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Excerpt: "The biggest issue on which the candidates have given us the clearest choice is whether the rich should pay more in taxes."

Portrait, Robert Reich, 08/16/09. (photo: Perian Flaherty)
Portrait, Robert Reich, 08/16/09. (photo: Perian Flaherty)


Final Days, Biggest Issue, Clearest Choice

By Robert Reich, Robert Reich's Blog

29 October 12

 

s we go into the final days of a dismal presidential campaign where too many issues have been fudged or eluded - and the media only want to talk about is who's up and who's down - the biggest issue on which the candidates have given us the clearest choice is whether the rich should pay more in taxes.

President Obama says emphatically yes. He proposes ending the Bush tax cut for people earning more than $250,000 a year, and requiring that the richest 1 percent pay no less than a third of their income in taxes, the so-called "Buffett Rule."

Mitt Romney says emphatically no. He proposes cutting tax rates on the rich by 20 percent, extending the Bush tax cut for the wealthy, and reducing or eliminating taxes on dividends and capital gains.

Romney says he'll close loopholes and eliminate deductions used by the rich so that their share of total taxes remains the same as it is now, although he refuses to specify what loopholes or deductions. But even if we take him at his word, under no circumstances would he increase the amount of taxes they pay.

Obama is right.

America faces a huge budget deficit. And just about everyone who's looked at how to reduce it - the non-partisan Congressional Budget Office, the bi-partisan Simpson-Bowles Commission, and almost all independent economists and analysts - have come up with some combination of spending cuts and tax increases that raise revenue.

Just last Thursday, executives of more than eighty large American corporations called for tax reform that "raises revenues and reduces the deficit."

The practical question is who pays for those additional revenues. If Romney's view prevails and the rich don't pay more, everyone else has to.

That's nonsensical. The rich are far richer than they used to be, while most of the rest of us are poorer. The latest data show the top 1 percent garnering 93 percent of all the gains from the recovery so far. But median family income is 8 percent lower than it was in 2000, adjusted for inflation.

The gap has been widening for three decades. Since 1980 the top 1 percent has doubled its share of the nation's total income - from 10 percent to 20 percent. The share of the top one-tenth of 1 percent has tripled. The share of the top-most one-one hundredth of 1 percent - 16,000 families - has quadrupled. The richest 400 Americans now have more wealth than the bottom 150 million of us put together.

Meanwhile, the tax rates paid by the wealthy have dropped precipitously. Before 1981 the top marginal tax rate was never lower than 70 percent. Under President Dwight Eisenhower it was 93 percent. Even after taking all the deductions and tax credits available to them, the rich paid around 54 percent.

The top tax rate is now only 35 percent and the tax on capital gains (increases in the value of investments) is only 15 percent. Since so much of what they earn is from capital gains, many of the super-rich, like Mitt Romney himself, pay 14 percent or less. That's a lower tax rate than many middle-class Americans pay.

In fact, if you add up all the taxes paid - not just on income and capital gains but also payroll taxes (which don't apply to income above incomes of $110,100), and sales taxes - most of us are paying a higher percent of our income in taxes than are those at the top.

So how can anyone argue against raising taxes on the rich? Easy. They say it will slow the economy because the rich are "job creators."

In the immortal words of Joe Biden, that's malarky.

The economy did just fine during the three decades after World War II, when the top tax rate never fell below 70 percent. Average yearly economic growth was higher in those years than it's been since, when taxes on the rich have been far lower.

Bill Clinton raised taxes on the rich and the economy did wonderfully well. George W. Bush cut them and the economy slowed.

The real job creators are America's vast middle class, whose spending encourages businesses to expand and hire - and whose lack of spending has the opposite effect.

That's why the recovery has been painfully slow. So much income and wealth have gone to the top that the vast majority of Americans in the middle don't have the purchasing power to get the economy moving again. The rich save most of what they earn, and their savings go anywhere around the world where they can get the highest return.

It would be insane to compound the damage by raising taxes on the middle class and not on the rich.

Logic, fairness, and common sense dictate that the rich pay more in taxes. It's the key to avoiding January's fiscal cliff and coming up with a "grand bargain" on taming the budget deficit. And it's central to getting the economy back on track.


