national health care is concerned, let’s stop fooling around. Requiring businesses to pay for health care is ridiculous. It’s a huge drag on their ability to grow and to create new jobs. Basic health care (just like education) should be the birthright of every US citizen. Smart and healthy citizens make for a stronger and more competitive country. Fear of destitution from illness, on the other hand, makes us less entrepreneurial and less productive. The best thing we can do for this economy is to take the cost of health care off the backs of our job creators, and instead everybody should chip in.

*Education? Don’t get me started. Every kid in America—regardless of income---goes to school. And that’s a good thing. So why stop at high school? If you’re smart enough to cut it, the country needs you to go to college. Period. But let’s face it. Colleges have been jacking up tuitions on the back of government guaranteed student loans for way too long. No college—public or private---should be eligible for any taxpayer funds of any kind (direct or indirect) unless they can prove they have a needs blind admission policy. That is, the kids they accept are allowed to attend---even if their parents can’t afford the full freight. And when colleges complain, the answer is simple. You’re supposed to be smart. Figure it out!

PUBLIC TELEVISION:

*We get a much better bang for the buck from Big Bird, than from Big Oil.

GOVERNMENT REFORM:

*How much longer are we going to put up with Fillabusters in the US Senate? Dump them. Elections are supposed to matter. The majority should rule---especially there.

TAXES:

*Wealth should be taxed at the same rate as work. What’s wrong with that? Why should a hedge fund manager get a tax break we won’t give to a bricklayer? They both put their pants on one leg at time--only the bricklayer’s pants actually get dirty every once in awhile.

*And speaking of taxes, let's pay whatever the top rate was when Bill Clinton was president. Things were pretty good back then. 23 million new jobs and a balance sheet that was in the black. But whatever the top rate is---everybody at the top should pay it. No exceptions.

*Finally, no profitable corporation should ever be able to pay zero taxes. That’s just bullsh*t.

THE FISCAL CLIFF:

*Politicians need to stop driving the government bus while drunk. The Simpson-Bowles approach makes sense. Pay for the laws you pass---or don’t pass them.

*The "chatter class" should stop calling these “tough choices.” A top tax rate at 39.5% instead of 35%? Capping the mortgage interest deduction? Making hedge fund managers pay the same tax rate as hospital workers? What’s so hard about that?

*The only pledge a politician should sign is the “Pledge of Allegiance”--especially the part about Justice for All.

On election day, when the partisan pinheads are through wasting billions of dollars demonizing each other, can we please finally face the obvious truth? Everybody who can count realizes we’re not contributing enough to pay for the programs we all want. 

So the only question left to decide is this:

When it comes to cutting spending compassionately—which must be done; and raising taxes fairly---which also must be done; who do you want making those decisions for you?

If that’s a tough choice, God help us all.