Of late Mitt Romney seems to have a fixation on “envy.” He has made it part of his stock speech to claim that Barack Obama fosters and promotes a culture of envy and class warfare in the United States. Mitt, however, has it all wrong as usual. The correct word to describe the President’s core values is “fairness.”
When Mitt Romney dutifully recites his rhetoric about “One nation under God” as a substitute for common-sense solutions that can improve the lives of hard-working families, he seems to miss the point about one nation. America is about working together for the common good; not about every person fending for him or herself.
I think we can safely say that most Americans would like to be wealthy. As Tevye sings in Fiddler on the Roof, “Would it spoil some vast eternal plan, if I were a wealthy man?” Giving people a chance to accomplish that is a key American value and a building block of the U.S. economy.
The late Senator and presidential candidate Paul Tsongas in speaking about the Democratic Party once said that the creation of wealth is a good thing and Democrats should be known for encouraging opportunities for all citizens to create wealth. I agree completely. As a small businessman and now a public official, I have devoted my energy to creating jobs and wealth.
Yet Mitt Romney ignores so many obvious ways in which the deck is stacked against most Americans and in favor of those who have created significant wealth and whose principal goal is to preserve and protect that wealth at the expense of those whose aspirations include providing for their families, saving money for college education for their children, and creating a sustainable retirement income.
How can Romney ignore Warren Buffet’s deeply expressed concern that his secretary pays a higher income tax rate than he does?
How can Romney ignore the fact that private equity players like himself pay a 15% tax rate, even though we all know much of what they earn is ordinary income on which most moderate and high earning Americans are taxed at a dramatically higher rate.
How can Romney ignore the fact that the Bush tax cuts, which primarily favor him and the top 0.1% percent of Americans, have been responsible for an estimated $2 trillion dollars of the $15 trillion national debt he decries?
How can he ignore the fact that the tax cuts were implemented at a time when this nation was fighting two wars, the first time in American history that we’ve adopted such irresponsible policies?
The President has consistently preached the gospel of fairness, of social and economic injustice, fundamental precepts of the three monotheistic religious traditions. When the prophet Isaiah commands us to “Offer compassion to the hungry and relieve the oppressed,” to be “repairers of the breach,” he is appealing to every citizen to practice fairness toward our neighbors.
Mitt, drop the envy rhetoric. It doesn’t pass the honesty or truthfulness test. It’s never been part of Barack Obama’s values or his rhetoric. As the likely nominee for President, tell us how you are going to restore a culture of fairness for all Americans. Otherwise you’re just a cheerleader for the plutocracy you appear to be working so hard to preserve, protect, and enhance.
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Steve Grossman is State Treasurer of Massachusetts
Mitt risks his money to invest it and grow it. That money goes into our jobs, buying software and hardware to make us more productive and earn higher salaries.
This is not trickle-down economics, where the rich buy a yacht and the money gets to the yacht makers. This is growth economics, where Mitt’s money is directed at growing as fast as possible. The market determines the best place for his money to go. Would you rather government officials determine the best place? Evergreen solar and Cognos computing are just some high-profile disasters of such an approach. In reaction you will guard against them, but then the result is that government investing steers clear of possible failure, and never goes where it can grow fastest.
If you cut off Mitt’s money then the workers will suffer, even if they never get a capital gain.
It’s all the money the rich don’t spend. When the economy concentrates wealth at the top, as ours has been doing for the past 30 years, you get all sorts of distortions. Hence bubble after bubble after bubble as all that accumulated wealth desperately seeks the highest rate of return.
If we return to a fairer tax structure, with more money for the middle class. We’ll see the money flowing into goods and services. That’s what creates economic growth: demand for goods and services. No business owners is going to create jobs just because he has capital unless there is demand for his product. Likewise, capital will not flow into business unless they have potential customers.
So instead of being invested in the real economy, capital flows into asset bubbles, which make the necessities of life, such as food, transportation and shelter, more expensive for working Americans, giving them less money to spend on goods and services, exacerbating the problem. The create real sustainable economic growth we need a solid middle class of consumers. Shoveling more money to the extremely wealthy will not help us. If that was the solution, we should be very well off, given the increasing disparities of wealth, instead we are mired in the worst recession since the 30s.
… in tax shelters in the Cayman Islands. You’ll have to do better than that.
We tried it.
It didn’t work.
The 2000’s were as low-tax, low-regulation (especially financial) as we’ve seen in the US in recent times. Great results, right?
[ BTW Romney made his money in the 1980’s and 1990’s when high capital gains tax rates were much higher than today: http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=161 ]
The reason Mr. Romney pays a 15% interest rate is that the bulk of his income comes in the form of “carried interest” from Bain. That, in turn, is how profits of Bain (not Mr. Romney) are distributed. They are distributed that way because of a gaping loophole in the federal tax code that benefits institutions like Bain.
It is most explicitly not capital gains, which the rest of your paragraph refers to. This is not “growth” economics, Mr. Romney hasn’t helped anybody grow in years. It is not returns on his money, it is instead compensation for his past service.
Your entire argument rests on fallacious principles.
To make matters worse, a significant portion of his wealth is parked in the Cayman Islands. Since taxes are lower there for foreign investors than in the US, they pay higher fees. That allows Mr. Romney to earn greater “carried interest” than if the same funds were kept in the US (where whatever “trickle-down” benefits they generate would help US rather than foreign workers).
So Mr. Romney has exploited the tax system at least twice — he pays a lower tax rate because of a gaping and indefensible loophole, and he arranges for the taxes on his offshore wealth that would be received by the rest of us to instead be deposited in the accounts of he and his partners.
