Soak the Rich or Soak the Super Rich?

Harry Reid's "millionaire' surcharge" is a new move in the old Democratic game of class warfare.


For Democrats, millionaires are the new Gypsies—a minority whom it is perfectly acceptable to persecute because its wealth is ill-gotten, not the product of hard work.

There is no better evidence of this than the "millionaire surcharge" that Democratic Senate leader Harry Reid of Nevada proposed to pay for President Obama's jobs bill. His version of the bill was defeated last week on a cloture vote, but that in no way suggests Democrats will abandon this rhetoric as the presidential campaign ramps up.

Obama's original funding plan was bad enough. It sought to specifically eliminate tax breaks for disfavored businesses like oil companies and hike taxes on families making over $250,000 a year. But Democratic senators from oil-rich states (such as Louisiana) and from those with lots of sub-millionaires (such as New York) nixed that idea. (Sen. Chuck Schumer hilariously complained that households in New York hauling in $300,000 annually are not rich because they can't afford nice vacations.)

So Reid changed Obama's soak-the-rich scheme into a soak-the-super-rich scheme. His plan would have left everyone else's taxes essentially untouched. But super-rich people faced an additional 5.6 percent tax on every dollar of their unadjusted gross income beyond a million, pumping $450 billion into Uncle Sam's pocket over 10 years.

If Reid had gotten his way, the top marginal tax rates in this country would have hit 50 percent, noted Howard Gleckman of the liberal Tax Policy Center. That's because the new surcharge would have come on top of the 0.9 percent ObamaCare surtax on the rich and the possible rollback of the Bush tax cuts for higher income brackets.

To think the super-rich would passively accept such fleecing is absurd. Millionaires have a mysterious way of vanishing from states that institute such taxes. Maryland imposed a millionaire tax in 2008; a year later, a third of its millionaires disappeared from its tax rolls. After Oregon raised income taxes on the richest 2 percent of its residents in 2009, about one-quarter of rich filers went missing. Ironically, even as Washington considered this tax, states around the country were abolishing similar ones, including New York, New Jersey and Maryland.

It is, of course, much easier for wealthy folks to escape state taxes than national taxes, especially since the United States in 2008 started imposing exit taxes worthy of totalitarian governments on rich Americans trying to leave the country. But if the rich can't flee, they can hire high-priced lawyers to find tax loopholes. They can also stop working and investing before they hit the million-dollar mark—hardly a formula to grow the economy or jobs.

Obama at least felt the need to soft-pedal the soak-the-rich aspects of his plan by trying to spread the tax burden as widely as politically possible. Reid experienced no such compunctions. "In fact, by replacing the potpourri of tax increases, Obama would have used to pay for his stimulus bill with a simple, easy-to-understand millionaire tax, the Senate Democratic leader has done a wonderful job of clarifying his party's message," Gleckman noted sarcastically.

Separating the rich from the poor always involves some arbitrariness. But the Reid tax schema completely dispensed with ordinary understanding, classifying folks earning $999,999 among the middle class subject to ordinary tax treatment while labeling super-rich those earning $1 more.

Why Reid & Co. drew such a bizarre line is obvious. Class warfare has little resonance in a country with rapid income mobility. Indeed, a 2011 Gallup poll found that only 1 percent of Americans mentioned income inequality as the most important problem facing the country.* That's because most Americans expect to move several quintiles up the economic ladder during their lifetimes. Only the rarefied top seems out of reach. Placing people who occupy that spot into a separate political class is the only class-warfare strategy that won't generate widespread opposition.

A soak-the-super-rich agenda needs suitable rhetoric—to which end supporters excavated long-discredited Marxist tropes. A blogger on the Daily Kos recently illustrated this perfectly when he declared the millionaire surcharge a "small down payment to return the wealth to the people" whose wages and benefits CEOs have been "bludgeoning" for a generation.

An unholy nexus between Wall Street and Washington certainly allowed some financial companies to get rich at the expense of taxpayers. However, that hardly describes the vast swath of America's private enterprise. Steve Jobs and Mark Zuckerberg did not rob taxpayers to create multibillion-dollar companies from scratch. But a persecutory mentality, in its zeal to ascribe collective guilt and mete out collective punishment, can't admit such distinctions.

Democrats want to make millionaires the minority that everyone loves to hate. The failure of Reid's bill suggests that their campaign may have stalled. But that doesn't mean we won't be seeing this kind of class-war tactic crop up again in the future.

Reason Foundation Senior Analyst Shikha Dalmia is a columnist at The Daily, where this column originally appeared.

*Editor's Note: This column originally attributed this statistic to the Pew Economic Mobility Project.

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  1. To think the super-rich would passively accept such fleecing is absurd.

    That’s always been the left’s blind spot when honing their ideology: human nature. People aren’t chess pieces you can manipulate at will. Just like “in theory, communism works” so does on paper confiscating more wealth from the “wealthy”. Their policy making failure will always be the failure to factor in very predictable human behavior.

    In this case, it’s not whether it’s fair for them to pay more taxes. It’s that, not only will you not get the revenue from them you seek, you will make things worse for the country as a whole as they go dormant, refusing to participate in a an economy that needs them in order to thrive.

    1. you will make things worse for the country as a whole as they go dormant,

      Which is very much the decision I took two years ago. Getting out of business and taking a wage job lets somebody else deal with the niggling paperwork and endless taxes. There’s room now for someone else to get in there, right? Well they aren’t doing so well.

      Atlas, not so much, but I shrugged.

      1. I was going to start a catering business. No longer. I kept my head down and refused to become one of the greedy business owners.

  2. not only will you not get the revenue from them you seek,

    Even if you succeeded in confiscating every dime of their wealth as well as their income, it would not close the shortfall in Federal budgets.

    “Taxing the rich” is the first step toward the sort of middle-class taxation levels seen in Europe. Once you’ve agreed that “the rich” deserve all the confiscation they can bear, now it’s just a matter of arguing over who counts as “rich”. In other words, we’re not arguing over what you ARE but haggling over the price.

