Corporate media mouthpieces have been quick to deride Warren Buffett for his call to stop coddling the mega-rich.
Michael Smyth, perhaps trying to protect his tenure at the top dog, lifted his leg to smear the billionaire, “who’s kind of an old man” who’s “got billions and billions and billions of dollars.“
Smyth said it was an easy call for Buffett to say go ahead and tax the rich. Then he lobbed this one to his guest,
How do you define the rich anyway. Is it six figures? Someone making 200 grand, is that considered super-rich?
Actually, that was puffball service for David Logan, Smyth’s guest on the NW morning show. Logan was there to politely sneer at and contradict Buffett. He even implied the philanthropist is evading income tax by giving his entire fortune to charity. More later about Mr. Logan and why he might have been invited to appear with Smyth.
Had he paid closer attention to Buffett’s argument, Smyth would have known the exact definition he used for super-rich; it was not an income of $100 grand or $200 grand. No person, even Smyth, truly thinks that level of earnings qualifies a person as super-rich.
What Warren Buffet did write is,
you need to examine the sources of government revenue. Last year about 80 percent of these revenues came from personal income taxes and payroll taxes. The mega-rich pay income taxes at a rate of 15 percent on most of their earnings but pay practically nothing in payroll taxes. It’s a different story for the middle class: typically, they fall into the 15 percent and 25 percent income tax brackets, and then are hit with heavy payroll taxes to boot.
The whole point of Buffet’s solution was not to hit the middle classes, the patriots who are carrying real burdens. His suggestion is to increase payments of the wealthiest 0.3% of taxpayers.
But for those making more than $1 million — there were 236,883 such households in 2009—I would raise rates immediately on taxable income in excess of $1 million, including, of course, dividends and capital gains. And for those who make $10 million or more—there were 8,274 in 2009—I would suggest an additional increase in rate.
As I indicated above, we should pay attention to the origins of Smyth’s guest David Logan. He works for Washington DC based The Tax Foundation, the head of which is David Lewis, VP and Treasurer of Eli Lilly. The giant manufacturer of Prozac and other pharmaceuticals was one of the companies that asked President Obama for a tax holiday that would help them tap more than $1 trillion of offshore earnings, much of it sitting in island tax havens.
Sophisticated U.S. companies are routinely repatriating hundreds of billions of dollars in foreign earnings and paying trivially small U.S. taxes on those repatriations,” said Edward D. Kleinbard, a law professor at the University of Southern California in Los Angeles. “They devote enormous resources first to moving income to tax havens, and then to bringing those profits back to the U.S. at the lowest possible tax cost.
Other Directors of the Tax Foundation have been provided by Tea Party funders Koch Industries, Exxon Mobil and other mega-corporations who park earnings offshore. CKNW choosing David Logan out of all the unfettered academic economists they could have selected shows the purpose was not information reporting, it was marketing the corporatist point of view. Maybe Smyth’s program producer wandered down the hall and asked Michael Campbell for the name of a reliable person to invite.
By the way, William Gale, senior fellow, Tax Policy Center of the Brookings Institution, a non-partisan group that takes positions across the left-right political spectrum provided an Op-Ed to CNN, Buffett is right: Raise taxes on the wealthy. Gale adds interesting points to the debate:
…raising taxes to pay for current spending has proved more effective at restraining spending than allowing the government to finance its outlays with deficits. . . The only time in the past 30 years when spending fell was in the 1990s, under President Bill Clinton, when taxes were also raised.
…There are, of course, better and worse ways to raise taxes. A general goal would be to broaden the tax base — reduce the use of specialized credits, deductions, loopholes and so on — and minimize the extent to which tax rates need to rise.