You Haven’t Heard the Last of the Buffett Rule

A battle is coming. A battle for America’s future. A battle for her soul.

The opening salvo came earlier this week when the Buffett Rule died in the Senate at the hands of a corrupt minority who refused to even let it come to a vote.

The Buffett Rule was advertised as a minimum tax rate of 30 percent for households earning more than $1 million a year, but that’s not quite right. The minimum rate actually started much lower for those earning $1 million and gradually increased to 30 percent for those earning at least $2 million.

The Buffett Rule would have raised $16 billion per year over the next decade — a measly 1.2 percent of this year’s budget deficit.

Thus it was not a solution. It was a shot across the bow, a warm up for the decision we will face in November, a test run for the expiration of the Bush tax cuts in December. It was the beginning of a battle to reclaim this country as a democracy for the 100 percent, rather than a plutocracy for the 1 percent. A beginning, not an end.

For if there’s one thing the government desperately needs, it’s tax revenue.

Relative to the size of the economy, the federal government is collecting less tax revenue than it has since the Great Depression, less than any of the other wealthy “G-7” countries, and way below the average for so-called industrialized countries.

The average family of four is paying less of its income in taxes than at any time from 1955 to 2006. The richest 1 percent have seen their average tax rates fall even farther, from 58 percent in the 1950s, to 35 percent in the 1970s, to 29 percent in the 1990s, to 23 percent today. Corporations, which are supposed to pay a top statutory tax rate of 35 percent, actually pay only 12.1 percent of their profits in taxes, the lowest since 1972.

Any way you measure it, taxes are low. (And, let’s not forget, the economy performed better when they were higher.)

So it should not come as a surprise that the federal government will only receive $2.5 trillion in tax revenue to pay for $3.8 trillion in spending this year, leaving a deficit of $1.3 trillion.

If this is a major problem — and the majority of politicians on both sides of the aisle agree that it is — then, as a matter of simple arithmetic, we must raise taxes or face draconian spending cuts. Since Republicans are so insistent on cutting taxes and thus increasing the deficit, they have chosen the latter course of action.

A couple weeks ago, I pointed out that it was unfair, unwise, and unusually cruel to force this kind of pain on low-income Americans, who would bear 62 percent of the burden under Paul Ryan’s latest budget proposal. Several readers replied that it’s unfortunate but necessary.

Is it necessary to slash taxes drastically for the rich? Is it necessary to leave the capital gains exemption intact? Is it necessary to increase defense spending? Is it necessary to foist hundreds of billions of dollars of subsidies on American corporations and the richest 1 percent?

None of these things are necessary. In fact, they are all counterproductive and quite dangerous if it is necessary to reduce the budget deficit. Yet we can find them all in the House Republicans’ budget.

What we don’t find in that budget is more tax revenue.

It is a mathematical fact that we can reduce the budget deficit by hundreds of billions of dollars simply by returning to the tax code that we used to have two or three decades ago — when, by the way, the economy was growing faster, wages were rising faster, and income inequality was lower.

It is also a mathematical fact that the top 1 percent captured 93 percent of the income gains in 2010. The recession has done all that the recession can do. The plutocracy is back.

It is up to us to wrest control of this country back from the grips of concentrated wealth and corruption. It will take time. It will take guts. But mark my words: The Buffett Rule will be back. And next time, it will be a heck of a lot bigger than $16 billion.

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This op-ed was published in today’s South Florida Sun-Sentinel.

The Money Race: It’s Closer Than You Think

People seem to be fascinated by the money raised and spent by both parties in the presidential election, but they also seem to be quite misinformed — or, at least, confused — about who has the advantage and what that advantage means.

Many Republicans, for example, are telling scare stories about the Obama campaign being close to raising $1 billion. This is completely untrue. Some experts have predicted that they will eventually raise $1 billion, extrapolating from the $750 million they raised in 2008, but as of now, they are nowhere near that number:

Still, from these numbers, it looks like the Obama campaign has an incredible advantage. Don’t be fooled. That advantage will shrink quickly. The only reason the gap is so big is because Romney was competing against a half dozen other Republican candidates for money:

Now that he has the nomination, all the Republican donors will flow to Romney, which begs the question: Who are those donors?

Two characteristics distinguish Romney’s donors from Obama’s. First, they’re almost certainly richer, given the higher proportion of large contributions:

And second, they’re overwhelmingly dominated by Wall Street:

I still find it astonishing that, in the wake of the worst financial crisis since the Great Depression, the Republican party would nominate a candidate from Wall Street. But I digress.

Of course, the campaigns themselves won’t be the only spenders in this election. The parties also raise lots of money to promote their respective candidates. By that measure, it’s Romney who has the advantage:

Finally, independent groups — especially the new Super PACs — play a critical role in buying media time and airing attack ads. On this front, there’s no question that Romney is winning:

Republican-aligned groups are hitting President Barack Obama with almost $2 million in attack ads and the response so far has been silence.

The reason: Democratic groups formed to counter those charges don’t have the money to do it.

the hardest-hitting television ads will be crafted by outside groups run by advisers closely aligned with the campaigns. In this sphere, Obama and his allies are behind.

[The Republican-founded] Crossroads [GPS], which has two arms, plans to spend $250 million to influence the presidential and congressional races, it announced last year. One entity, American Crossroads, has raised $27 million, according to Federal Election Commission disclosure reports. The other, Crossroads GPS, takes unlimited donations and doesn’t reveal its contributors.

Romney has another friendly super-PAC, Restore Our Future, which was founded by his former aides. It raised nearly $43 million by the end of February, and spent $40 million on ads…

In contrast, Priorities USA set a goal of raising $100 million to defend the president during the general election. According to FEC reports, Priorities USA Action has raised just $6.5 million. When combined with Priorities USA, a partner group that doesn’t disclose donors, the total contributed to the effort was about $10 million by the end of February, according to Burton.

So, no matter what you hear, remember: It’s close, and it’s getting closer.

An Open Letter to Major Ron Pierce (Ret.)

This is a response to the email from Major Pierce, shown at the bottom of this post.

Dear Major Pierce:

My name is Norman Horowitz. I am 79 years old and will be 80 in July of this year.

I served in the United States Air Force from January of ’52 until November of ’55.

I was a radio maintenance student for almost a year, followed by a teaching assignment for three years.

My life was never in jeopardy. Following basic training, I spent a few months less than four years at Scott AFB in Belleville, Illinois.

I would be happier, Major Pierce, if the Democrats spent some time and treasure looking into the reasons we went to war in Iraq and Afghanistan in the first instance.

Also, Major Pierce, I would be interested in knowing why it took President Obama so long to announce “one of the largest increases in funding for veterans’ health care in decades, so they can return to the care they need.”

Lastly, Major Pierce, I’d like to ask that you suggest to America and the Democrats that it is incumbent upon them to resist going to war when asked to do so for questionable reasons by a Republican President.

Sincerely,
A/1C Norman Horowitz
AF 12394420

Quote of the Day: Garry Wills

[The] “natural law” was fallen back on [by Catholic bishops], saying that the natural purpose of sex is procreation, and any use of it for other purposes is “unnatural.” But a primary natural purpose does not of necessity exclude ancillary advantages. The purpose of eating is to sustain life, but that does not make all eating that is not necessary to subsistence “unnatural.” One can eat, beyond the bare minimum to exist, to express fellowship, as one can have sex, beyond the begetting of a child with each act, to express love.

— Garry Wills (New York Review of Books)