Yesterday the Senate had the opportunity to break the Republican filibuster of S. 2230, enacting the “Buffett Rule,” and appointed Senator Dean Heller (R-NV) voted with 44 other Republicans in the upper house to sustain that filibuster. Proponents gathered 51 of the required 60 votes to break the logjam. [roll call 65]
The Congressional Research Service summarized what S. 2230 would have done, or might do, if the GOP filibuster could ever be broken:
“Paying a Fair Share Act of 2012 – Amends the Internal Revenue Code to require an individual taxpayer whose adjusted gross income exceeds $1 million to pay a minimum tax rate of 30% of the excess of the taxpayer’s adjusted gross income over the taxpayer’s modified charitable contribution deduction for the taxable year (tentative fair share tax). Establishes the amount of such tax as the excess (if any) of the tentative fair share tax over the excess of: (1) the sum of the taxpayer’s regular tax liability, the alternative minimum tax (AMT) amount, and the payroll tax for the taxable year; over (2) certain tax credits. Provides for a phase-in of such tax. Requires an inflation adjustment to the $1 million income threshold for taxable years beginning after 2013.
Expresses the sense of the Senate that Congress should enact tax reform that repeals unfair and unnecessary tax loopholes and expenditures, simplifies the tax system, and makes sure that the wealthiest taxpayers pay a fair share of taxes.”
OK, it wasn’t going to be a major revenue raiser for the federal treasury. However, it is yet another example of the fundamental divide between Democratic and Republican definitions of “fairness.”
By Republican lights “fairness” comes when everyone is paying the same rate. This is only “fair” for those who are already blessed with wealth and health. Exacting 25% from the coffers of a person earning $1,000,000 per year would yield $250,000. Leaving the individual with earnings of $750,000. Not bad for an annual salary. Exacting the same 25% from a person earning $50,000 annually yields $12,500; leaving the family with an annual income of $37,500 after federal taxes, a number well below the median income in Nevada.
The Republican schemes for a Flat Tax are also highly questionable because they conveniently avoid the discussion of other taxes the 99% do pay, especially payroll taxes. Payments to the Social Security Trust Funds are capped at $106,800 meaning that any income earned above that level is not subject to that taxation. Thus our millionaires and billionaires get a double dip. They are taxed at a lesser rate for capital gains than the rate for the wages of a regular working stiff, AND they don’t have to pay SSTF taxes on any income above the cap. Nice.
Senator Heller would evidently like to keep the current system in place, and denigrated S. 2230 as an election year “gimmick.”
“While Nevada struggles with high unemployment, the President and Senate Democrats have chosen to focus on a measure that will not create a single job. They have ignored rising gas prices, have not passed a budget in more than three years, and shoved job-killing government health care on small businesses across the country. Now, the best they can do is push a tax hike designed for nothing more than a campaign press release. It’s no wonder the American people are so frustrated with Washington. There is no question the tax code is unfair and needs an overhaul, but the so-called ‘Buffett Rule’ is nothing more than an election year campaign gimmick,” said Senator Dean Heller.” [Heller]
What we have here really isn’t a commentary, nor any analysis of the provisions of S. 2230, it’s a campaign year focus-group talking point word salad with a light dressing of distraction politics.
The first message from Senator Heller seems to be that “we Republicans only want to vote on Jobs Bills.” Which raises the immediate question: If you wanted to vote on a Jobs Bill why did you block the American Jobs Act in October 2011? “The jobs package includes $250 billion in tax cuts, including reduced payroll taxes on both workers and employers; $60 billion in extended unemployment benefits; and $140 billion in spending on education, transportation projects and public workers, including police officers.” [CBS] Oh, now we ought to recall that to help pay for the bill there was a 5.6% surtax on millionaires. Senator Heller voted to sustain the GOP filibuster on that bill too. [roll call 160]
“They have ignored rising gas prices, have not passed a budget in more than three years, and shoved job-killing government health care on small businesses across the country.” Lovely sound bites these, but hardly a rationale for voting against a step in the right direction on tax policy. First, no one’s “ignoring pump pain,” in fact our oil production has increased in the past three years:
“After declining to levels not seen since the 1940s, U.S. crude production began rising again in 2009. Drilling rigs have rushed into the nation’s oil fields, suggesting a surge in domestic crude is on the horizon.
The number of rigs in U.S. oil fields has more than quadrupled in the past three years to 1,272, according to the Baker Hughes rig count. Including those in natural gas fields, the United States now has more rigs at work than the entire rest of the world.
“It’s staggering,” said Marshall Adkins, who directs energy research for the financial services firm Raymond James. “If we continue growing anywhere near that pace and keep squeezing demand out of the system, that puts you in a world where we are not importing oil in 10 years.” [Houston Chronicle]
Secondly, to quote that radical liberal Ronald Reagan, “There they go again,” this time on the rather tired ‘Gee There’s No Budget talking point.’ The Chairman of the Senate Budget Committee debunked this one in a hurry:
“But Conrad said the Budget Control Act, which the Congress passed last summer after weeks of horse-trading over raising the debt ceiling, included the budget for this year and next year and that in many ways it is “stronger” and “more extensive” than a traditional budget.
He also went on suggest that any of his GOP his colleagues who continue to repeat the 1,000-day line would be guilty of either gross ignorance or deliberate deception.
“Either they don’t know what they did or they are misrepresenting what we all did,” Conrad said.