 

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+22 # Barbara K 2012-10-29 08:57
Our livelihood is a big factor in this election. We stand to lose it under Romneyhood, while the wealthy make out like the bandits. We just cannot allow that to happen. The President is trying to protect the middle class and to elevate the poor to middle class. He needs our help to do that. We have 2 choices: Help the rich get richer under Romney -- or help the Middle Class (that is us, the 99%) and elevate the poor to the Middle Class. So who do we want to help? That is the choice we have as it boils down to the bare bones. I think the rich have quite enough, don't you? We are the ones who need all the help, and the President is the one who will do it. We also need more Dems the House and Senate to help him get us there. The choice just couldn't be more stark. Time to raise the taxes on the rich, we've made them rich enough already. Time we get some help for a change.

OBAMA/BIDEN 2012

The alternative is devastating to us, the 99%. Make your vote count, vote straight Dem so we gave many states that need cleaning out too. Third party votes help Romney, not us.
 
 
-16 # wantrealdemocracy 2012-10-29 09:02
Both of the corporately funded political parties are owned and operated by the top 1% to do their bidding. If you are not in the group of the richest people in this nation you would be really dumb to vote for either of the two corporate puppets leading in the polls. They are one and the same in terms of their obedience to the rich and to the apartheid state of Israel. If you want our nation to survive and for our people to have a decent standard of living you must not vote for either of these two servants of the rich. Taxing the rich is one point but the problem is much more serious than just the financial. We are at a crisis of morality. No way would a moral person be able to vote for a war criminal and the damage that has been done to our Constitution is appalling. You must not vote D or R for any office. Get rid of these evil greedy people that are killing the earth for profit.
 
 
+4 # Granny Weatherwax 2012-10-29 14:40
Hey, Patricia, what do you propose?

Vote Green and get Romney instead?

Real democracy is possible but to obtain it you have to play the game by its rules. Unless you advocate for a revolution?

Your comment reminds me of these republicans who broadcast four years ago that republicans were to vote on one day and democrats on the next. If you think we are that dumb...
 
 
+5 # thomachuck 2012-10-30 07:52
Unfortunately, this otherwise good sense commentary plays to the proposition not to vote. Not a good outcome. Maybe change the electoral process sometime in the future but this won't happen in any of our lifetimes. The name of the game at this late date is to vote for damage control and I think it's clear enough that decision is vote for Obama and Democratic legislators. You certainly should know by now what they stand for.
 
 
0 # jky1291 2012-10-31 21:50
As you devoted posters on RSN know, I have been and still am a firm believer that we need a viable 3rd Party presidential candidate to salvage our nation from the challenges we face. But, with 6 - 9 billion dollars being projected to be spent on this election, no non corporate independent 3rd party candidate superior to President Obama was willing to expose themselves to the reprehensible abuse being heaped on the opponents of the multinational corporations' funded U. S. Chamber of Commerce and all the other undisclosed billionaires' phony "educational" Super PAC's. Despite that fact I would have been willing to deny President Obama my vote for his complicity in his corporate acquiescences, and let the chips fall where they may, until Romney's threat to position Paul Ryan a heartbeat away from imposition of the Fourth Reich. I still have reservations about President Obama's ability to substantially overcome corporate control of our total government, but I have no such reservations concerning the total demise of this country descending into apocalyptic civil war resulting from the 1%'s total enslavement of the 99% under a Ryan influenced administration. The destruction of the great state of Wisconsin was just a trial run for the dictatorship of the 1% over the entire world. VOTE FOR OBAMA! or be responsible for the self-fulfilling religious prophesies of Armageddon. A vote for Obama is a vote AGAINST RYAN!
 
 
+18 # Barkingcarpet 2012-10-29 09:34
No Robert, the BIGGEST issue which is being ignored entirely IS Nature. We are babbling monkeys on a sinking ship, which could be repaired, if we cared more about a livable future, than chocolate/vanil la and $ profits above having a planet worth living on.

Fukushima is still spewing, Fracking and GMO's are raping the soil and water, and the Legitimate Rapist Bankers and endless war profiteers suck away at the apathetic or ignorant consumers.

How do we become more interested in conserving rather than consuming and begin the process of Tikkun, where we may have a possibility of a future worth living in for anythings children?

Shame on us for going along with any of this #$$##! We are more interested in appearances than substance, as we speed into the wall of Nature, trading diverse life for disposable landfill.

Oops
 
 
+18 # Reductio Ad Absurdum 2012-10-29 09:41
The tax argument needs to be framed as the need for the rich and powerful to pay their fair share of the bill — just like the rest of us pay. We've all agreed on a progressive structure so we each pay our fair share of the bill, but giant corporations have figured out ways to pay none of the bill.

Romney wants to cut tax credits for new energy development. If I had been debating him I would have pointed out that his own party calls closing loopholes for Big Oil a tax increase — and they voted against it. Wouldn't eliminating tax credits for new energy also be a tax increase?

