Terrance Heath
Published: Sunday 30 September 2012
“The night before the nation received its latest bad news on unemployment, Christie told a cheering Republican crowd that the nation’s jobless were lazy examples of an entitlement mentality.”

House GOP: Taxes from Wealthy are “Charity”

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It's one of the dumbest, most insulting, dismissive, and frequently heard bits of rhetoric spewed forth from the sneering mouths of conservative pundits and politicos. So, it stands to reason that congressional Republicans would like to make it the law of the land. Michelle Bachmann offered it as advice to Warren Buffet, and served up another version of the same during the GOP primary debates. But nobody put it more than that "heartless, smug, bullying embodiment of the Republican Party," New Jersey governor Chris Christie.

...The night before the nation received its latest bad news on unemployment, Christie told a cheering Republican crowd that the nation's jobless were lazy examples of an entitlement mentality.

Needless to say, Chris Christie is now considered a leading Vice Presidential contender.

Christie's blunt style seemed refreshing at first. Hey, I kinda liked the guy myself.

But "blunt" became "ugly" very quickly: Telling union officials to "cut the crap." Shouting down a right-wing millionaire who asked a blunt question at a Meg Whitman rallyInsulting a nonpartisan state agency for reaching a conclusion he didn't like. Rudely blowing off a constituent during a televised question-and-answer session. Telling Warren Buffett to "just write a check and shut up.'

Maybe GOP leaders are taking their cues from Bachmann and Christie. Then again maybe they're merely following the lead of their presidential nominee. After all, in one of his less-reported gaffes, Mitt Romney equated taxes with charity. Or perhaps Republicans are simply trying help Romney to spin the revelation in 2011 tax returns (not the potentially more interesting 2010 returns, but the ones nobody is asking to see): that Romney may have overpaid his taxes.

You dont often see Republican politicians donating money to the federal government. But thats what Mitt Romney did today. In a statement about Romneys just-filed 2011 tax return issued by his campaign, Brad Malt, the trustee of Romneys blind trust, notes that the candidate and his wife paid $1,935,708 in taxes on $13,696,951 in income, for an effective tax rate of 14.1 percent. Malt notes that the Romneys claimed only $2.25 million in charitable deductions, despite having given more than $4 million to charity. By way of explanation, Malt states:

The Romneys thus limited their deduction of charitable contributions to conform to the Governor's statement in August, based upon the January estimate of income, that he paid at least 13 percent in income taxes in each of the last 10 years.

This summer Romney suggested that paying more taxes than required is for suckers. So maybe House Republicans are trying to help him out with legislation framing taxes from the wealthy as charitable donations, according to NYT's Bruce Bawer.

The Republican-controlled House of Representatives took a break last week from doing nothing to pass a bill to facilitate voluntary taxation. Almost simultaneously, Mitt Romney released his final tax return for 2011, showing that he voluntarily overpaid his taxes by taking less of a deduction for his charitable contributions than he was permitted.

The legislation was H.R. 6410, The Buffett Rule Act of 2012. Those not acquainted with the misleading titles often given to Congressional bills might at first glance think this one has something to do with raising taxes on the ultrawealthy.

Of course, Republicans would never actually raise taxes on the ultrawealthy; they think, or at least assert publicly, that the deficit results from too many poor people not paying taxes. But it would be very helpful to them to have a fig leaf that looks as if they had found a way of getting the rich to pay more. That is by encouraging them to voluntarily pay more, as Mr. Romney did.

Named for the billionaire Warren Buffett, what came to be known as the Buffett rule is a proposal by Democrats that all those with incomes of $1 million or more pay at least 30 percent of their income in federal income taxes.

You may be forgiven for initially thinking, as I did, "They've got to be kidding me." But the reality of 2012 election season is that the kind of stuff you'd expect to read in The Onion turns out to be actual news. (Case in point, a coworker of mine at first didn't believe the Romney quote about windows on airplanes was real, and thought it had to be a joke. Then he asked me about the source of the quote. It was the LA Times. He merely sighed in response.)

It's no joke. They really mean it. Tim Price, at Next New Deal, explains the implications.

There’s a fundamental ideological divide between progressives and the modern conservative movement, and it concerns how much they buy into the concept of the social contract. That divide is reflected in the GOP’s fallback response to President Obama’s Buffett Rule proposal: “If Warren Buffett thinks he doesn’t pay enough taxes, why doesn’t he just volunteer to pay more?” Mike Konczal effectively dismantles this pseudo-logic here, and on a rhetorical level, it’s on par with “If you love the government so much, why don’t you marry it?” On the other hand, it makes a certain amount of sense if you think of society as something we can choose to opt out of once it’s outlived its use to us instead of an ongoing support system that we’ve all bought into. If you see the rich as the people who have benefited the most from our tax-funded social structure, it only seems fair to ask them to give back more in tough times. But if you think the rich are noble martyrs who are doing the rest of us a favor by choosing not to “go Galt” and withdraw from society, it’s clearly unjust to ask any more of them unless they volunteer it out of the goodness of their hearts.