“If I hear another assertion … I will know that somebody is not telling the truth,” he said. “[I] hope now we have laid this issue to rest.” [The Hill]
So, which was it? Did Senator Heller mean he was grossly ignorant of the Budget Control Act or is he being deliberately deceptive?
And third, Oh that job-killing health care reform act…” Precisely how is an act which created opportunities for training 500 new primary care physicians by 2015 a job killer? Or, support for 600 new physicians assistants, or another 600 nurse practitioners, or a program for opening 10 new nurse administered clinics, or encouraging states to augment programs for increasing their professional health care work force by 10% to 25% become a “job killer?” Does increasing access to health care facilities in underserved areas constitute a job killing exercise? Does a Department of Labor initiative to increase job training in health care professions classify as Job Killing?
How does expanded financial assistance to health care trainees constitute Job Kill? How does granting tax breaks to health care professionals who serve in remote or difficult locations fall into the Job Kill category? [DHHS]
There have been several analyses of the total job impact of the Affordable Care Act and Patients Bill of Rights which show employment related statistics along a predictable range on the ideological spectrum. Politifact may come as close as any estimate to the job creation actually in the offing under the ACA:
“In reality, the number of jobs produced per year would vary, according to the report. For instance, in 2013, the number of jobs created under the second scenario would be about 210,000. That number would climb to nearly 800,000 in 2019.”
Not only is labeling every initiative which might impinge on corporate profitability or executive compensation as “job killing” inaccurate, it’s also intellectually lazy.
OMG It’s A Tax Hike! This generalization also ignores that the provisions of S. 2203 aren’t a tax hike on everyone, and certainly not on the 99% of the country earning less than a cool million annually.
Senator Harry Reid (D-NV) issued a statement yesterday emphasizing this point:
Yesterday Senate Republicans once again rejected the idea that millionaires and billionaires should contribute their fair share to help this country prosper. Republicans sent a message to millions of honest, hard-working Americans who will file their taxes today: it’s fair for Warren Buffett to pay a lower tax rate than his secretary. Republicans said it’s fair for Mitt Romney to pay a lower tax rate than his cleaning lady or his chauffer. They believe it’s fair for hedge fund managers and executives to pay a lower tax rate than school teachers and waitresses and bus drivers.
That’s just crazy. But that’s not my word for it. That’s what President Ronald Reagan called a system of “unproductive tax loopholes that allow some of the truly wealthy to avoid paying their fair share.” In 1985, Ronald Reagan knocked the web of loopholes that allowed people making hundreds of millions of dollars each year to pay lower tax rates than construction workers or janitors. President Reagan called it “crazy.” This broken system “made it possible for millionaires to pay nothing, while a bus driver was paying ten percent of his salary,” Reagan said. But the same system is in place today. And, as that radical liberal Ronald Reagan said, “That’s just crazy.”
Apparently, Senator Heller has moved somewhere far to the right of that aforementioned radical liberal Ronald Reagan. The Class Warriors seem to have all lined up somewhere well to the right of the old Morning in America Man, and Senator Harry Reid (D-NV) noted the weaponry assembled by Senator Heller and his brigade:
“Yesterday my Republican colleagues used some strong words to oppose Democrats’ plan to right that inequality. Republicans called our common-sense proposal to ensure no one making more than a $1 million a year pays a lower tax rate than a truck driver, a secretary or a police officer “class warfare.” Republicans are pushing a budget that would end Medicare as we know it, slash nursing home coverage for the elderly, decimate Pell Grant funding and kick 200,000 kids out of the Head Start Program.
And they’re calling our proposal class warfare? I wish that were the most ridiculous thing Republicans have said about our proposal to bring a measure of fairness to America’s tax system. Far from it. One member of Senate Republican Leadership equated this measure to “shooting ourselves in the head.”
Shooting themselves in the foot during an election year may be more like it. Senator Reid continued:
“The Paying a Fair Share Act – also called the Buffettt Rule – would have ensured millionaires and billionaires paid at least as much as their secretaries, assistants and nannies. Yet Republicans think asking those lucky millionaires and billionaires to contribute their fair share is just like shooting the country in the head. Our legislation would have protected 99 percent of small business owners, and maintained deductions for charitable giving. And it would have been a small but meaningful step to reduce our deficit at a time when every penny – or in this case, every billion – counts.
It doesn’t seem radical to me to ask Warren Buffett – who made almost $63 million in 2010 – to pay a higher tax rate than his secretary. It didn’t seem radical to Ronald Reagan, either. And it doesn’t seem radical to the three-quarters of Americans who support our legislation.
The wealthiest Americans take home a greater percentage of the nation’s income than at any time in nearly a century. Yet they enjoy the lowest tax rate in more than 50 years. So it’s no surprise Americans believe millionaires should shoulder their fair share. Even two-thirds of millionaires – and a majority of Republicans around the country – agree it’s time to fix a system rigged to favor of the richest of the rich.
Republicans in Congress are the only ones who aren’t on board. If you need evidence that millionaires and billionaires can afford to contribute a little more, consider this fact: last year there were 7,000 people who made more than $1 million but didn’t pay a single penny in federal income taxes. Not one thin dime. Thanks to Republicans, those lucky millionaires and billionaires can keep gaming the system, while middle-class workers keep picking up the tab.”
It will take more than highly generalized talking point word salad with a dressing of political distraction to dig GOP candidates out of this particular hole in 2012.