A week after billionaire Warren Buffett called for American leaders to increase the taxes on the mega-rich, congressional Republicans called for a tax increase on the poor and middle-class.
Republicans want to raise the payroll tax on everyone who makes less than $106,000 a year, having earlier opposed the expiration of the Bush-era tax cuts that benefited the wealthiest Americans.
“Many of the same Republicans who fought hammer-and-tong to keep the George W. Bush-era income tax cuts from expiring on schedule are now saying a different ‘temporary’ tax cut should end as planned. By their own definition, that amounts to a tax increase,” reported Associated Press.
“The tax break extension they oppose is sought by President Barack Obama. Unlike proposed changes in the income tax, this policy helps the 46 percent of all Americans who owe no federal income taxes but who pay a ‘payroll tax’ on practically every dime they earn,” said AP.
U.S. Rep. Jeb Hensarling (R-Texas) justified increased taxes on the poor and middle-class with the observation that “not all tax relief is created equal.”
And that is the problem.
Some politicians are not in favor of a just tax system. They want to protect themselves and their corporate friends from shared sacrifice, even if there is no evidence that tax cuts for the wealthy grow the economy.
Note the reaction to Buffett’s challenge to the anti-tax, anti-government ideology that guards the rich and believes that taxing the rich hurts the economy.
When Fox News host Bill O’Reilly went on a tear blaming everything wrong with the economy on President Obama and implying that Buffett had a drinking problem, O’Reilly found disagreeable guests – conservative ones no less.
After claiming that increasing taxes on the rich hurt the economy, O’Reilly said, “Buffet has to know that, but still clings to the erroneous belief that further taxing the rich is an economic solution.”
O’Reilly then asked Ben Stein, a frequent Fox News guest and former speechwriter for Presidents Richard Nixon and Gerald Ford, if he agreed that everything he had said was correct.
“Absolutely not,” replied Stein. “I would say that almost every part of it was wrong.”
Stein said that Obama did not cause the recession or the debt.
Stein, initially identified as an economist, continued to correct O’Reilly, who said that taxes hurt the economy.
“That isn’t true,” said Stein. “There is no correlation, Mr. O’Reilly, between tax rates on millionaires and people above that level, billionaires, and the growth of the economy… Higher taxes have historically correlated with more growth.”
The floundering O’Reilly sought support from another guest, Wayne Rogers, identified as an investor and entrepreneur.
“Ben is right,” said Rogers.
“Mr. O’Reilly, sir, there is no correlation of raising taxes and unemployment,” said Stein. “If you can show it to me, I’ll eat your shoe.”
A week earlier, Stein challenged conservative columnist Laura Ingraham when she was sitting in for O’Reilly and made a snarky comment about Buffett.
Steinobserved: “[W]e have a situation where very rich people are paying a lot less taxes, less in taxes than they were under Ronald Reagan. I don’t think Ronald Reagan was considered an aggressive tax raiser. Why can’t very rich people pay the same marginal rate that they did under Ronald Reagan? I mean, we need money desperately in the federal government. The rich people have got it. Why can’t we go back to the Reagan rates?”
Stein is one of a growing number of conservatives who are pushing back against the coddling of the rich.
Henry Bloch, registered Republican and long-time head of H&R Block, also challenged the reigning assumption that tax breaks for the wealthy create jobs.
“That’s so baloney,” Bloch told a Kansas City TV reporter. “Rich people don’t create jobs. Companies create jobs.”
Bloch said “the wealthy have a debt to this country. They can afford to pay it and they should.”
Trump said a lot of wealthy people would leave the country and accused them of being unpatriotic.
U.S. Rep. Jeff Fortenberry (R-Neb.) agreed with a questioner at a town hall meeting that he didn’t “necessarily disagree with” Buffett.
He said that tax code loopholes “skew in favor of the ultra-wealthy, ultra-wealthy corporations and the overseas aristocracy.”
A blogger at Forbes.com, Chunka Mui, wrote: “The long-term rate [capital gains tax rate] was cut to 15 percent for most investors in 2003 on the assumption that the change would lead to more capital investment, which would boost the U.S. economy and create jobs. Eight years on, that assumption appears to be wrong.”
Noting that Buffet was right on taxes, Mui said: “The capital gains tax was cut to spur investment, and it does not do that. Given that, it is time to stop coddling the rich (at least on this issue).”
A core doctrine of the anti-tax, anti-government crowd is being exposed as fraudulent by the evidence. The mega-rich who put the public good before private gain and honest Republicans are challenging that doctrine.
What is needed now is a public consensus about how to define shared sacrifice. That value – shared sacrifice – will significantly shape public policy related to taxes and debt. This is the point – the deliberation of values – where goodwill faith leaders have an important contribution to make.
Watch the trailer below for EthicsDaily.com’s documentary on faith and taxes, “Sacred Texts, Social Duty,” and click here to learn more about it.