Unfortunately, the GOP approach presents an obvious collective action problem, which is why . The reason we have a tax code in the first place is that we determined it was impossible to fund the essential functions of government by having the president busk for tips. We don’t set the federal budget by passing a basket around and adding up the loose change we’ve collected. Congress establishes tax rates, we pay our taxes, and in exchange we get schools, roads, police, firefighters, health care, clean air, safe food, and so on. That’s how it works – except for the wealthiest Americans. With Republicans’ help, they have a few extra steps, like hiding their money in tax shelters, benefiting from all those government services anyway, and then complaining vociferously about how unfairly they’re treated.

There's no real need to craft a response to the GOP's latest Orwellian nonsense. First, most Americans see right through it. Patriotic Millionaires has posted on its website

Government, Republicans endlessly intone, should do less, not more for the unfortunate. Leave the food pantries and the homeless shelters to the churches and the do-gooders.

This is wishful thinking, and judging by new polling data, most Americans seem to see right through it.Seven in 10 Americans oppose cutting funds for social programs aimed at helping the poor, according to a new poll by the Public Religion Research Institute. Moreover, 67 percent of those polled said that government should do more to narrow the gap between the haves and the have-nots.

Can I hear an amen for charity?

True, Republicans and Democrats answered such questions quite differently. Nevertheless, if the GOP candidates are looking to replace the current occupant in the White House, they might want to dig deeper into the polls findings.

Independents tended to side with the Democrats on taxation and social spending questions. Moreover, the poll found that majorities of respondents of all religious groups, ages and education levels agreed that the government should do more to reduce the gap between the rich and the poor. Eight in 10 polled agreed that the gap between the rich and the poor has increased.

One telling detail was that 60 percent of white evangelicals, a historically Republican group, favoredraising taxes on those who make more than $1 million a year to help eliminate the federal deficit. This same group was also heavily opposed (58 percent) to cutting federal aid to the poor.

Second, there are several versions of an effective reponse out there. Patriotic Millionaires has one posted on its website, in an open letter President Obama, Harry Reid, and John Boehner. President Obama has delivered several effective reponses, but perhaps none quite so eloquent as in his address to a joint session of Congress last September. And, arguably, nobody has done it better than Elizabeth Warren.

In a video of a recent Warren appearance, posted online by an individual who says he or she is not affiliated with the campaign, Warren answered the charge. I hear all this, you know, Well, this is class warfare, this is whatever, Warren said. No. There is nobody in this country who got rich on his own nobody.

You built a factory out there? Good for you. But I want to be clear. You moved your goods to market on the roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police-forces and fire-forces that the rest of us paid for. You didnt have to worry that marauding bands would come and seize everything at your factory and hire someone to protect against this because of the work the rest of us did.

Now look, you built a factory and it turned into something terrific, or a great idea. God bless keep a big hunk of it. But part of the underlying social contract is, you take a hunk of that and pay forward for the next kid who comes along.

But, for my money, I think Stephen King's reponse to Chris Christie is most appropriate.

What groups like the Patriotic Millionaires and candidates like Elizabeth Warren have said with more civility and eloquence, King puts in language even Christie can understand.

Cut a check and shut up, they said.

If you want to pay more, pay more, they said.

Tired of hearing about it, they said.

Tough shit for you guys, because Im not tired of talking about it. Ive known rich people, and why not, since Im one of them? The majority would rather douse their dicks with lighter fluid, strike a match, and dance around singing Disco Inferno than pay one more cent in taxes to Uncle Sugar. Its true that some rich folks put at least some of their tax savings into charitable contributions. My wife and I give away roughly $4 million a year to libraries, local fire departments that need updated lifesaving equipment (jaws of life are always a popular request), schools, and a scattering of organizations that underwrite the arts.Warren Buffett does the same; so does Bill Gates; so does Steven Spielberg; so do the Koch brothers; so did the late Steve Jobs. All fine as far as it goes, but it doesnt go far enough.

What charitable 1-percenters cant do is assume responsibility Americas national responsibilities: the care of its sick and its poor, the education of its young, the repair of its failing infrastructure, the repayment of its staggering war debts. Charity from the rich cant fix global warming or lower the price of gasoline by one single red penny. That kind of salvation does not come from Mark Zuckerberg or Steve Ballmer saying, Okay, Ill write a $2 million bonus check to the IRS. That annoying responsibility stuff comes from three words that are anathema to the Tea Partiers: United American citizenry.