    We’ve already seen the $250 K millionaire, and we will see the $50 K millionaire eventually–after all 50% of American households are getting less than that.

    1. Yep. How can you have a country where at least have of the population pays nothing in at all? If everyone paid something, even if it’s only 1%, then you wouldn’t have policies like this because everyone would have a dog in the fight.

      I just finished my taxes last night (filed an extension) and it took me about 13 straight hours filling out the partnership forms and everything because I’m a self-employed lawyer. I am far from rich but taxes are my biggest single expense. It’s like I’m buying a new Honda Accord every year. What do I get in return for the money I’ve paid in? A new embassy in Baghdad? My effective marginal rate is as much or more than Warren Buffet’s so yeah, I’m pretty pissed.

  3. Here’s my devil’s advocate post for the morning:

    For Democrats, millionaires are the new Gypsies?a minority whom it is perfectly acceptable to persecute because its wealth is ill-gotten, not the product of hard work.

    Given things like TARP, Solyndra and other subsidy systems whether “corrupt” or “honest”, the massive federal purchasing system, professional licensure schemes, regulatory barriers to entry for business, etc. –

    – Is there a tipping point we could reach where we as libertarians calculate that the amount of rent seeking in the economy is finally so great that our default assumption for the wealthy switches? And where we too decide it’s safe to conclude that much wealth is “ill-gotten”?

    Just putting it out there.

    1. Yeah

    2. I could probably look at the multitude of millionaires made rich by their chummy connections to sleazy pols and conclude that the rich are that way because of cronyism rather than ability.

      But, I could never make myself think that the problems of a too powerful government can be solved via more goverment power. Because ultimately, higher taxes give the state more power by allowing it additional avenues for picking winners and losers…which leads back to more cronyism…

      1. Me either.

        But the position of a libertarian-minded person towards the upper class can potentially change quite radically based on the composition of that class.

        What would your view of the French upper class have been in 1788?

        1. That they were assholes whose power to rent-seek supported their shitty class system. So?

          The OWS street nimrods see that problem and have decided the answer is to find some “good aristos” and give them more power if they promise to only guillotine the “bad ones” thereby giving the system even more power to screw everyone. See “Napoleon Bonaparte”.

          1. But, but, but you don’t understand, man!

            The government is us!

            We are the government!

            So when you give power to the government, you’re giving power to The People?, man!

            If you give enough power to the government, then The People? will be able to take what is ours from teh evil rich.

            And stuff, you know?

            1. Good White Indian impression.

              1. No White Indian at all in that post. More than a hint of Tony.


            2. My parents (who define themselves as moderate Democrats) actually said that to me a few months ago. That and accused me of placing property rights above human rights.

              1. My parents actually said that to me a few months ago.

                My father’s the same way. He feels there should be a maximum wage (a 100% tax on income above an arbitrary level) and that every person should be guaranteed a base living wage (from the government taking wealth from teh rich) without going through the effort of earning it.
                Growing up with him I felt that way as well for a long time.
                Since then I have learned to think instead of emote.
                I understand that it’s not a zero sum game, that there’s not some fixed pie out there, that wealth does not come at the expense of the poor, that incentives matter, that today’s poor have it better than the kings of old, and so on and so forth.

                He still feels the same way.

                Oh well.

                1. Yeah, I was a liberal until a few years ago. Then I read Road to Serfdom and Economics in One Lesson. I don’t know how many times I’ve tried to calmly and logically explain my view points to my parents, but they never seem to get it.

                  I know that most universities are still pro-Left but I think it must have been a lot worse back in the 1970’s when my parents when to college. The Marxism seems to have been drilled into their heads so hard they don’t even realize what they are saying is socialist.

                  1. The Marxism seems to have been drilled into their heads so hard they don’t even realize what they are saying is socialist.

                    Even if they did, would it matter? Seriously.

                    My father once said “I believe everyone should be guaranteed a basic standard of living. If that makes me a socialist then I guess I’m a socialist.”

                    I don’t think socialists can be cured from without. It’s like an epiphany that happens from within. I don’t know about you, but nobody cured me of my liberalism. It just happened when I learned about economics and started to really think about it.

                    Incentives matter. Socialism destroys incentives. That’s why it doesn’t work.

                    1. The common answer to this is that the government can just force people to work. At some point it crosses from socialism to communism, but by that point most of the system’s adherents are too invested in it to realize their mistakes.

                  2. “The Marxism seems to have been drilled into their heads so hard they don’t even realize what they are saying is socialist.”

                    People’s opinions ossify as they grow older. Conscription radicalized people too back then. It’s hard for us to imagine a world where segregation was a reality and a young person could be pressed into military service against his will and sent to Vietnam.

                    I was just a little kid back then when the Vietnam War ended in the ’70s, but I remember how radicalized people were. If your parents were in college back in the ’70s, their ideas of freedom may originated as a reaction against the tyrants of the day.

                    And the tyrants had a different aesthetic back then.

              2. That and accused me of placing property rights above human rights.

                I though human rights were a more specific form of property rights; the right to own your self and the product of your own actions.

                1. Yeah, want to reduce a Democrat to spluttering incoherence? Remind them that the difference between “plantation” and “collective” is who gets chained and the Copperhead party hasn’t changed since 1861.

      2. But, I could never make myself think that the problems of a too powerful government can be solved via more goverment power.

        But, but, but if we give more power to the government that is controlled by corporations, it will be able to control the corporations that control it!
        Power to The People?, man!
        Since “we are government” the more power you give to the government, the more power you give to The People?!
        Except that the government is run by the rich, not The People?. It needs more power so that The People? can control it, and through government The People? can control the corporations and rich people!


        1. If the Left wants power to the people, why do they keep giving it to the government?

          1. Because they feel that government is the people and the people are government.

            They feel that the act of voting makes you a part of government.