Sorry, seascraper, but this epitomizes the way that the top 1% avoids paying their fair share. Society gains no benefit from this. None.
We need these people to put their money here, I agree. The way to do that is make the USA more investment-friendly. But if you take a swing at Mitt’s wealth by taxing investments more, you are just going to hit the rest of us.
The foreign investors can put their money wherever they like. Mitt Romney, and other wealthy GOP candidates, can put their money where their mouth is regarding on-shore versus off-shore activities.
More importantly, you skated by the inconvenient fact that your argument in favor Mr. Romney’s preferentially lower 15% tax rate is destroyed by the reality that his income has NOTHING TO DO WITH putting his wealth at risk or any of that other irrelevant happy-talk you offered. He is the beneficiary of a loophole offered ONLY to the very wealthy. That’s all.
The last sentence of your comment is a non-sequitur. We need to transfer some of the wealth of the US 1% to the US 99%. Eliminating the distinction between capital gains and regular income, and eliminating the special treatment of “carried interest” that benefits Mr. Romney so much, will primarily benefit the rest of us. It will do so because it will put more money in circulation. It will allow the government to expand much-needed services like highways, education, research, and so on. There is no evidence to support the rightwing mantra that increasing taxes on the 1% will in any way harm “the rest of us”.
You are making the argument that capital is always more valuable than labor; that supply is always better than demand.
That just isn’t true.
Capital is required to grow the economy to supply the demand. Without demand, capital is basically useless.
There are times when we have a shortage of capital. This isn’t one of them. We have a massive shortage of demand. That means we need to shift money from capital to labor.
A major, major mistake you’re making is that when “capital” is doing well, workers are rewarded. That is completely and patently false on so many levels. What if, with enough capital, I could create a machine that did everyone’s job in the world? No more need for labor. Wouldn’t every business buy that right up? Cut labor costs to zero, it would all be profits. But workers would be decimated.
What about giving “capital” enough money and power to change the laws so that they could pay their workers less? Capital would do very well, workers would get shafted.
15% is a joke. It assumes that we need to keep rewarding capital – who have an unprecedented amount of wealth. Wrong. We now need that wealth to go to the workers to create demand.
I’d love to hear a story where Mitt actually lost money on a company.
The story about Milton Friedman is he goes to India. He sees workers building a road with shovels and asks why aren’t they using backhoes? The answer is that using backhoes would put most of the workers out of a job. His response is, why don’t you take away their shovels and give them spoons?
Did you know it takes a man all day to expend the energy in a few tablespoons of oil? The ratio already reflects a huge investment on the part of capital. Yes there are times when the quick introduction of machines overtakes traditional working methods violently. But the actual experience is usually different; 30 workers using shovels in India are converted to 30 workers using backhoes, building 100 times the number of roads in a year.
This would force the very well off to pay more taxes rather than give billions to hospitals colleges, etc.
These enterprises are huge money makers and pay no taxes, so they shouldn’t have this benefit either.
These contributiosn substantially drive down their effective rates.
It’s a total act of vanity, putting their names on buildings. etc.
Or one of them, anyway, that I have devised in my spare time because the Daughters of Virtue & Sons of Wisdom, L.L.C., so rarely play their own Party cards to maximum advantage.
Her freeladyship of Seascrape is basically on the whight track, yet she pulls her punches. in a most distessing way. Even those Republicanines who propose to tax capital gains at zero percent strike me as sad half-an’-halfers.
What we want, obviously, is … ¡ta-DAAH! …
a NEGATIVE Tax on Capital Gains.
As follows:
Every time ‘Mittens’ Romney, or whatever sober an’ prudent member of the Specuvestor Class, benefits all of us by sellin’ high what he bought low, We the People (dba Aunt IRS) ought to reward the prudence and sobriety, and encourage emulation thereof, by tossing in a little something extra. A matching grant, dollar for dollar, strikes me as ideal in principle/principal, though, not being a chicagonomicist, I leave the exact details to those who are.
Now, even an ignorant lay sheep can see one question coming at this point, “¿But what if Freelord Romney should unfortunately be compelled to sell this or that trifle of a corporation AT A LOSS? ¡Not even a H*rv*rd Victory School M.B.A. can be reasonably expected to make no mistakes at all!”
Mechanical analogy–“the negative of a negative is positive,” &c. &c.–would suggest that in that case we take advantage of the freelordly misfortune and pile on. We might even hear from the direction of Party Neocomrade Prof. Dr. Ch. A. Murray that to “reward failure” is but to ask for more failure. This precious insight, however, must be considered in context. It arose, I understand, from the deep researches of Party Neocomrades Murray and R. J. Herrnstein into what it is, exactly, that makes the Bad Poor so very bad. Clearly such a body of neoscholarship as that will be applicable to a manifest Son of Wisdom (LLC) like Governor Romney only by a most improbable accident. You might even say, “By an utterly unaccountable fluke that will never happen in a million years.”
So I think the Fedguv ought to cover his freelordship’s specuvestin’ losses, if any–in full once again, were it up to me, but I am content that it should not be–chiefly because if we do not, his freelordship may suddenly “go Galt” on us an’ waste whatever baincapital remains to him after the putative reverses on polo ponies, an’ yachts, an’ dancin’ girls, an’ brandy, an’ cigars an’ …. In general, on items of expenditure that are *spiritually* no different from what the Bad Poor waste all those inflated checks issued by the Ponzi Security Administration on, though of course the particular items would be mostly not affordable by the likes of us.
You heard it here first.[*]
Happy days.
–McKibitz
[*] If that’s wrong, I hope you will let me know where you *did* hear it first.