Streams

New Rep. Bob Turner Talks Capital Gains, Obama Plan

Monday, September 19, 2011

Representative-elect Bob Turner (Kathleen Horan/WNYC)

Welcome to Politics Bites, where every afternoon at It's A Free Country, we bring you the unmissable quotes from the morning's political conversations on WNYC. Today on the Brian Lehrer Show, newly-elected congressman Bob Turner (NY-9) discussed his election victory and his agenda in Washington, including his thoughts on President Obama's jobs bill.

Capital pains

All through the debt debates, Democrats have suggested raising the tax rate on capital gains—profit from investing, or "money made from money," as billionaire Warren Buffet put it last month, when he suggested that CEOs like himself be taxed at the same rate as the janitors who clean their offices.

Just as President Obama delivers a new jobs and deficit reduction strategy that includes such changes to the tax code, the House of Representatives welcomes a new Republican: Bob Turner, who replaced Democrat Anthony Weiner in a special election last week. Turner is a first-time legislator, but like the rest of the GOP's rank and file on Capitol Hill, he's cold on the President's proposals; higher rates mean fewer jobs.

The operative word here is both 'risk' and 'investment.' Capital gains taxes are low in order to encourage money to pour into new projects and ventures; these create jobs, they create wealth, and ultimately more revenues. When Mr. Buffet says he ought to pay more, I think that would only discourage capital from going into these areas.

Turner suggested billionaires like Warren Buffet should write the government a check for the difference between what he's made to pay, and what he thinks he ought to pay.

Does Obama's plan have a shot?

Turner's election marks one more Republican and one less Democrat in the House—presumably, one more "no" vote for any of Obama's deficit reduction schemes. Brian Lehrer asked Rep. Turner plainly: Does President Obama's plan have any chance of passing? Turner didn't give a flat-out denial.

There are parts of this bill we all can agree with, other parts that I'm not sure have a great chance of passing or really stimulating jobs and job growth. But I would credit the President with starting the process.

Pushing back on taxes

Despite efforts to steer the conversation in other directions, talk of taxes dominated. Callers and internet commentators dogged Turner, questioning the wisdom and fairness of the current tax structure.

One wondered why taking a job as a construction worker wasn't considered both a "risk" and "investment", to use Turner's own words when he described what shielded capital gains from higher tax rates. Any job is both a risk and an investment, the caller said, so what made income from capital gains any different?

In the comments section at It's a Free Country, one person asked, "If lower capital gains rates incentivize certain people to create jobs, why aren't they creating jobs NOW?" Turner could only reply that he subscribed to the Milton Friedman/Chicago school of economics.

It works. There are ups and downs. We are in a down cycle, but I think capital incentives work and they will continue to work.

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Bob Turner

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Comments [61]

Bob from Connecticut

Congressman Turner likes to say that people who pay tax on capital realize gains deserve a better tax rate than people who are paid for work because that kind of tax structure encourages capital to be invested in ventures that create jobs. The fallacy in that argument is that all invested capital does the same thing, namely make it possible for businesses to exist and employ people. The flaw is that even gains from capital passively invested in securities is taxed at beneficial rates and does nothing to create jobs.

Sep. 20 2011 04:22 PM
richard sloat

I am a senor who has been investing since I was a teenager. I have made a lot of money paying only 15% for long time capital gains but I believe in the Buffet principal. Most long term capital gains have not created jobs as Representative Turner claims. Long term gains can be made on collectables, commodities, real estate, and stock issued many years ago. If I sell an Old master Artwork, an once of gold, a plot of land, ATT stock issued years ago where is the job creation??? Representative Turner was also wrong about Bonds. They are less risky than stock but do have risk as we see in Europe now. Why are dividends only taxed at 15% when a CD or Bond interest is fully taxed. Bonds and a Bank Cd are also used to grow a company or lend money to grow the economy. I would lose money if these tax breaks were eliminated but it would be fair!!!