            If the mafia gave one of them, as a “protection” paying shop owner, a chance to vote for the chief guido, they’d probably start tockin like dis and dat you know? ‘Cuz theyz “made men” and all dat, you know? Deyz voted, and dat makes dem pat of da mafia, you know?

    3. Perhaps, but it still leaves the solution as ending the ability to rent seek, not to make up for the rent seeking on the back end by imposing high taxes that hurt even the honest.

      1. MJ, to end the ability to rent seek you are going to have to take away the vote from anyone subsidized by the government. We used to have something called the “pauper’s oath” that did exactly that.

    4. I’d like to think that libertarians would look at millionaires as individuals and not a class to either adore or vilify. Some got rich by hard work, some got rich by their parent’s or grandparent’s hard work, some got rich off of cronyism, some got rich by fraud, and a very tiny fraction of a percentage got rich by pure blind luck.

      Punish the bad actors if they can be proven as such, and leave everyone else alone.

      1. Punish the bad actors if they can be proven as such

        This. Prosecutions for blatant fraud should be easy pickings. The government would “make money”, and instilling a sense of “fairness” would help satisfy OWS.

        1. Except it isn’t. Stupid != fraudulent. And many of the “banksters” would have paid with their jobs (actually quite a few mid-level ones did) if they hadn’t managed to convince the government to bail them out. While I’m in theoretical favor of criminalizing this behavior it’d never fly because we’d have to jail every lobbiest in the country as well as most farmers, old people, sick people, and everyone who makes less than $25k.

            1. How about criminalizing the behavior of politicians who decide to use public treasuries inappropriately. Malfeasance it’s called.

              1. I have a much stronger word for it, Mr. Burns: Misappropriation!

          1. Stupid != fraudulent.

            Perhaps. But in many cases “Stupid” = criminally negligent.

            1. There wasn’t anything criminally negligent about a lot it.

              Bear Stearns and Lehman buying subprime mortgages out of bankruptcy court–at pennies on the dollar?

              I remember the judge in the New Century (biggest subprime lender) bankruptcy challenging New Century’s attempt to sell their subprime portfolio to Lehman at pennies on the dollar. “How can these homes suddenly be worth just pennies on the dollar?!”, the judge asked.

              He eventually let them go through anyway–and that was the portfolio that did in Lehman! As cheap as they got those mortgages for–the mortgages were only worth a fraction of what they paid for them!

              And that’s what set this whole mess off!

              Hindsight is always 20/20. The bubble is always obviously a bubble in hindsight. The portfolio managers who bought those mortgages were some of the smartest people on the planet–and their participation and pay made them some of the most well incentivized people on the planet.

              Thing is? The future isn’t like hindsight. It’s never 20/20. The people at Lehman who bought those securities had excellent reasons to do what they did. But when you’re dealing with the future, the future can always come up snake-eyes…

              We made things much worse than they would have been despite Lehman and Bear’s failures. I wish the rest of them had just gone like Lehman and Bear! The world economy was scared to death by Lehman and Bear’s demises, but that wasn’t anywhere near as bad as the economic malaise that set in–in no small part because of the government’s reaction to Lehman and Bear.

              Anyway, you can lose all your money investing in your local electric company. I’ve seen that happen to people! The future is uncertain. Just because Lehman and Bear lost all of their money, doesn’t mean they were stupid or criminal.

              That’s the nature of investing.

              And believe me, there’s nothing anyone can do to change that. No amount of regulation will make investments somehow not risky anymore. People pooling their money together to take risks is a big part of where economic growth comes from.

              We need more of that. …and less of the government acting as an insurer against risk.

              1. Remember, there was a year–a whole year!–between the time the subprime lenders cratered (especially New Century) and the time that Lehman went under.

                RIP New Century: March 14, 2007


                RIP Lehman Brothers: September 15, 2008

                Everybody in the world had a whole year to digest the subprime market collapsing–and the world’s best judgement was that it was small setback. If we can buy this for a few pennies on the dollar–and resell the homes in a couple of years? We’re gonna be rich!

                Every entrepreneur in the world had all that time to react. They all had good reasons for what they did. The reason they didn’t the correct thing wasn’t because they weren’t smart or because they were criminal.

                It’s because the future was just as uncertain back then–as it is right now.

                1. Excellent post, Ken. Truly a masterpiece.

              2. I have never really understood why Lehman Bros., Bears and any other investment firm would throw good money after bad. Why would you pay good money, even pennies on the dollar, on bad debts especially mortgages where it is going to take legal action to actually get the properties you just paid for? If it seems to good to be true, it is.

                1. If the government will underwrite the losses by bailing you out, it changes the calculation.

                  Sure, Lehman wasn’t bailed out, but after Long Term Capital Management, ‘everyone’ thought that a larger organization, one as large as Lehman, wouldn’t be permitted to, since they’re ‘Too Big To Fail’.

                  The subsequent years have demonstrated that the belief is correct – a huge bucket of taxpayer cash in one form or other really does mitigate many of the dangers that arise when investment ‘professionals’ make poor decisions.

                2. There’s a right price for everything. They thought they got the right price, something they thought they could turn a profit on, not realizing that the right price for many of these bad mortgages approached zero.

                3. “Why would you pay good money, even pennies on the dollar, on bad debts especially mortgages where it is going to take legal action to actually get the properties you just paid for?”

                  Because the materials in the homes that backed up those mortgages was worth more than mortgages were selling for at face value.

                  Important investing lesson you won’t learn in school: You make or lose your money on the way into an investment–not on the way out!

                  Wal*Mart doesn’t make their money by selling things for more than the market sale price–they make their money by procuring things for less than the market sale price and then pocketing the difference!

                  Lehman and Bear were doing the same thing. You mean I can buy a house–for a fraction of what it costs to build? …the market price is so irrational right now, that it’s pricing these paper mortgages at less than the value of the assets behind them?

                  I can kick the deadbeats out, resell the houses in a couple of years and make a fortune!

                  Doing that deal isn’t irrational.

