Streams

Opinion: Guess Who Hates Obama's Tax on the Super Rich? The Super Rich

Tuesday, July 10, 2012 - 05:11 PM

President Obama wants to end a decade of the Bush Tax Cuts for the Very Rich. There's some debate about whether $250,000 or $1,000,000 counts as "very" rich, but most people agree that the wealthiest Americans don't need a tax break.

The constituency that largely disagrees: the Super Rich. In their ranks, you can count Mitt Romney's major bundlers, the pro-Romney Super PAC funders and Mitt Romney himself. The Romney campaign has all the makings of an obvious business deal. Invest a little now to save and make a lot more later.

To be fair, not all millionaires decide their politics on their own short-term gains. Groups like Patriotic Millionaires parade successful Americans in front of the camera who want the system to tax them more fairly… which means taxing them more. And Warren Buffett has been so vocal on this matter that an income tax proposal has been named in his honor.

While the Patriotic Millionaires are willing to spend social capital and some of their fortunes on campaign to be taxed more, the less patriotic millionaires are willing to open their wallets wider to ensure their wallets keep getting bigger. And so we have a weekend of Romney wining and dining (and mounting recreational water vehicles in a lovely throwback to Kerry's windsurfing days) in the Hamptons; being feted by the Koch brothers (with protesters outside declaring, "Romney has a Koch Problem); and coming out well ahead of the incumbent Fundraiser-In-Chief in today's campaign filings.

It's hard to outspend people whose excessive fortunes rely on them outspending you.

While the recent buzz in polls and cover stories has been how universally disliked Mitt is, the Super Rich is one constituency he genuinely connects to -- because he's one of them. Multiple Cadillacs, car elevators, friends who own NASCAR and NFL franchises, $10,000 bets… Romney can't help fall into the footsteps of Gordon Gekko and Richie Rich.

His wealth is becoming a campaign sore spot whether he's refusing to clarify his tax returns or dissembling about his offshore bank accounts (not to be confused with the jobs he "offshored"). Even the source of his wealth -- the vulture capitalism of job non-creation -- is working against him. As Paul Krugman noted in the Times, the last Romney to run for president made cars and employed people; his son's business moved money, broke contracts, outsourced jobs and made him a fortune.

Where Romney's money has come from may say something about what experience he'd bring to running the country (or may say more about the experience he doesn't bring), but the source of his fortune shouldn't determine how he gets taxed. Yet, he's taxed considerably lower than a man who makes cars because dividends and other investment profits get taxed at lower levels. That makes no sense to anyone except those benefiting from the loopholes.

Romney's investment payments should be taxed as what it is: income. Even that increase would ensure he was investing back into America a small portion of what he's extracting from it. Then all his income should be taxed at appropriate levels -- ending the Bush Tax Cuts for the Rich (before they become the Obama Tax Give-Away to the Rich) will allow us to pay for programs that strengthen our country.

Unfortunately, it's in Romney's personal and fundraising interests to oppose those sensible policies, and likely it's in his nature. Which is sad. As George Romney, the Kennedys and the Roosevelts proved, you could be wealthy and still believe in policies that helped your fellow Americans. If Romney could shake his billionaire backers and his own sense of entitlement, he could come out for policies that would put him in line with that proud history of leaders and show himself a true Patriotic Millionaire. Then we can get to work on the offshore accounts.

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Comments [2]

listener

Kerry's inherited wealth in 2004, Obama out fundraising his opponents in 2008 or the Martha's Vineyard vaycays of both were not vexing issues for progressives for some reason in elections past.

Apparently Patriotic Millionaires despite their grandstanding still don't know how to write a patriotic personal check to the Treasury Department on their own.
Do the Kerrys, Kennedys, Roosevelts, Pelosi and Patriotic Millionaires prove it is better to be generous with other peoples money while hoarding the moral superiority for themselves which conveniently buys them goodwill from the easily distracted and credulous?

Mitt's money is his business but Obama's five trillion in four years is our business?

Jul. 11 2012 05:06 PM
Jack Jackson from Central New Jersey

How long do we have to put up with our government being run by these 'Have cake and eat it, too' types? As income slides from the middle tier earners - who between income taxes and FICA withholding pay far higher rates than upper tier earners - the government becomes starved for revenue. Is this not clear?

To parry all of the 'half the people pay no income taxes' replies that this opinion is bound to get, please deal with the $6200 the 'average' earner pays into Social Security and MediCare. Half out of their own pocket, half from the employer.

A $250K earner who is at the threshold of the new marginal rate of 39.6%, has already avoided FICA withholding on $140K of earnings. That amounts to $21.4K that the government would have collected.

My suggestions:
1) Cut FICA withholding rates to pre-Greenspan Commission levels.
2) Increase the income cut-offs for FICA withholding. The cut-off is currently at about 2X median income. Let's increase this to 5X or 10X the median.
3) For the self-employed, stop the matching contribution at 3X.
4) Start closing loopholes so that all citizens pay something closer to the published rates.

Jul. 11 2012 09:56 AM

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