Sep. 19 2011 04:22 PM
jawbone

FYI, Rep. Turner:

Businesses are in business to make profits, not as charities. Businesses that have expenses higher than their competitors don't remain businesses for long, their competitors drive them out of business. And thus every business I've ever worked for has been obsessed with reducing payroll to the smallest amount needed in order to fulfill demand. It doesn't matter whether you're talking about a pizza shop or a manufacturing business or a cable service, the only thing that'll make the business hire is if there's more demand for their services than they can fulfill with the current workforce.

In other words, *CUSTOMERS* are the job creators. Any attempt at creating jobs has to put money into the hands of *customers*, not into the hands of *business*, which will just stash it away if there's no demand for their products because of a lack of customers.

As in, if there's little or no DEMAND, businesses will not hire additional workers and will actually lay off/downsize existing workers. Then there's less DEMAND, and the not so virtuous circle continues.

Or would that be better expressed as the non-virtuous spiral continues downward for the economy.

At that point, government is the only entity capable of speeding up recovery by providing JOBS JOBS JOBS for the growing number of unemployed.

Just sayin', Rep. Turner.

Sep. 19 2011 03:13 PM

If you ddn't like what you were hearing come out of the Congressman's mouth - his view on what the return for risking one's capital should be - please help me understand why there were only sixty-thousand votes cast in that special election? Where were the rest of you? Didn't you think it mattered?

Sep. 19 2011 12:58 PM
jawbone

The risk of a mere worker's life pales in comparison to the risk of financial capital for Rep. Turner. That was the import of Turner's almost passionate (for him, so far) defense of those with enough wealth to have actual "capital."

Human lives vs. money? Money wins, hands down. Money is power. Humans only have power in organized large numbers. And it's so easy to divide and conquer. As Buffet has said, there was a class war, and his class has WON.

Oh, my.

Just another Republican in favor of cheap DISPOSABLE labor (read working human beings). Money, money, money -- it's a rich man's game.

And, in recent years, alas, many Democratis fall into this corporatism as well.

We the non-wealthy need a party to represent us, all of us 95 Percenters (and the 96-98 Percenters would actually benefit from government which cares about the well-being of all our people).

Sep. 19 2011 10:59 AM
Glork from Glen Ridge, NJ

I may not be from New York, but Mr. Turner's remarks were hardly confidence-inspiring. BTW, WNYC- if you do not cover the Wall Street protests pronto, you LOST. Big time.

Sep. 19 2011 10:56 AM

Pinochet is the poster boy of UoC economics!

Sep. 19 2011 10:56 AM

Here is a good illustration of how well UoC economics has worked in Israel!!

http://www.kibush.co.il/show_file.asp?num=23912

SHort-sighted 9th District - You get what you pay for!!

Sep. 19 2011 10:50 AM

Zionists - this is what you get!!

Good job!

Sep. 19 2011 10:44 AM

RUCB_Alum is on to something!!

Sep. 19 2011 10:42 AM

RISK!?!?!?!?

Really!!!

HOW MUCH RISK IS THERE WHEN THERE ARE BILLIONS (NEARLY TRILLIONS) WAITING TO BAIL YOU OUT!!!!

WHAT THE F* ARE YOU TALKING ABOUT?!?!

WHAT RISK???!!!??

Sep. 19 2011 10:39 AM

Soooo...that was interesting. I guess this was a case where a 'generic' Republican would beat the Democrat - after Weiner's crass exhibitionism and lying were revealed. Too bad there is no such thing as a 'generic' Republican... What we have is stealth Republicans who don't show their true nature until AFTER an election. Too bad the media (this means you, WNYC) of letting Mr. Turner get away with hiding his agenda. You are not alone in your failing....I'll bet there are many Wisconsins who wonder how the heck Walker got elected....or Scott Brown in MA....or even just the GOP in 2010 in general. By focusing on 'the contest' and teaching little about their actual positions, journalists are allowing the electorate to be serially misled.

Sep. 19 2011 10:38 AM
Bob from Manhattan

Congressman Turner made a misstatement when he said that capital gain is taxed at 15% and capital loss is just a loss. Actually, capital loss can be offset by earnings, other capital gains and such. Therefore, if I lost 1 million taking "risk", and I gain 1 million taking "risk", I pay not taxes. So, isn't this an example of the government subsidizing investors to "gamble"?