                  They did not know how many of those mortgages were fraudulent. They did not know that the people in those top tranches were nowhere near as sound as advertised. They did not know that the banks had the paperwork all screwed up–so that evicting all those deadbeats would take four years!

                  Their big mistake wasn’t in buying those mortgages at pennies on the dollar–it was in the leverage.

                  Short version, they bought those mortgages with tons of leverage. Sometimes 30-1. Their risk management was the problem. It wasn’t that they was any kind of moral hazard going on in terms of expecting the government to bail out homeowners–not on Lehman or Bear’s part.

                  The mistake was losing track of how much leverage they had on the table. You ever hear the old saw about “Never try to catch a falling knife”? What do you do when you want to buy some paper that’s lost 98% of its value–but the assets are still valued at more than 50% of their face value. …and then the unthinkable happens? That 2% of paper value left–loses another 98% of its value!

                  You can probably live with that on no leverage! At 30-1 or more?

                  You’re dead in the water.

                  And they paid the ultimate price!

                  Why the government felt it necessary to overreact is the real question we should be asking ourselves. And how we’re gonna undo all the damage Obama did to our economy in his overreaction.

                  If a few more investment banks and regular banks had winked out of existence like Bear, Lehman, Washington Mutual, et. al.? That would have mattered to almost no one who wasn’t an investor in one of those stocks.

                  The best people to suffer those losses–both from a philosophical perspective and a practical economic growth perspective–were the people who willingly put their money at risk.

                  Why Bush and Obama thought squandering the future discretionary income of average Americans was a good idea from an economy perspective–that’s beyond me too.

                  They didn’t want to be accused of not doing anything, and they were scared.

                  Shitty presidents–both of them.

              3. Anyway, you can lose all your money investing in your local electric company.

                The stock price of Arizona Public Service (electric utility) went from $29 per share to about $7 per share. Many people were forced to cash out and lost a ton. I think this was in the 80’s.

                1. It happened a lot during the Gray Davis power debacle in California.

                  Long story short, they deregulated the price utilities had to pay for power, but they didn’t deregulate the price utilities could charge their customers!

                  A bunch of ’em went bust in California. I remember when one utility explained they were gonna have to shut down because they couldn’t afford to pay their employees anymore–Gray Davis threatened to throw their senior management in jail if they did!


                  Anyway, yeah, utilities have been a traditional safe bet for widows and orphans. What are the chances people won’t need to buy any electricity next year?

                  The future’s unpredictable.

                  The U.S. could default on its treasuries next year. If your bank fails, FDIC will give you up to, what is it? $100,000 of your deposits back.

                  But that $100,000 might not be enough to buy a month’s rent two years from now.

                  Some investments are safer than others–no doubt. …but everything is risky. The good news is that with risk comes economic growth. We do not want to discourage Wall Street from taking risks.

                  Taking risks is what built us the railroads, the electricity grid, telecom, the internet, the aviation industry, the pharmaceutical industry–and every other industry that once only existed as a highly speculative investment.

                  Taking a business loan out to expand your business and hire people is a risky investment. Obama is so dumb for trying to discourage banks from taking risks. He just has no idea what he’s doing.

                  He’s still clueless.

          2. Then there is the fact that the government cannot prosecute because if they did it would expose the depth of their crony corruption. I was talking to people who were sympathetic to OWS and a stressed that those protestors had it half right. There is no way that government will sovle this corruption because they only way for the system to have gotten so corrupted was for the government to be in on it.

      2. Punish the bad actors

        I thought we were past the whole Matt Damon thing.

    5. “Is there a tipping point we could reach where we as libertarians calculate that the amount of rent seeking in the economy is finally so great that our default assumption for the wealthy switches?”

      I can’t speak for libertarians everywhere, and as a libertarian, I don’t have to ask other libertarians about what I think.

      But speaking for myself, the answer is “no”. My default assumption about how the future rich will and should obtain their wealth doesn’t change.

      If anything, my assumptions regarding how the wealthy will get their wealth in the future skews even more towards virtue–because obtaining wealth amid a highly regulated economy with public policy that’s entirely hostile to wealth creation is even more difficult.

      Some of this might have to do with differences in people’s personalities and outlooks. I have to admit that when I look at public policy, I don’t tend to see it so much in terms of what it’s going to do to other people I don’t like.

      I think about what it’s doing to me.

      I’m not as absorbed with how public policy hurts people who seek rent–as much as I’m obsessed with how public policy is going to inhibit my ability to get rich.

      I’m like that with most things. When I see public policies that want to go after the rights of pornographers, it isn’t really the rights of pornographers I want to protect. It’s my free expression rights I’m concerned about–I don’t want to see my free expression rights circumscribed by government.

      Wealth creation is the same thing. Other people’s rent seeking doesn’t justify public policies that make it harder for me to pursue happiness get rich.

      And if all the Progressives (and their fellow travelers) on the left need to do to discredit the cause of capitalism in the minds of libertarians–is unfairly use the government to make their cronies unfairly rich?

      Then that’s what they’ll do. I’m not gonna give that away part of the battlefield up for free.

      1. ^This^

  4. Worldwide, everybody in OWS is part of the 1%.

  5. > …millionaires are the new Gypsies
    > ?a minority whom it is perfectly
    > acceptable to persecute…

    The rich are the new poor. Thanks, Shikha!

    1. The question is if the government is treating a classification as an enemy of the larger society.

      You probably would have thought the liquidation of the kulaks was “no big deal”.

      1. You probably would have thought the liquidation of the kulaks was “no big deal”.

        low-low kulak prices are always a big deal.

      2. Got it. The rich are the new kulaks. What a lovely list of victimization metaphors we are compiling! Next!

  6. Gypsies, tramps, and thieves; the people of the town would call us
    Gypsies, tramps, and thieves; and every night the men would come around, and lay their money down.

  7. Those vast numbers making $50K a year are willing to risk that higher taxes on those making $250K will never trickle down to them. Why? Because they have the votes to prevent pols from doing so. But what they don’t count on is the growing, soon to be majority, of voters who pay nothing!
    There is little restraint on these people from continuing to vote higher taxes on everyone else. If we can’t convince the 50K folks on moral grounds, then we better get going with convincing them on pragmatic grounds.
    They are next, but don’t believe it.