When multi-national corporations like GE and BP don't pay their fair share of the bill, WE do. In fact, we've been paying Mitt Romney''s taxes and I want to see his tax returns from the last 12 years.
 
 
+6 # Cassandra2012 2012-10-29 15:10
Yes, no more CORPORATE WELFARE!!!
Where are those damn tax returns for Romney? That the MSM has totally given him a pass on this, though he lusts for PUBLIC office shows they have been BOUGHT and are morally bankrupt.
 
 
+8 # Tje_Chiwara 2012-10-29 09:41
Ah, Don't forget . . . Romney Ryan, in addition to helping those "job-creators" or more accurately "wealth-creator s" (as if they were one and the same . . .), they also promise to really help all the "hero-creators" out there . . . slightly more mysterious, and it does involve an irritating war or three, and rather heavy investments in our under-funded military-indust rial complex . . . but this is another rather critical issue which you can be sure distiguishes the choices in this election . . .
 
 
+6 # Granny Weatherwax 2012-10-29 14:42
Even wealth creators is inaccurate: wealth comes from the conjunction of (dead) money and (live) work.
The real wealth creators work. The investors would like us to mistake their betting their money here or there for actual work.
 
 
+6 # Barbara K 2012-10-29 09:43
It's here! Remember the 99% Cayman investigation I told you about last week? It is here now, and here is a link to it:

http://operationcaymans.com
 
 
+12 # kanihai1950 2012-10-29 09:48
Sure, Mitt, you go ahead and tax those of us earning $45,000 so we're in the 28% and you stay in your 14% while investing overseas where the IRS can't track your income as closely. And the American voters are OK with this? No one I know makes over $250,000 a year and they're voting Romney/Ryan.... go figure!!!!!!!
 
 
-41 # jtatu 2012-10-29 09:51
The Tax Foundation has concluded that the Obama plan to raise taxes on people earning more than $250,000/year would slow economic growth and reduce future incomes. Obama and Reich try to sell this plan purely on the basis of envy. Obama thinks that wealth is something that simply exists and not created and that government's main job is to redistribute the wealth in the name of what the administration defines as "fairness." Other studies have shown that this plan will eliminate 710,000 jobs. Too bad Obama ever got elected in the first place. Let's get rid of hin and his heavy handed cronies.
 
 
+10 # BradFromSalem 2012-10-29 14:27
jtatu,

The tax Foundation is not an independent group. It is obviously from looking at it, a fraud. The site "looks" like its an official site, when in reality it is a tax reduction phanboy's site.
 
 
+5 # Granny Weatherwax 2012-10-29 14:46
And the Romneyforpresid ent foundation has concluded that Obama eats little children in his oatmeal and plans to unplug grandma.

Give us a break. Please?
 
 
0 # jtatu 2012-10-30 20:35
Very insightful.
 
 
+5 # Cassandra2012 2012-10-29 15:11
What incredible bs!
 
 
-1 # jtatu 2012-10-30 20:36
Brilliant comment.
 
 
+3 # thomachuck 2012-10-30 07:57
I think the heavy handed accusation applies best to the nonfeasant, obstructive GOP controlled Congress--the worst ever. The House has a lot to do with the shortage of progress over the last several years; it isn't all on the President's head. Congress has not passed a single appropriations bill where all the previous ones passed dozens, even hundreds of them. This is governing?
 
 
-3 # jtatu 2012-10-30 20:38
It's called checks and balances, thomachuck. That's the way it works. Don't like it ?
 
 
+16 # Todd Williams 2012-10-29 09:58
Again Mr. Reich tells it like it is. I applaud him for his consistent, truthful explanations of our economic reality. I am extremely afraid of what will happen economically if Romney squeaks in. I got badly beaten up in the last recession with a $40k hit on my house value and another $80k in my investments. I'm 62 years old and cannot take another hit like this. If so, I'll be on the street in a cardboard box. We cannot let this clown win. It'll wipe us out.
 
 
+15 # The Ice Maiden 2012-10-29 09:59
It astonishes me to see such support for Romney & Ryan. Have we become a country where people remain loyal to a party no matter what platform that party espouses? Nothing else seems to make sense.

Everyone has to pick their major issues, and I describe myself as a non-Republican. Coming of age in the 60s and 70s, and having gone to law school when female lawyers were an entirely new phenomenon, there is NO WAY I will stand idly by while the Republicans try to turn back the clock. I knew people who had illegal abortions.