Sep. 19 2011 10:35 AM
Arty from Forest Hills, NY

So now my fellow district voters learn a bitter lesson. Elect a local Republican, you get a national Republican. If you voted for him because of a mosque, or you thought you were supporting Israel, you got taken. He believes that no government regulation is the best idea since pudding, taxing the rich is taxing "job creaters," while payroll taxes are great for workers and terrible for business. If you work hard for a meager living, are threatened with layoffs, salary cuts or loss of benefits and voted for Turner remember that there is no longer a Republican Party or nominee who really cares about you!

Sep. 19 2011 10:34 AM
Nancy from New York

Mr. Turner is clearly unable to make good arguments against the Obama tax change suggestions. I was ready to add my voice (but didn't get through) on the topic of allowing incentives to continue so that the rich would create those wonderful jobs. Well the "job creators" haven't turned around the sliding job market and they've had plenty of opportunity with the current tax code. Why isn't there a huge cry about this? I'm so frustrated that those of us who find this argument specious aren't shouting it out louder, aren't getting the opposing view out there with enough strength, aren't insisting that we get the message to the congress people we've elected - where it really counts to create change.

Sep. 19 2011 10:32 AM

WHY DOESN'T WNYC COVER THE WALL STREET PROTESTS?????

WHY???

Sep. 19 2011 10:32 AM
JC EV from The East Village of Manhattan

I'm always amazed when a GOP-er says those taxed at an effective 15% tax rate need that money because they're potential "job-creators". If that tax structure is sooo favorable for employment, then why do we have massive unemployment now? The so-called "job-creators" have enjoyed this tax structure for many years, and yet the overall trend has been increasing joblessness, not more. Brian, please challenge your guests when they make this assertion -- they say it so casually, as if it were fact, or common sense, when recent history shows the theory to be absurd.

Sep. 19 2011 10:30 AM
james from west new york. nj

Not only are tax rates at historical lows, so are interest rates. There is no better recipe out there now for "job creators." I'm all for keeping tax rates as low as possible and for cutting entitlements to the over-entitled, but the nonsense "job creator" rhetoric needs to stop.

Sep. 19 2011 10:29 AM

May I suggest the DELUDED "Congressperson" read a few FOI documents regarding how well UoC economics works!!

PLEASE GET A CLUE!!!

please.

Sep. 19 2011 10:29 AM
Ann

Bob Turner's comment that the tax increase on the wealthy will be a disincentive to investment was addressed well by Buffett in his NYTimes OpEd piece -- when tax rates were higher in the 90s under Clinton, there was more investment & greater job creation than since Bush lowered the tax rate. I think this is the key rebuttal to what seems to be the Republican's only argument against the tax increase.

Sep. 19 2011 10:29 AM
amalgam from NYC by day, NJ by night

Rep. Turner sure proved that he is conversant with the issues, facts, stats, institutional workings of Congress, etc. What a boon to his district! (tongue in cheek)

Let's just say that district will be going away...

Sep. 19 2011 10:29 AM
ericf

Assuming for the sake of argument that lightly taxed capital gains do work as incentives for job creation, is there any assurance that jobs so created are likely to be domestic jobs or is special tax treatment of capital gains just as likely to stimulate creation of jobs abroad?

Sep. 19 2011 10:27 AM
Fuva18 from Harlemworld

If WNYC doesn't fully cover the Wall Street protest, should it at least say why?

Sep. 19 2011 10:27 AM
Bobby G from East Village

I would like to know how much of capital investment really does create jobs. Hedge Fund and derivative investments sometimes cause a loss of jobs. Warren Buffet just invested a big pile of money in B of A, and they are eliminating 40,000 jobs. Also Mr. Turner in wrong that bonds do not create jobs. Most of the bonds are for public infrastructure projects that are built by people.

Sep. 19 2011 10:26 AM
Sophie from Poughkeepsie, NY

Hey why not get Hayworth AND Turner on together? That would be a doozie!

Sep. 19 2011 10:26 AM

@JMD from Westchester

OMG LOL!!