  8. It will be $50K in income, but “adjusted” to be treated as $250K by counting “all wealth”, which (in the words of Dave Barry) includes letters from Ed MacMahon saying you may have one $1 million.

  9. For Democrats, millionaires are the new Gypsies Jews ?a minority whom it is perfectly acceptable to persecute because its wealth is ill-gotten, not the product of hard work.


  10. An unholy nexus between Wall Street and Washington certainly allowed some financial companies to get rich at the expense of taxpayers. However, that hardly describes the vast swath of America’s private enterprise. Steve Jobs and Mark Zuckerberg did not rob taxpayers to create multibillion-dollar companies from scratch. But a persecutory mentality, in its zeal to ascribe collective guilt and mete out collective punishment, can’t admit such distinctions.

    They’re using conflating these two things to manipulate the zeitgeist. But per Fluffy’s post, I think (hopefully) we’re still a way off from the majority of top earners being rent seekers, since a lot of small businesses with no individual lobbyists are in the top tax brackets, and almost all businesses are “small”.

    1. Top earners, in this context, being perhaps the top quintile. The tippy-top earners, the so-called 1%, well, that ratio may be getting close to the tipping point.

  11. I’m surprised they aren’t going after the top-wealth holders instead of earners. Just think of all those fat untapped IRAs and 401ks, just waiting to be plucked.

    Of course _that_ would start a real shit storm as the retirees (or soon to be retirees) would start screaming bloody murder. But hey, fair is fair – right?

  12. OT: I was just looking through the Ron Paul budget


    …and one of the charts showing the outstanding public debt says that the Paul plan eliminates the US debt held by the Federal Reserve.

    And I said to myself, “Whoa.”

    Am I reading this wrong, or is everyone reporting on this plan just plain old missing the fact that Paul’s plan cancels outstanding US debt held by the Fed by fiat?

    1. He’s been talking about that for months. Since it’s debt the government really just owes itself, the Fed being a “separate” entity notwithstanding, he says just wipe it from the books. He’s mentioned it in a couple debates already.

  13. Fair!!!!!

    YOU used ROADS!!!!

    1. And the schools that educated the kids and kept them from raping and stealing from you.

      1. And the schools that educated the kids and kept them from raping and stealing from you.

        I’m glad someone recognizes what kids would do with their spare time if it weren’t for school.

  14. classifying folks earning $999,999 among the middle class subject to ordinary tax treatment while labeling super-rich those earning $1 more.

    Again with the $1 more thing? Shikha, you’re a nitwit. Arbitrary numbers are arbitrary.

    1. this whole idea is arbitrary…
      “Everyone, Everyone, look over here at these people! They have lots of money! They don’t need ALL that money! (Crowd ‘Yeah!’) They need to give US some of that money ’cause the Gub’mint needs it! (‘Yeah, the Gub’mint is the people and we needs it!’)
      never mind the fact that the Gub’mint sink hole just keeps growing, but we shouldn’t look at how outta control Gub’mint spending is. we need to focus on where there is untapped funds for further expansion…
      stop letting the media set the agenda and focus on the REAL problem, not some magic trick…

      1. The problem is the idea that all government spending goes to *somebody,* so any cut in government spending is hurting *somebody.* So the solution, in this line of thinking, is to let the spending continue to grow unabated, and then take the money back from the people that democrats disapprove of to fund new spending. Eventually, we have the wise, selfless government functionaries wisely deciding who gets every dollar in the country, which is “Freedom.”

  15. An analogy: Soak the Super Friends.
    Batman’s already hiding in a cave, Wonder Woman could go back to Amazon Island, Superman and Green Lantern head back to space leaving lame-o’s like Aquaman and Green Arrow to defend us.

    1. We’re doomed.

    2. Superman is an illegal alien. Deport him back to the shattered remains of Krypton and let him wait in line line everyone else.

      1. Hermain Cain’s electric fence sure as hell won’t stop him.

        1. Duh, electrified Kyptonite fence.

        2. That’s why Bachmann wants two fences. The second fence will to the trick.

          1. It’s fences all the way down.

            1. We must fence off our entire airspace. Out to 500 miles might do the trick.

              1. C-C-Combo BREAKER

        3. (Sings) Don’t whiz on the electric fence!

      2. are you sure he’s not eligible for some sort of military or civilservice citizenship?

        1. He still entered illegally. Back of line, wait like everybody else.

        2. Demand to see his birth certificate.

          1. It’s in Kryptonian, the same dead language that the Constitution that no one can make heads or tails of was written in. That proves nothing. I’ve seen a lot of fake Kryptonians birth certificates in my day and that looks ‘shopped to me.

            1. and that looks ‘shopped to me

              despite the fact that you can’t see the pixels, owing to the super high resolution of Kryptonian photonic crysytal imaging systems?

              1. I am an expert. I do this for a living.

                1. General Zod, on the other hand, is legal. He got naturalized when he was forcing the president to kneel before him.

                  1. He got naturalized when he was forcing the president to kneel before him.

                    I won’t even ask what the president was doing while he was kneeling.

      3. Nooo nooo, meeser superman no home.

      4. And he’s got weapons of mass destruction! I think he needs a free vacation in Gitmo!

  16. Has Warren Buffett paid the feds the one billion in back taxes he already owes yet?

    1. Trustees and snitches get more privileges than the regular prisoners.

        1. If Michael Moore gets his wish, and the easily-led rabble start committing violence against rich people, will he condone pitchforks and torches at his own house?


  17. Pitiful psychobabble-heavy excuses for the tax code status quo.

    It’s just not convincing enough when you’re turning around and telling retirees we have to obliterate their healthcare, for teh children.

