War on the Rich? The bogus GOP claim that Obama is trying to bleed wealthy Americans.

[babylonsister]

http://www.slate.com/id/2213029/

War on the Rich?
The bogus GOP claim that Obama is trying to bleed wealthy Americans.
By Daniel Gross
Posted Thursday, March 5, 2009, at 6:09 PM ET



Illustration by Robert Neubecker.

snip//

Obama's proposals don't mean the government would steal every penny you make above the $250,000 threshold, or that making more than $250,000 would somehow subject all of your income to higher taxes. Rather, you'd pay 36 cents to the government in income taxes on every dollar over the threshold, rather than 33 cents.

Second, this return to 2001's tax rates was actually part of the Bush tax plan. The Republicans who controlled the White House and the Republicans who controlled the Congress earlier this decade decreed that all the tax cuts they passed would sunset in 2010. They put in this sunset provision to hide the long-term fiscal costs of the cuts. The Bush team and congressional supporters had seven years to manage fiscal affairs in such a way that they would be able to extend the tax cuts in 2010. But they screwed it up. Instead of controlling spending and aligning tax revenues with outlays, the Bush administration and its congressional allies ramped up spending massively—on two wars, on a prescription drug benefit for Medicare, on earmarks, etc. Oh, and along the way, they so miserably mismanaged oversight of Wall Street and the financial sector that it required the passage of a hugely expensive bailout. Even before the passage of the TARP, the prospect of extending all the Bush tax cuts was a nonstarter. Once Bush signed the $700 billion bailout measure into law, extending tax cuts was really a nonstarter. The national debt nearly doubled during the Bush years. So if you want to blame someone for raising taxes back to where they were in 2001, don't blame Obama. Blame Bush, his feckless Office of Management and Budget directors, his economic advisers, and congressional appropriators like Trent Lott and Tom DeLay.

Third, we know from recent experience that marginal tax rates of 36 percent and 39 percent aren't wealth killers. I was around in the 1990s, when tax rates were at that level, and when capital gains and dividend taxes were significantly higher than they are today. And I seem to remember that we had a stock market boom, a broad rise in incomes (with the wealthy benefitting handily), and strong economic growth.

Fourth, we also know from recent experience that lower marginal rates on income taxes, and lower rates on capital gains and dividends, aren't necessarily wealth producers. The Bush years, which had lower marginal rates and capital gains taxes, were a fiasco. In fact, if you tally up the vast destruction of wealth in the late Bush years—caused by foolish hedge funds, investment banks, and other financial services companies, it seems like the wealthy have in fact been waging war on one another.

Finally, there has been a near total absence of discussion of what higher rates will mean in the real world. Say you're a CNBC anchor, or a Washington Post columnist with a seat at the Council on Foreign Relations, or a dentist, and you managed to cobble together $350,000 a year in income. You're doing quite well. If you subtract deductions for state and property taxes, mortgage interest and charitable deductions, and other deductions, the amount on which tax rates are calculated might total $300,000. What would happen if the marginal rate on the portion of your income above $250,000 were to rise from 33 percent to 36 percent? Under the old regime, you'd pay $16,500 in federal taxes on that amount. Under the new one, you'd pay $18,000. The difference is $1,500 per year, or $4.10 per day. Obviously, the numbers rise as you make more. But is $4.10 a day bleeding the rich, a war on the wealthy, a killer of innovation and enterprise? That dentist eager to slash her income from $320,000 to $250,000 would avoid the pain of paying an extra $2,100 in federal taxes. But she'd also deprive herself of an additional $70,000 in income!

Can she, or we, really be that stupid?

[FiveGoodMen]

1. Obama's not waging war on the rich, but it's about damn time we did.

[Ikonoklast]

2. One less Starbucks latte a day.

I weep for them.

[bemildred]

3. War on the rich sounds good to me.

They have been making war on me all of my life.

[wackywaggin]

4. Wholeheartidly agree!!

[LSparkle]

6. Exactly! All we're doing is joining the battle that's been on for 30 years

[Paranoid Pessimist]

5. Would that he would n/t

[vinylsolution]

7. The rich have bled America dry....

... over the last 30 years. Reaganomics really was the biggest Ponzi scheme of all time.

The millionaire media only starts talking about 'class war' when We The People want our fair share of the pie.

It's about time our President acted in the interests of the many, rather than the few.

[HillWilliam]

8. Thirty years they've been pissing in our Wheaties

and they thought they'd get a free ride forever?

My heart pumps piss for them.

Light the torches and sharpen the pitchforks.

[babylonsister]

9. Whoa. Angry, are you? Let's try to be logical? I hope? nt

[HillWilliam]

10. A mere frisson, Sis

I do have my moments, I'll admit. I've been alternately muttering and railing about the shell-game being played on the middle class since the Raygun days. Ultimately, my passive-resistant nature takes over and I become a rock in their way. The best part of DU is being able to get the rantiness (is that a word??) out of my system.