Tax Rich Liberals

Republicans have been forced into a Hobson's choice of either letting the Bush tax cuts expire for everyone or agreeing to a tax hike on the top 2 percent of income earners (not to be confused with "the rich," who have already made, inherited or married their money).

If Republicans object to the Democrats' hitting job creators with a tax hike, three things will happen: Taxes will go up for everyone; Republicans will be seen as the "party of the rich"; and the inevitable economic collapse will be blamed on Republicans.

If Democrats were merely trying to raise taxes on the rich in a vacuum, it would be easier for Republicans to oppose raising anyone's taxes. But because the Bush tax cuts are only temporary, unless the high-income earners' taxes go up, everyone's taxes revert to pre-Bush tax rates.

Republicans cannot be the party that raised everyone's tax rates to prove that they can't be pushed around by the Democratic Senate and Democratic president. You don't want job-killing tax hikes on producers? Vote Republican next time.

It is not helpful to complain, "But Republicans will be blamed no matter what they do!" Yes -- true. When has that not been true? It's not a novel insight, and it's certainly not an argument for handing our enemies a baseball bat to bludgeon us with.

Consider that the media's neurotic fixation on an alleged Republican "War on Women" was going nowhere. It wasn't even working with soccer moms -- until Todd Akin and Richard Mourdock started prattling about rape and abortion.

Suggestion for Republicans: Stop living up to the Non-Fox Media's stereotype of us as woman-hating Cro-Magnons who care only about the rich.

The fact that the NFM is against Republicans doesn't mean Republicans can never win any battles. (The demographic shift to Third World welfare recipients will soon mean Republicans can never win any battles.)

Apart from gay marriage, the only issue the NFM has ever cared more about is aborting babies. And yet, intelligent pro-lifers swung the debate and public opinion by pushing parental notification laws, spousal notification laws and partial-birth abortion bans.

Even now, when we're down to a slight majority in one-half of one branch of government, there are crucial battles Republicans can win.

I note that rich liberals -- who somehow manage to avoid paying high taxes themselves -- are always wildly enthusiastic about raising taxes on the middle class to keep the strivers down.

Forget the top 2 percent. The top 1 percent of the top 1 percent keep voting for higher taxes -- and then take advantage of indefensible tax loopholes and deductions. Get them.

Californians, for example, apparently adore high taxes. By contrast, Texans -- and the Californians who have relocated there -- do not. So why should residents of high-tax states be able to deduct their state and local taxes from their federal taxes? Texas and other no- or low-tax states are being forced to subsidize the profligate states.

The five highest-taxed states are New York, New Jersey, California, Vermont and Rhode Island -- with California soon pulling into the lead. The five least-taxed states are Florida, Alaska, Nevada, South Dakota and Wyoming.

You want high taxes, New York and California? Then pay them -- with no deductions for state and local taxes on your federal returns.

Billionaire liberal Warren Buffett keeps gassing about how he's dying to pay a higher tax rate (while employing a phalanx of lawyers to argue that he owes less in taxes than the IRS says he owes). Buffett is taking advantage of an unwarranted tax loophole that allows full-time investors like himself to report their entire income as capital gains, not ordinary income.

But that's his job! A stock-picker like Buffett is completely different from a doctor, whose job is to save lives, or a lawyer, whose job is to wreck them. They pay the full income tax rate for what they earn doing their jobs, and then pay a lower capital gains rate on investing the money they get to keep.

Buffett's only job is to earn capital gains. He and others like him should be paying the ordinary income tax rate like the rest of us on the money he earns from his job. Close that loophole. Almost no Republicans will be harmed in the making of this tax change. (There's a reason Sen. Chuck Schumer fought so hard to save it.)

Finally, as Glenn Reynolds -- the law professor known as "Instapundit" -- has been arguing, it's time to end Hollywood's exemption from excise taxes.

Excise taxes are taxes imposed on goods and activities, passed on to the consumer, such as alcohol and tobacco taxes. There are excise taxes on gasoline, airlines, tanning salons, fishing and archery products, truck driving, long-distance telephone service, and on and on.

Hollywood movies used to be subject to an excise tax, but, for no reason whatsoever, rich Hollywood liberals have been relieved of excise taxes on their products since the 1950s.

Reynolds suggests that, for "extra fun," Republicans "could show pictures of David Geffen's yacht and John Travolta's personal Boeing 707 on the Senate floor."

Republicans can't block the Democrats from raising taxes on "the rich" without themselves being responsible for raising taxes on the middle class. But they can at least force liberal fat cats to start paying their fair share.

The Rats are very clever in protecting their income by only raising rates while leaving their favorite loopholes intact.

There is a good reason why the tax code is thousands of pages long: It is full of tax exemptions & deductions targeting cronies & crony groups. This is why Buffet & Soros support higher rates. They wont pay them no matter how high the rates are.

Buffet, by the way, owes billions of back taxes he has not paid. But, crony tax law keeps him out of jail while the average American would be impoverished & in jail for such tax delinquencies.

Frankly, I don't know why* Boehner & Co. fight the higher rates for the rich**, which includes Boehner & Co. The rich will simply rearrange their finances to continue to avoid paying taxes as they have always done. Real tax reform would get rid of 20,000+ pages of loopholes in the tax code. Buffett & Soros would squeal like stuck pigs if this were to happen.

* Actually, I do know why: To avoid real tax reform. Both sides are equally guilty as both sides have their pet deductions & exemptions.

**I do not consider $250,000 income as rich. These people & small business owners are middle class, at best. This Obama number was always too low & is another betrayal of the middle class by Obama. One million dollars in income is where the upper bracket should begin, yet few pols are arguing the $250k is too low.

Rather than lose this battle Republicans should pass a bill as follows and then go home leaving it up to Reid to vote it up or down.