    Adjusted for inflation, wages for everyone but the very wealthiest have been stagnant for 38 years. The richer you are, however, the more you’ve benefited, and it’s in large part the result of favorable tax policy. In a very real way the rich have been getting government handouts on an almost unimaginable scale. But do you proportion your outrage to that scale? No, because rich people are good people because they are rich, and it’s better to err on the side of handouts for them than handouts for icky poor people.

    1. “and it’s in large part the result of favorable tax policy”

      Do you have any evidence for that claim?

      1. Are you confused about whether the rich have been getting richer but nobody else has, or whether historically low tax rates on the rich have coincided with that?

        1. I want evidence for your claim that tax policy has caused the trends in pre-tax wages over the last 38 years.

        2. The thought of raising taxes on rich people makes me moist.

          1. Come into my teepee, Tony. I will teach you the old ways.

          2. And what is “rich?”

            1. That’s a complex question requiring a complex answer, duke. And I refuse to answer it.

    2. I honestly think that you would be hard put to find anybody here who approves of the tax code status quo.

      That doesn’t mean that Reid’s solution is the correct one.

      And as you’ve been told many times, the fact that the government allows someone to keep a fraction of the money they’ve earned doesn’t mean that they’ve gotten a “handout”.

      1. But they did nothing to earn those tax cuts except falsely claim that they would stimulate economic growth. You can’t defend the status quo with a tired old anarchist canard that taxes are theft. We have to have taxes, so that means sometimes they have to go up.

        1. One does not “earn” a tax cut bozo, one earns money for the work one does, oh I forgot, you sincerly believe all money belongs to the government as you have stated multiple times here.

          1. One doesn’t get a civilization for free either.

            1. Speaking of tired anarchistic canards…


        2. I have no problem paying for the cost of the services I get from the government. I don’t think many people here do. I will happily pay my proportionate share for the roads I drive on, the parks I visit, the police protection, the military, etc.

          I do have a problem with paying for the cost of the services that other people get from the government so that those other people get away without paying their proportionate share.

          1. How do you calculate your share of national defense? Government provides collective services, so they’re paid for collectively. The only fair way to do it is so that it doesn’t burden anyone. It’s also hard to quantify the benefit you get from having a stable functioning society that provides you with the opportunity to prosper. That benefit goes overwhelmingly to the already rich. Money is increasingly made in this country not by doing hard work and being productive, but by getting returns on the money you already have. That is an aspect of society the rich should pay more for.

            1. Yes, Tony, we know… we have a mixed economy. Your Team blathers on about that all the time.

              Trouble is, your Team only wants to add more socialism to the mix… never less.

              [insert deity of choice] forbid, we cut spending by even a penny on the dollar, let alone not raise spending.

              1. We’ve tried the alternative for 2 generations. Stagnant income for everyone but the rich. Reagan capitalism is dead. If it’s not, it should be.

                1. You still haven’t provided any evidence that tax policy has caused the trends in pre-tax incomes. Please stop repeating the claim until you can actually back it up.

                  1. I didn’t say anything about pre-tax incomes.

                    1. “Adjusted for inflation, wages for everyone but the very wealthiest have been stagnant for 38 years.”

                      So, by this, you meant to refer to post-tax wages? If you did, then I’d like to see your data that shows post-tax wages have been stagnant for the past 38 years. All of the data on this issue I’ve seen refers to pre-tax wages or incomes.

            2. “How do you calculate your share of national defense?”
              Defense budget/number of US adults that are not legally incompetent.

              1. Prove that, had we not had those tax rates “for two generations”, that the outcome would be what it turned out to be, Tony.

        3. You are *incredibly* disingenuous. And I think you know it. They earned their money. The tax cuts are letting them keep more of that. You’re trying to score some rhetorical points, while adding nothing of substance.

          To summarize:
          Giving someone money – handout
          Not taking someone’s money – not a handout

          1. But taking away someone’s Medicare = taking away a handout?

              1. But Medicare recipients are entitled to that money by legitimate government policy… just like tax cuts. No difference at all except you think rich people earn their money and poor people don’t.

                1. You posted two sentences. Both are false.

                  Government policy saying “This property belongs to Person X” doesn’t have any sort of moral claim. The moral claim to private property exists prior to, and outside of, any governmental recognition of the fact. To say otherwise is legal positivism, and it would entail that everything that the government does is moral and just.

                  Also, the issue is whether or not the person earned their money on the free market (including through charity) or through government taking it from others. How much money they have isn’t really relevant to the problem, or to my values and judgments. I suspect that you already knew that, though, and that you’re attacking straw men once again for cheap rhetorical points. You do know that’s only going to convince other lefties, right?

                  1. The moral claim to private property exists prior to, and outside of, any governmental recognition of the fact.

                    Bullshit. Someone can come along and say God chose him to be king and therefore all property is his by moral right. Keep your religion out of my government, please. Not to say there shouldn’t be a moral underpinning for government action, but with respect to property rights it’s entitlement all the way down. Without law and order it’s just finders keepers and who has the biggest arsenal to defend it.

                    You don’t get rich in this world without a functioning society to support you. The people claiming that they are entitled to the civilization their parents paid for, but they don’t have to pay anything back, are the ones looking for handouts. A healthcare safety net is every much a part of that social structure as highways and schools. Or are you gonna tell some entrepreneurial guy that he’s not allowed to become wealthy because he has to spend all his time and money caring for his sick parent?

                    1. Ok hands, enough activism for the day…it is time for my treatment.

                    2. “Not to say there shouldn’t be a moral underpinning for government action, but with respect to property rights it’s entitlement all the way down.”

                      I could make the same, unsupported assertion about anything. “With whom the government kills it’s entitlement all the way down.” See? Both theft and murder are wrong, regardless of what the government says, or whether or not it’s the government doing it.

                      “Without law and order it’s just finders keepers and who has the biggest arsenal to defend it.”

                      My comments above apply here, too. You’re conflating the government enforcement of rights with the actual existence of those rights. If the two are the same, it’s might makes right, and not just regarding attacking groups you don’t like.