Genius!

Sep. 19 2011 10:26 AM
The Truth from Becky

LOL...priceless!

Sep. 19 2011 10:25 AM

Friedman, University of Chicago School economics work???

If democracy is not important to you!!

The fine congressman needs to have a look at how Friedman economics have undermined EVERY fledgling democracy in the world, over the last 40 years!!!

This approach has killed millions and demolished economies worldwide

Sep. 19 2011 10:25 AM
Jacob from Brooklyn

"The Chicago school. Yes. It works!"

Good rational argument!

Sep. 19 2011 10:24 AM
CL from NY

The fact that the Democrats couldn't field a candidate able to beat this guy speaks volumes about how poorly organized they are.

Turner is laughable. His reference to the Chicago economists as if they were the final word is ridiculous.

Sep. 19 2011 10:24 AM
Jim from Manhattan

If lower Cap Gains rates are automatically job-inducing why not make them really low and generate a lot of jobs. How about negative rates that pay you for money you earn? Obviously " lower is better" is an absurdity" What is the optimal rate???

Sep. 19 2011 10:24 AM
DarkSymbolist from NYC!

Any segment on the Wall Street protest?

Why is this Tea Party fear-mongering moron on and nothing about the protests? I hope you will rectify this gross oversight, Brian...

This Turner guy stinks at debating his points by the way. How lackluster

Oh, and MrTurner, the name isn't "Obama Care" you dope!

Sep. 19 2011 10:23 AM
Fuva from Harlemworld

Advocacy of the "Buffet Rule" should be accompanied by an anatomization of wealth, to help the masses really understand it, its myriad numerous advantages, how it and free-market-killing economic inequality self-perpetuate, etc. The current problem with this discussion/ debate is that it needs perspective that it is largely lacking.

Sep. 19 2011 10:23 AM

Who's needs to invest if there are no customers with $$ to spend????

His capital risk conversation is moot after 30 years of lowered taxes.

What we have now is lower demand for products & services.

And it is time to cover the Wall ST & other demonstrations that are ongoing across the country.

Sep. 19 2011 10:23 AM
EVC from Bklyn

Congressman Bob Turner did not address the equal 'sacrifice' issue raised by Obama; Mr Turner is a multi-millionaire and those not a disinterested party in terms of higher taxes on the wealthy

Sep. 19 2011 10:23 AM
Peter from New Jersey

What is Risk??

Is there no Risk working for an ENRON or WORLDCOM?? Didn't those employees LOSE their Entire retirement package?

TALK to us about RISK!

Sep. 19 2011 10:23 AM
JT from LI

@hjs11211
NY has definitely given more in taxes as long as I can remember, just as NYC has carried the rest of the state. The Tea Party would never speak against it because their regions would collapse on their own. Typical right wing hypocrisy.

Sep. 19 2011 10:22 AM
Sophie from Poughkeepsie, NY

Ha ha ha! This is PAINFUL!

Sep. 19 2011 10:21 AM
JMD from Westchester

I see why they called it a "special election."

Sep. 19 2011 10:21 AM

I LOVE this caller!!!

Sep. 19 2011 10:20 AM
Nancy from New York

The world has changed so drastically that this argument about taxing investment earnings at a lower rate to encourage investment in higher risk ventures is specious. First of all, look where "risk-taking" got us in the last five years. Second, it's not as if people who earn money as employees are not taking risks -- look at how many people have gotten laid off from "non-risky" jobs.

Sep. 19 2011 10:20 AM
MFAN from Staten Island

I mean, let's abstract this:

[Person who is part of group A]: We want to do X

[Person who is NOT part of group A]: People who are part of group A do not want to do X

THIS IS MADNESS. How do they not get called out on this?????

Sep. 19 2011 10:20 AM
Peter from New Jersey

What is Risk??

Is there no Risk working for an ENRON or WORLDCOM?? Didn't those employees LOSE their Entire retirement package?

TALK to us about RISK!

Sep. 19 2011 10:20 AM
Sheldon from Brooklyn

Based on that horrible "anti-mosque" campaign ad, does Bob Turner - Tea Party activist, Republican ideallogue, really beleive that government should tell people where they should pray, based on their religion?