King has a lot more to say; like how the wealthy don't create jobs because the wealthy don't spend their tax cuts, but use their wealth to create more wealth not jobs.

I'd quote more of it here, but I'd end up posting the whole thing in order to get the best bits in the context of the whole piece. Instead, I'll just include this bit where King really "brings it on home."

I guess some of this mad right-wing love comes from the idea that in America, anyone can become a Rich Guy if he just works hard and saves his pennies. Mitt Romney has said, in effect, Im rich and I dont apologize for it. Nobody wants you to, Mitt. What some of us wantthose who arent blinded by a lot of bullshit persiflage thrown up to mask the idea that rich folks want to keep their damn moneyis for you to acknowledge that you couldnt have made it in America without America. That you were fortunate enough to be born in a country where upward mobility is possible (a subject upon which Barack Obama can speak with the authority of experience), but where the channels making such upward mobility possible are being increasingly clogged. That its not fair to ask the middle class to assume a disproportionate amount of the tax burden. Not fair? Its un-f--king-American, is what it is. I dont want you to apologize for being rich; I want you to acknowledge that in America, we all should have to pay our fair share. That our civics classes never taught us that being American means thatsorry, kiddiesyoure on your own. That those who have received much must be obligated to paynot to give, not to cut a check and shut up, in Gov. Christies words, but to payin the same proportion. Thats called stepping up and not whining about it. Thats called patriotism, a word the Tea Partiers love to throw around as long as it doesnt cost their beloved rich folks any money.

What I wouldn't give for someone to stand on the House floor and read that into the record.



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8 comments on "House GOP: Taxes from Wealthy are “Charity”"

Jeffrey Hill

September 30, 2012 4:28pm

Romney will file his AMENDED Tax Return the day after losing the 2012 Presidential election reducing his taxes to about 9% -- his "gift" to the Treasury was Kabuki theater for the peons to say he pays about 13% of his income in federal income taxes (when ordinary working class people pay 35%).

majorpayne

September 30, 2012 2:38pm

"Romney suggested that paying more taxes than required is for suckers." I think what he actually said was, "I paid everything I owed and not a dime more," or maybe he said "penny" or "nickel." Whatever he said, nobody is expected to pay more than what is required by law, no matter what his or her income level. People who send additional "donations" to the P.O. box in WV that is set up for bleeding hearts who think the government needs extra dough to balance the budget are indeed suckers.
So are people who think it's okay for billionaires to pay no state income taxes, even though it may be perfectly legal under a specific state's tax code, and try to make up the difference by donating to charities headed by those same billionaires. They think their state tax code is okay, but it isn't. It was designed by filthy rich people for the benefit of filthy rich people. The federal tax code is actually generous to poor people.
People like Romney who donate millions to charity are doing exactly what the federal tax code allows anyone to do, which includes deducting charitable donations, state taxes, and mortgage interest on Schedule A.
The IRS actually limits the amount of charitable donations, so what Romney and Mr. Malt says he did is perfectly legal and respectable. However, not claiming the additional deductions to keep his effective rate above 13% made him pay more taxes than necessary, which would make him a sucker according to the definition used.
What would really be interesting are Romney's state taxes. That is where most billionaires make out like bandits. Washington has no income tax, but most WA residents have no clue they are being taken to the cleaners by CEOs of Microsoft, Starbucks, Amazon, etc. Both Utah and Massachusetts have income taxes, either of which would cost Romney at least half a million a year, in addition to sales and property taxes, which are all deductible from federal taxes.
Journalists and PAC spokespersons need to learn at least how to do their own tax returns before writing op-ed pieces and exhibiting how ignorant they are.

larronm

September 30, 2012 11:39am

Now wait just a minute. Being rich is not a bad thing. Becoming rich is to be admired. How one becomes rich is not to be questioned. Even if it was in ways less than kosher. Joseph Kennedy made his fortune during the 20ies with illegal boos. FDR was born into wealth. Even Bill Gates played it fast and loose with the ethics thing. The problem is that too many of the wealthy have come to believe that they are somehow entitled to their wealth. That those who suggest that they should pay a larger share of taxes are moochers. They have come to believe that gaming the system to avoid paying taxes is the proper thing to do. That is if you ar rich. If you are not rich you are obligated to pay every penny required. Well, it ain't so. Elizabeth Warren said it best. You had some help in becoming wealthy. If you built a factory or a chain store or the like, you earned your wealth but you had a lot of help getting there. And it wasn't just the roads and bridges, or the public schools that educated your workers, it was your workers and the workers of other businesses and government workers that became your customers. They purchased your goods or services and enabled you to become successful. So let's clear up one idea right hear and now: the job creators are the consumers of the goods and services provided by business. Without that demand, you would have failed. We should not loose sight of an important historical fact, when the top tier tax rates were much higher than they are today, many folks became fabulously wealthy. They built successful businesses that helped to make this country the economic giant it is. The sad truth is that the more we redistribute wealth upward, the less is available to the middle class - the consumers - and as such the whole nation suffers. When the middle class prospers everyone does better, even the rich. Especially the rich!