                      Having benefited from “society” doesn’t give “society” the right to take anything it wants from you. If that principle were true, then your parents would completely own you, until the day you or they died.

                      Highways are arguably a common resource. Schools, much less so. “A healthcare safety net?” Not at all. Those are called “public goods.” Not the same as “common goods.” They benefit only some individuals, and those people have no right to charge others for their expenses.

                      You’re pretending like (rich) people draw these big benefits from this amorphous blob called “society,” when it’s actually from particular individuals – parents, colleagues, customers, etc. Therefore, you think, they owe money back to “society.” Except now, “society” is actually a bunch of randoms who have never helped these rich people, and who don’t really affect the rich’s success. I guess “society” is a convenient little moniker, huh?

                      Also, responding to a point you’ve made numerous times; any claim that the government, or any person, *should* do something is ultimately a moral claim.

                    3. Tony, the argument that people owe everything they have to society is true in some senses and not in others. You are using the untrue sense.

                      It’s like someone comes into your house, makes you drop to your knees, and puts a gun to your head. He is going to kill you. But all of a sudden, he decides not to. You walk away. He says that you now owe everything you have to him, your life, your time, everything that surrounds you and belongs to you after the moment that he put his gun to your head and did not shoot you. It’s true you would not have any time, any mind, any belongings had he killed you. So in one METAPHORICAL sense, you “owe” him your life. In an actual sense–“owe” in the sense of money, debt, taxes, and things that can be given in return for services rendered or money lended in the past–you don’t “owe” him shit. You’re extending the first metaphorical concept of “owe” to a literal interpretation where all people owe everything to a single benefactor, the government. The problem with that idea, additionally, is that there is no single benefactor for any one state of the world, just as there is no single “cause” for any event. The government isn’t responsible for civilization. People who desire to behave in a civilized manner are. Do we then owe everything we have to everybody? Perhaps we should divide all assets equally? This isn’t necessary. Everybody benefits equally from civilization and has equal opportunity to make of that what they will. Money, and the fact that some people have more, is not the primary reason for having a civilization. Safety is. You’re attacking a fringe benefit.

                    4. “Keep your religion out of my government, please.”

                      Okay… keep YOURS out MY government.

        4. I was under the impression that the recession would have been much worse had it not been for their stimulating effect…

    3. A tax cut is not a government handout, until you can show the fact that a rich person pays less for using a road or a policeman (when the opposite is true), you are talking pure shit.

      1. Government policy changes resulted in a windfall for a group of people. If that’s not a handout I don’t know what is. The tax cuts were sold as stimulative. That was a mistake or a lie. The burden of proof should be squarely on anyone wanting to maintain the tax status quo.

        Lets see how much the Bush tax cuts cost us.

        That’s $11.6 million per hour, enough to cover the Social Security shortfall over the next 75 years.

        These are not statistics that you can just dismiss with a glib appeal to quasi-leftist grievance language applied to the least vulnerable.

        1. “Tax expenditures” is a phrase even Orwell couldn’t have foreseen.

        2. A tax cut is not a handout, if government can’t budget properly blame the government on bad planning. Don’t blame a person who gets to keep more of his OWN money as opposed to people who get money for doing nothing.

          1. I’ll see your “cost” link and raise you this, Tony:


            Defend THAT, Sparky.

          2. By budget properly you mean it has to stick with the revenues coming in with current tax rates, even if they’re the lowest in generations? What’s so special about current tax rates?

            1. What’s so special about 34% versus 39.6%?

              1. That’s my question.

                1. Actually, I was asking you why a nickel on the dollar is so fucking important to you and your Team, Tony.

        3. As usual, you completely fail to understand the problem. The issue isn’t about taking additional revenue from those that can afford it, it’s about the government spending far more than it takes in no matter how much that is or where it comes from.

          1. The Faithful of the Church of Keynes don’t buy that argument, ##.

            1. Keynes was a GOD.

              1. I meant “IS” God.

    4. 38 years says Tony? That would mean that stagnation began in 1973. However, taxes on the wealthy weren’t cut until 1981. A cause has to precede an effect, so what preceded the stagnation?

      The true culprit behind stagnation is inflation. Specifically the inflation following Nixon’s abandonment of Bretton Woods. This has led to a pretty much exponential increase in the CPI.

      The wealthy tend to benefit the most in inflationary environments, because inflation caused the price of their assets to continually rise. The poor are hurt the most because they lack assets and instead depend on cash. Cash which is consistently losing it’s value and forcing them into debt.

      1. There’s probably something to this. I think changes in the world economy, particularly low-skill low-wage labor competition from developing countries, has also pushed down wages for Americans in low-skill jobs. High-skill jobs don’t face that competition and in fact demand for people that can fill those jobs has increased, so that has helped their wages. I don’t see much evidence that tax policy has much to do with it. And notice that Tony has still not produced any evidence on that point.

  18. Alas, Reid’s plan will appeal to the many economic illiterates who believe that wealth is “distributed” from a pre-existing communal pile.

  19. It doesn’t matter what Reid or Obama say about them, as long as they keep hammering away about “the rich,” they’re reinforcing a collective agenda, whereby scores of individuals can be written off. I find this troubling, to say the least.

  20. This analogy only works if gypsies were being persecuted by other gypsies. Obama is in the 1%. Imagine if, instead of killing Jews, Adolf Hitler imposed a surtax on short mustaches.j

  21. What is “their fair share”?

    Numbers, please.

    C’mon, Team Blue, this ain’t rocket surgery.


    2. Around 70%. Nobody earned hundreds of millions of dollars. If someone is making that much, there is something wrong with the system itself.

      Did you hear about how corporations raided pension funds and turned them into profit centers? Which is to say, they took workers’ pensions and gave them to CEOs through various complicated loopholes.

      1. WRT the first paragraph, if you’re going to make a comprehensive, unqualified statement like that, you’re going to need some evidence, along with a tight argument. One which shows that: there’s a max. that one can truly *earn*; that it’s in the ballpark of hundreds of millions of dollars; and that a roughly 70% tax on that money would be taking off only that excess, leaving the amount that Richie Rich actually did earn.