But the support for Republican financial claims - rightly called voodoo economics - also leave me speechless. Why are so many Blue Collar Americans supporting tax positions that throw them under the bus? Has the lack of school support begun to erode our ability to engage in critical thinking? I'm beginning to sound like a conspiracy theorist: If we starve the schools, Americans will eventually be incapable of logical thinking, because no one will be teaching them logic, and then the rich can trick the masses into supporting the policies that support the 1% and leave the rest of us to our own devices.

We are surely at a crossroads in this country, and if we want to hold onto the possibility of upward mobility, we need to draw the line in the sand NOW.
 
 
+7 # Cassandra2012 2012-10-29 15:18
Romney --- lusting for power and more wealth; an UN-American amoral tool of Grover Norquist and Karl Rove without any honor or humman decency.
Ready to start WWIII with Iran with YOUR children while he dodges the Vietnam draft (while promoting the war) pretending to be a 'missionary' in FRANCE! & NOT ONE OF HIS FIVE SONS HAS DONE ANY MILITARY SERVICE (or even joined an ELITE military organization such as West Point or the USNA or Air Force Academy.)
HYPOCRITE EXTRAORDINAIRE!
 
 
+1 # thomachuck 2012-10-30 08:00
I wish you had commandeered the title "Crossroads" for yourself before Rove grabbed it. That's truly what we are dealing with here.
 
 
0 # jky1291 2012-10-31 22:54
The "Republican Party" was the victim of a hostile leveraged takeover by the multinational corporations, as represented by the U. S. Chamber of Commerce. They hold no allegiance to this country, as corporate law fails to require considerations beyond profits and occasionally shareholders. In order to fulfill those legal obligations they have relentlessly invested where they could gain the most benefit, political campaign contributions. In order to accelerate the slow progress of this method they chose to purchase a political party. Since the Democrats are too independent, tending to vote their conscience by representing the people too often, and the Fascists negative publicity from their previous rise to power met with some opposition, World War II, the Republican Party was the obvious choice to co-opt, as they were historically very honorable and fought for "government of the people, by the people, for the people", making them the perfect cover for the 1%'s imposition of the Fourth Reich on the 99% of the world. I was a lifelong Republican until I personally talked with my congressman. I briefly lived on President Lincoln's street in Springfield, Illinois, and recently toured his sacred tomb. Reading the plaques of the Gettysburg Address and the Emancipation Proclamation, I can definitively state that no true Republican would bear allegiance to the current fraud posing as their party after absorbing the ideals Lincoln stated to guide his once respected and honorable party.
 
 
+14 # reiverpacific 2012-10-29 10:14
I almost never comment on economic issues, being a bit of a dim-bulb on these matters but one of the most GLARING differences between the two main contenders for the Global light-heavyweig ht power seat is that Obama recognizes that leaner, more focussed and high-quality military (like the SEALs who got Bib-Laden) makes more sense than ever-more hardware and spending on a heavily destructive lumbering death machine (but more for veteran's health), whereas Twit wants to give this behemoth TWO TRILLION $ MORE!
I mean, anything for the death of many but dismantle and totally privatize and consolidate into the hands of the Corporate world, any life saving and improving health care, making it another service available only to the better-off and dictated on their terms, thereby making it even harder for the small-business community (In spite of his claim to be on their side) to establish itself and survive, not to mention reducing any danger of an improved quality of life for the poor, middle class and their descendants.
There's more but that, to me, sticks out a mile.
 
 
+12 # angelfish 2012-10-29 10:22
Once again, Professor, you are SO right. The choice is CLEAR! Never, EVER vote ReTHUGlican if you expect the Wealthy to EVER pay their FAIR SHARE of the Tax Burden! Sadly, Professor, "logic and fairness" are NOT high on the ReTHUGlican's repertoire! "Common sense" left the building, along with the sane and sensible RePublicans, a long time ago!
 
 
-34 # rmccormack 2012-10-29 10:40
Professor Reich: Please explain how the federal government taking in additional 70-80 billion per year is going to balance the budget or reduce the deficit or debt when that money is simply going to be used for more spending and debt? You people have got to be kidding! It's the economy, Bob, and we're not stupid!
 
 
+9 # Tje_Chiwara 2012-10-29 11:40
Quoting rmccormack:
Professor Reich: Please explain . . . . It's the economy, Bob, and we're not stupid!


I am just not sure why so many of the tea-party types or "conservatives" are so worried about being considered stupid. There are plenty of smart, super-intellige nt insane people out there. That's a bigger worry. We could try to differentiate on the basis of education, but even that doesn't break out as one would expect on such issues as Creationism and the like.