RealityBites

October 02, 2012 7:41am

Haven't met a criminal yet that didn't 100% believe he had earned his ill gotten gains.

Corporate criminals are just the same, they just wear suits and ties.

jeltez42

September 30, 2012 10:54am

The reality that almost everyone wants to avoid is that there are unavoidable costs of living and of doing business. Protection, education, and public health are at the top of the list. Having infrastructure that allows and facilitates commerce is another. Basic food and shelter fall under sevearl of these as does caring for veterans, disabled, children, and elderly. Research that should yield results benefiting everyone also falls into this and with public funding comes public ownership of the fruits of that research. This ownership would be in proportion to what taxpayers paid.

How to fund these things turns into a question of billing the individual and if they are unable or unwilling to pay, they do not receive those things. Or, the cost are spread across the whole population and everyone pays according to their ability. The US chose the later and it is called taxation. This makes sense because Benny Business Owner uses more from these catagories than Many Middle Class, Hermit Homeless, or Penny Poor. Sadly, in the past 30 years, government had decided not to fund these must haves at realistic levels nor are they at the top of the funding list. Governments now offer bribes of tax-free living to companies that locate within their boundaries. Demand on these essential services goes up, and funds to pay for them stay the same at best, or more realistically, go down. Now everyone, save for those who can pay to hire their own protection, education, health, and infrastructure, suffer. But with this 'We can't tax the job creators (read rich)' attitude we further restrict funding to essential services and increase our risk even more.

What do we do now? Demand that all funding for non-essentials be stopped and that we go back to the original funding of everyone pays according to their ability/means. I wonder how Mitt Romney and friends would feel if we switched to the pay-for-service model for these essential services? And how would they feel if their assets were lost because there were not enough people with the ability to pay for these essentials in the vicinity of their assets?

jooberdoober

September 30, 2012 10:39am

Taxes of the uber-wealthy are basically a recoup of ill gotten gains acquired anyways, they certainly didn't WORK for it by any conventional means. They stole it or had the laws changed for their benefit and paid their lawyers to circumvent any other laws that were in their way.

woetopoe

September 30, 2012 10:16am

The accumulation of wealth, particularly of the vast and influential order, quite possibly may be the single most corrupting and damning influence plaguing humankind ad infitum. Shakespeare once wrote that "gold was the common whore of humanity." Albeit gold, coin, property or whatever form of barter, hence power, is used...it will ultimately be this "desired disease"which dooms the human race to an early extinction. Nine out of ten people "without" privilege beyond avarice enabling wealth, when queried, will answer that money is indeed a pernicious influence upon the psychological make-up of its holder. And yet, if given the opportunity those same nine would jump at the chance of joining those they just admonished. Marx was correct when he stated that life boiled down to perdurable class warfare. Perhaps more relevant is the undeniable fact that "being rich" has filtered into the mentalities of a plurality of people around the world.

Dave Moff

September 30, 2012 10:08am

The head of a successful corporation employs any number of workers, all of whom pay taxes from income earned on jobs which would not exist if the corporation did not exist. To this extent, a corporation generates tax revenue and with any luck, a marketable product as well--a necessity in a capitalist society.

BUT.

Most of the wealthiest people in America today did not earn their money by employing productive workers. They are the heads of financial institutions which make money by shuffling electronic information representing money back and forth. A fair number of them have failed--and received bailouts from the Federal government. They produce nothing that contributes to society and in fact are a drain on it. Yet the heads of such corporations receive "welfare" in terms of subsidies and tax breaks. This while, at best, their activities contribute to inflate, decrease the actual money supply, and circumvent the capitalist process. To say that taxes paid by those who make their millions basically by skimming a little off every dollar which passes through their hands is "welfare" is absurd.

Many such people pay few or no taxes at present. If that is what they wish, fine. But they should never receive another cent of government money, and many of those who have been involved in the recent financial meltdown should be investigated and subject to criminal prosecution. Placing dishonest businessmen above the law does not encourage those who are honest in their dealings, which I presume includes paying their taxes.