        Pointing out some instances where *some* companies did something bad with pensions doesn’t cut it. Also, not saying it didn’t happen, but citations for that second paragraph would be nice, too.

      2. FINALLY, you put a percentage sign after a number – and, of course, the number you picked is completely arbitrary and, probably, not as high as you’d REALLY like it to be.

        So… is this seventy cents on EVERY dollar? I suspect it is.

    3. “Fair share” comes from the same dictionary as “common sense” gun laws.

  22. I guess this is class warfare:

    The problem with the super rich is that they all got there with government help. Why would a libertarian or Libertarian defend that?

    Governments are created to protect the ruling classes and their wealth. It’s not class warfare, it’s government warfare.

    1. Governments are created to protect the ruling classes and their wealth.

      I think there’s something to this. The first governments would have been strongmen and warlords who’t primary objective would have been to protect and increase their own wealth and power. I think this was actually the norm for a long time. Such exist today, too. To what degree this applies to more ‘democratic’ governments is a legitimate question.

  23. When the 16th Amendment was first passed, it only applied to the very wealthiest Americans. The vast, vast majority of Americans paid no federal income tax whatsoever. In keeping with the “original intent” of the “framers” of this part of the Constitution, I think the millionares should pay 100% of the federal income tax, and people with less money should pay none at all. We already pay enough in property taxes, sales taxes, excise taxes, state income taxes, and such. Such a regime would yield a hell of a lot less revenue overall, but that’s what Libertarians want — smaller revenue for smaller government.. right? Right everybody?

    [crickets chirping]

    1. Yes, and in 1915 federal revenue was only 1.5% of GDP with the income tax contributing barely a tenth of that. I think everyone here would happily return to those federal revenue levels. You’d clearly support that, right?
      [crickets chirping]

      1. I wonder what the marginal rate would have to be to get 1.5% of GDP from millionares alone.

        (Also, I doubt most people here would want the 1915 import-tax regime, which is the reason income tax was such a small share of federal revenue. “Free Trade” deals mean the government’s revenue has to come from somewhere else.)

        1. This is pretty back-of-the-envelope, but in 2009 total federal revenue was 17.7% of GDP. 45% of revenue came from personal income taxes, so 7.965% of GDP. The top 1%, which is those earning over $380,354 paid 38% of income taxes (I haven’t seen data that breaks it down further), so 3.02% of GDP. So you could tax incomes of only those making $380,354 and up at half current rates, and get rid of every single other federal tax, and still get same federal revenue as percent of GDP as in 1915.

          1. what’s not to love?

            1. I’d certainly take that deal. You’d have to tweak the sudden taxation of dollars less than $380,384 once one hits that level of income to avoid massive distortions. But otherwise, sure.

  24. There is no way the banks didn’t see the inflated bubble coming they also knew that they could use the collapse to their advantage. It was a calculated plan; first take all the toxic loans, bundle them together, disguise them as AAA investments sell them on wall street. Those toxic loans will cause wall street to crash, and the investors will take the hit. now the banks use total US economic failure as threat to lobby for a tax payer bailout. That bailout money was used to scoop up all the remaining assets among the ruble of the crises and give shameful bonuses for their deception. According to the New York Attorney General’s office, “nine of the financial firms that were among the largest recipients of federal bailout money paid about 5,000 of their traders and bankers bonuses of more than $1 million apiece for 2008.” before the recession the six biggest banks in the country held assets equal to about 17 percent of the country’s Gross Domestic Product. Now their assets equal 63 percent of GDP. seeing the way that this crises settling out it seems only proper to tax the shit out of those who fucked us. looking at where the banks stand now it is clear that when the largest banks saw the bubble expanding to critical mass they chose rather than try to rectify the problem they would use the crises to their advantage. why is it surprising that low income people want a part of the American dream and will take great risk to get there. With “PROPER REGULATION” both sides would have been restrained. Ultimately the privatization of profits and the socialization of loses was a criminal act, if we can’t prosecute (or are unwilling to) those responsible, than taxing that money back must be done just for the sake of JUSTICE.

    1. It was a calculated plan

      I suppose it would not occur to you that some bankers just weren’t that bright and screwed up. It necessarily *has* to be a conspiracy.

      1. It’s not a screw up when you end up on top.
        funny what if those same banks were to right now loan out money with the same reckless abandon as they did selling mortgages?

  25. (Sen. Chuck Schumer hilariously complained that households in New York hauling in $300,000 annually are not rich because they can’t afford nice vacations.)

    Maybe we should tax vacations, then.

    1. Don’t give ’em ideas. Those Team Blue fuckers love to create new taxes for no good purpose – e.g., tanning-bed tax.

  26. One thing I’ve noted a long time ago was that if you have money, you can live just about anywhere in comfort. If you are taxed too much in one country, it is very simple to take off to another country. Most people don’t have this option. The ‘super-rich’ do.

  27. “A healthcare safety net is every much a part of that social structure as highways and schools.”

    Okay… where does it stop, though?

  28. Re-hash that tired old propaganda!
    No one will ever notice, eh?

    Hard to take you seriously
    b/c Obama and the Dems are also beholden to the wealthy.

  29. Why not skip all this talk of crushing the rich and instead get the economy back on track by:
    – massive tax cuts
    – massive spending cuts to every government program and agency with many to be eliminated
    – open all drilling in the US. Build new nuclear plants.
    – close the border with Mexico
    – draw down the wars
    When you have an economy that is humming, you have massive revenue coming in since everyone is working. Then, you don’t have to run around finding people to punish by taking their wealth.

  30. “For Democrats, millionaires are the new Gypsies?a minority whom it is perfectly acceptable to persecute because its wealth is ill-gotten, not the product of hard work.”

    You misspelled Jews.

    Just to be bluntly clear: I’m attributing anti-Semitism to the Democrats, not endorsing it myself.

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