1) turn the tables on Obama and lower the middle class tax rates (below $250,000) by 2 percentage points. This reduction will offset the impact on the middle class #2.

2) put a 30% tariff on all imports. Call it an incentive to bring jobs back to America. Tell the people we’ve been losing a trade war for the last 30 years and it is time to fight back. This tariff will raise $600 billion under the static economic formulas used by the government to assess the impact of taxes.

3). Keep the rates on the above $250k the same as today. Tell the people we are lowering rates on the middle class while not giving a break to the wealthy.

4). Implement a true “millionaire” tax by eliminating all deductions and credits for individuals with adjusted gross incomes over $1 million. Also tax dividend and capital gains at the marginal income tax rate for filers with adjusted gross incomes of $1 million or more. Eliminate “carried interest” for individuals with adjusted gross incomes of $1 million or more. Let the progressive Wall Street bankers and Mr. Buffett pay marginal income tax rates on their capital gains and dividends.

5). Protect small business by allowing small businesses to pay a flat 15% rate on all profits retained in the business. Profits extracted by the owners to be taxed at marginal individual rates.

6). Death tax exemption for all taxpayers of $5 million indexed for inflation ($10 million per couple). Death tax rate for individuals to be same as marginal tax rate the prior year. That way a middle class taxpayer who is normally taxed at a 20% rate doesn’t pay 50% on the value of the family business she inherits.

7). A new federal excise tax of 10 cents on every music and video download, every movie ticket sold, every entertainment DVD or CD sold. Plus a $1.00 excise tax on every ticket to a concert or professional sporting event. Republicans should justify the tax by saying the entertainment industry is making billions and it is time for them to pay their fair share.

8). Change “base” for federal budget assumption to prior year actual spending instead of prior year plus an inflation assumption.

9). Establish a spending ceiling of $X and require the president to show in his upcoming 2014 budget he will meet the spending target. Force Obama to be specific on the cuts.

10). Include a $1 trillion increase in the national debt ceiling with the requirement the president present a specific plan for achieving a balanced budget by the end of his current term. No plan, no increase in the debt ceiling.

The Republicans are losing the PR war. The only way to turn the tables on the class warfare game is to pass a tax bill with real middle class benefits, and perceived penalties for the wealthy. This plan does this without hurting small business.

To those who say the tariffs will damage the economy, I say not as much as caving to Obama’s demands. Actually a tariff will hit China in the teeth. To protect their market share Chinese factories will lower prices to offset some of the impact of the tariff which will in turn put huge pressure on the Chinese economy. From a national security perspective this will be good. To the extent prices for imported products do increase it will help domestic producers. In addition it allows Republicans to position themselves as the pro American and pro US worker party. This is a much better position than being the pro wealthy party. It puts huge political pressure on one of the Democrat constituent groups, the unions, whose members will love a tariff. Plus a tariff will raise significant revenue for the treasury. In addition, the 47% who pay no federal income taxes will pay tax indirectly, on every imported product they buy.

If the House Republicans pass this plan and go home the Dems will have the choice of voting against real middle class tax cuts and real tax increases on the wealthy. If they vote against the tariff they can be accused of voting against US jobs which will not sit well with the union rank and file. With respect to the “rich” this plan hits directly the Democrat wealthy. The Republicans can quietly tell their wealthy supporters they held the line on tax rates and got them a better deal tan they would have gotten under Obama. Plus the entertainment excise tax is a direct levy on a key Democrat constituent group.

The Democrats have Republicans on the defensive. It is time to go on the offense by turning the tables in the PR game and aggressively working to splinter the Democrat coalition. Obama and the Dems are playing hardball politics and winning the PR game. If Republicans don’t fight back hard with popular measures they will continue to lose.

RE :”Republicans cannot be the party that raised everyone’s tax rates to prove that they can't be pushed around by the Democratic Senate and Democratic president. You don't want job-killing tax hikes on producers? Vote Republican next time.
It is not helpful to complain, “But Republicans will be blamed no matter what they do!” Yes — true. When has that not been true? It's not a novel insight, and it's certainly not an argument for handing our enemies a baseball bat to bludgeon us with. “

I been preaching this since the election.

And if Republicans cut any deal to lessen just those automatic tax increases (over $250K) without getting rid of them completely, then they will be part of raising taxes, or at least be perceived to be.

But what if Republicans send two bills to the Senate, one extending cuts <$250K (for everyone) and one >$250K ?

Then they are not :
1) Raising taxes, or
2) Holding the middle class hostage to the rich

Then its Dems that raised those taxes.

They always trap themselves. Hell, maybe they will get O to slightly lower the rate over $250K (over the Clinton rates) in return for our medicare starting at 70 years old. That would be a reason to party.

A really good article from Annie. Glad to see her back.

She makes two observations that I'd like to highlight regarding successful messaging and tactics .....

Pro-lifers are all about saving babies. However, they (we) have recognized that it won't happen overnight in this blind and Godless culture. So they took an incremental approach with their strategy and have won over time [it takes way too long but that's the culture we live in].

Terrific points! Let's be strategic in the tax "revenue increases" (rather than blind rate hikes) we make. Don't give the issue or its impact away. Especially when the Liberals are 'gassing about' paying higher taxes. Give it to 'em. And State taxes and the proper classification of income is an awesome way to target their greatest impact onto wealthy liberals.
p.s. the subtle slam on the lawyers 'whose job is to wreck them' [lives] was vintage Annie.

... at least force liberal fat cats to start paying their fair share.

This last observation reminds me of one of Ronaldus Maximus' great and timeless quotes ......

I've never been able to understand why a Republican contributor is a 'fat cat' and a Democratic contributor of the same amount of money is a 'public-spirited philanthropist'.

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