Sep. 19 2011 10:20 AM
seth in manhattan from manhattan

ask him about hedge funds who convert ordinary income to capital gains to save taxes? no risk taken there

Sep. 19 2011 10:20 AM
Mark Schwentner from Yonkers

The question in capital gains is not with the tax treatment of investment for companies but short term gains on trading which does nothing for job creation. Risk exists for gambling as well. But we dont need to incentivize ie.

Sep. 19 2011 10:19 AM
Jack from NYC

Turner is right! The rich shouldn't be taxed any more! Paris Hilton needs a new jet, Kim Kardashian has jewelry to buy and plastic surgery to contemplate. How are these millionaires supposed to function of we rasie their taxes by 3%? The whole country will collapse!

Sep. 19 2011 10:18 AM
Brian from Hoboken

Many of these "investments with risk" are private equity guys who use mostly leverage (borrowed money-not their own), buy companies, re-organize (lay off workers), borrow money in the company's name to then pay themselves handsomely, and then throw it back on the market through an IPO, often leaving the company saddled with more debt than it had previously. Where is the job creation here? Where is the risk if most of the invested money was borrowed?
Oh by the way this is what Romney did as co-founder of Bain Capital. And he talks about jobs he created?

Sep. 19 2011 10:18 AM

Bring back the penis worshiper!!

Sep. 19 2011 10:18 AM
Phil

If lower capital gains rates incentivize certain people to create jobs, why aren't they creating jobs NOW? Tax rates are at historic lows now. Turner's theory is not being borne out by the facts.

Sep. 19 2011 10:18 AM
Fuva from Harlem

Right ON, Robert from NYC...(There's that theory about the "Liberals" as NOT being the liberals of yesteryear; that the "elite" amongst them have been co-opted, gone "neo"...)...Perhaps WNYC will address this lack of coverage.

Sep. 19 2011 10:17 AM

Mr Magoo, indeed!!

Sep. 19 2011 10:17 AM
MFAN from Staten Island

My whole hope with Warren Buffet (as large of a job creator as you can get) actually having his name attached to this legislation would be that the republicans would not be able to say "this kills jobs". Now that's exactly what Turner is saying! And who is he to say that? WARREN BUFFET KNOWS MORE ABOUT THIS THAN YOU! What's your resume, Turner?

Sep. 19 2011 10:17 AM
dboy from nyc

Geeze!! NYC, we're doomed... DOOMED!!

The 9th district gets what they deserve!

Good job!

Sep. 19 2011 10:16 AM
Raul Rothblatt from Prospect Heights

A question to Mr. Turner: I thought the job of profit was the provide the incentive for business risk. Isn't the market supposed to lead innovation, not the government choosing to pick winners and losers?

Sep. 19 2011 10:16 AM
seth mosler

ask him about hedge funds who convert ordinary incom to capital gains-ask if that is fair!!!!!!

Sep. 19 2011 10:16 AM
Nick from UWS

Oh god....the man's brain operates at 15 mph...from a razor-sharp guy like Anthony Wiener to Mr Magoo.

Sep. 19 2011 10:13 AM

Wow....No wonder Mr.Turner demurred on his WNYC appearances. Not too good at thinking on his feet...or maybe he's just a little tired. Weprin should have debated him to show up the weaknesses.
Sorry NYC, I don't think this guy will serve you well.

Sep. 19 2011 10:11 AM

also how much staff does a congress person need?
how many will turner have?

brian, nothing about the wall street protest?

Sep. 19 2011 09:45 AM

Poor red states get the most socialist aid from the federal government. Can we start cutting the budget there?

http://www.taxfoundation.org/UserFiles/Image/Blog/ftsbs-large.jpg

Sep. 19 2011 09:41 AM
Robert from NYC

How about a segment on the protests going on in Wall Street this weekend and today? Shouldn't NPR support it's supporters who have been affected by the "financial horrors" caused by Wall Street!! What's happened to NPR's social conscience?

Sep. 19 2011 09:34 AM

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