It is insane to think that we don't need to raise money to pay the deficit down. It is insane to think that "that money is simply going to be used for more spending and debt", like some kind of ear-marking restrictions. Or that investments in education, infrastructure, or targeted subsidies don't increase tax revenue etc. Ask any mayor or governor who courts big companies with "handouts" whether he or she's doing it to increase the debt . . .

It's all about vision. If you believe 47% or more of the US citizenry cares more about handouts than simply a fair deal, then you may not be stupid, anymore than Romney is, but you're wrong, and you're verging on insane.
 
 
+3 # reiverpacific 2012-10-29 12:23
Quoting rmccormack:
Professor Reich: Please explain how the federal government taking in additional 70-80 billion per year is going to balance the budget or reduce the deficit or debt when that money is simply going to be used for more spending and debt? You people have got to be kidding! It's the economy, Bob, and we're not stupid!

First off, never assume that your opinion is on behalf of the rest of us; that arrogance reflects a fairly typical reactionary attitude. "We're" not yours to address with such sweeping statements.
The Rethug's Holy Grail of "Balanced Budget" (before anything) has been trumpeted by them ad nauseum for decades but never achieved, especially by Reagan R' who actually increased government spending by an all-time record 189%, and Dimwits Bush who squandered a surplus and helped plunge the world into a second depression (my term) with an era of "Eternal war" and tax cuts for the super-wealthy.
Weren't you paying attention when most credible economists like Krugman, Reich and especially Richard Wolff, posited that in a time of (deep) recession, spending is the means by which to create work, boost investment and savings and progressive taxation necessary to spread the load (the "Too big to fail" recipients are still sitting on their bail-out largesse, helping to keep recovery down)?
I highly recommend Richard Wollf's "Capitalism Hits the Fan" for a logical and common-sense analysis of all this.
 
 
+8 # Rita Walpole Ague 2012-10-29 10:49
Yep. Let's follow common sense, and, uncomfortable as it may be (i.e. I'm gonna hold my nose) put in a vote for Oh Bomb Ah.

Michael Moore is right, per usual. And so are you, Prof. Reich. And, as MM advocates, let's get ready to raise Irish hell with Oh Bomb Ah, after we've given him our hard to do vote.
 
 
+7 # obx1212 2012-10-29 10:57
"The top tax rate is now only 35 percent and the tax on capital gains (increases in the value of investments) is only 15 percent."
This is a common characterizatio n that is just plain wrong. As Dr. Reich surely knows, the tax on capital gains is not on "increases in value" but only on increases in sales price over purchase price and then when the investment is sold. If one holds on to capital assets as they appreciate (or depreciate) there is no tax at all until the asset is sold. And any increases can be offset by other losses. And, if the capital asset transferred at death, there are no taxes imposed at all with the exception of the pitifully small estate tax which, of course, the republicans want to eliminate entirely. And, if the capital assets are in IRAs, as most of Mr. Romney's apparently are, the opportunities for tax deferral and even avoidance are legion.
 
 
+14 # MainStreetMentor 2012-10-29 11:10
I am inclined to believe that Plato must have had Mitt Romney in mind when he wrote this quote: ""This and no other is the root from which a tyrant springs; when he first appears he is a protector."
 
 
+4 # BlueReview 2012-10-29 16:27
Years ago I read a short story where the narrator describes one of the characters, "[He] did not know a straight way through any door." That author wasn't talking about Mitt Romney either, but I've had that phrase cycling in my head for a few months now.
 
 
+15 # kanihai1950 2012-10-29 11:14
Dear jtatu, remember Bush's deal that gives tax breaks to the rich because "they're the job creators"????? 11 years later.....where are the JOBS??????????? ?????????
 
 
+5 # Cassandra2012 2012-10-29 15:20
YES!!!!
All the rest is blah blah blah!
 
 
+7 # Lolanne 2012-10-29 13:25
//Logic, fairness, and common sense dictate that the rich pay more in taxes. It's the key to avoiding January's fiscal cliff and coming up with a "grand bargain" on taming the budget deficit. And it's central to getting the economy back on track.//

Unfortunately, logic, fairness, and common sense have no bearing on racism and willful ignorance. I am at a complete loss to understand why ANYBODY who is not already wealthy would cast a vote for these two repugnant crooks and liars. The R&R gang are lusting after power and control; the well-being of the country mean less than nothing to them.

VOTE! VITE STRAIGHT DEMOCRATIC!!! Let's get rid of these TP-ers and do-nothing repigs taking up space and salaries in DC!
 

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