Approaching Warren Buffett Without Violating Grover Norquist

Warren Buffett, (left) the third wealthiest person in the world, believes that the richest Americans should pay their fair share in taxes. “How can this be fair?” Buffett asked, regarding how little he pays in taxes compared to his employees. The so-called “Buffett Rule” would require billionaires to pay at least the same marginal income tax rate as Americans making $388,350 per year.

Nearly all of his income is taxed at the 15% top marginal rate for dividends and capital gains, the same rate as workers making under $44,000 in wages. The income for most Americans, the 99% if you will, is from wages, not investment income, unlike many in the 1%. Wages for the 99% are taxed up to a 35% marginal rate. Treating investment income the same way we treat wages would go a long way to restoring tax fairness.

Buffett also believes firmly in the inheritance tax, saying that repealing it would be like “choosing the 2020 Olympic team by picking the eldest sons of the gold-medal winners in the 2000 Olympics”.

Unfortunately, making these common sense changes is impossible because of Grover Norquist (right). Grover Norquist is the founder and president of Americans for Tax Reform. Presidential candidate Mitt Romney and over 95% of all Republican Congressmen have signed Norquist’s “Taxpayer Protection Pledge” requiring them to “oppose any and all efforts to increase the marginal income tax rate for individuals and business; and to oppose any net reduction or elimination of deductions and credits, unless matched dollar for dollar by further reducing tax rates”.

These Congressmen hold a majority in the House of Representatives and block any action in the Senate through their misuse of the filibuster.

It would therefore seem impossible to get past Norquist, but there is a gambit that just might work.

First, do absolutely nothing until January 2013 at which time, absent action by Congress and President Obama, all of the Bush tax cuts will finally expire restoring 2001 marginal tax rates:

  • 15% for first $43,850 (assuming married filing jointly),
  • 28% on the next $62,100,
  • 31% on the next $55,500,
  • 36% on the next $126,900, and
  • 39.6% on any remaining income.

Once rates are restored to the levels we had in the Reagan and Clinton era — a time of economic prosperity it is well to remember — Democrats will have enormous leverage to push Republicans to accept a more progressive tax code. By packaging the Buffet Rule with lower rates for the 99%, the Democrats would force Republicans into voting for the Buffet Rule as part of a package of tax cuts for the vast majority of working Americans (retroactive to January 1, 2013) in order to keep their pledge. Should they fail to do so, they would be widely and rightly pilloried for serving not the 1% but the .01% making in excess of $5,000,000/year and spitting in everyone else’s eye.

This change would be considered a tax cut according to Grover Norquist’s pledge, and could be at least partially offset by increasing the tax on investment income from 15% to something more comparable to the income blue-collar Americans earn through their blood, sweat and tears.

The alternative would be to vote out Congressmen who insist on voting according to their pledge to a lobbyist instead of according to common sense and the wishes of the overwhelming majority of Americans. But that’s just crazy talk.

GOP Protects Millionaires From Being Taxed Like Commoners


Today is Tax Day when Americans pay their share to support our country. Of course, some of the wealthiest Americans are not paying their fair share and the Senate Republicans voted last night to make sure that continues to be the case.

Statement by President Barack Obama

Tonight, Senate Republicans voted to block the Buffett Rule, choosing once again to protect tax breaks for the wealthiest few Americans at the expense of the middle class.

The Buffett Rule is common sense. At a time when we have significant deficits to close and serious investments to make to strengthen our economy, we simply cannot afford to keep spending money on tax cuts that the wealthiest Americans don’t need and didn’t ask for.  But it’s also about basic fairness – it’s just plain wrong that millions of middle-class Americans pay a higher share of their income in taxes than some millionaires and billionaires.  America prospers when we’re all in it together and everyone has the opportunity to succeed.

One of the fundamental challenges of our time is building an economy where everyone gets a fair shot, everyone does their fair share, and everyone plays by the same rules.  And I will continue to push Congress to take steps to not only restore economic security for the middle class and those trying to reach the middle class, but also to create an economy that’s built to last.

American Jews and the Buffett Rule

Strong Support for Shared Sacrifice

— by David Streeter

In recent days, President Barack Obama has spoken about the importance of implementing the Buffett rule-which would ensure shared sacrifice for all Americans by adjusting tax rates so that the wealthiest Americans pay their fair share. When speaking about the Buffett rule yesterday, Obama said:

America has always been a place where anybody who’s willing to work and play by the rules can make it. A place where prosperity doesn’t trickle down from the top, it grows from the bottom; it grows outward from the heart of a vibrant middle class….

In the next few weeks, we’re going to vote on something called the Buffett Rule-very simple: If you make more than $1 million a year … what the rule says is you should pay the same percentage of your income in taxes as middle-class families do. You shouldn’t get special tax breaks. You shouldn’t be able to get special loopholes.

And if we do that, then it makes it affordable for us to be able to say for those people who make under $250,000 a year-like 98 percent of American families do-then your taxes don’t go up. And we can still make those investments in things like student loans and college and science and infrastructure and all the things that make this country great.

 

Last week, the Public Religion Research Institute conducted a poll of Jewish voters in which they found overwhelming support from American Jews for the principles embodied in the Buffett rule:

  • 73% of respondents agreed that “The economic system in this country unfairly favors the wealthy.”
  • 81% of respondents favor “Increasing the tax rate on Americans earning more than $1 million a year.”

This tremendous support by American Jews for the core values surrounding the Buffett rule is not surprising, given the deep support among Jews for ideals such as tikkun olam (repairing the world) and helping the needy.

On this issue of basic fairness, as with so many others, it is clear that the Democratic Party is the true political home for most American Jews.

Transcript and video of Obama’s remarks follows the jump.
April 11, 2012
REMARKS BY THE PRESIDENT ON THE BUFFETT RULE
Eisenhower Executive Office Building

THE PRESIDENT: It is wonderful to see you.  Lately, we’ve been talking about the fundamental choice that we face as a country.  We can settle for an economy where a shrinking number of people do very, very well and everybody else is struggling to get by, or we can build an economy where we’re rewarding hard work and responsibility — an economy where everybody has a fair shot, and everybody is doing their fair share, and everybody is playing by the same set of rules.

The people who have joined me here today are extremely successful.  They’ve created jobs and opportunity for thousands of Americans.  They’re rightly proud of their success.  They love the country that made their success possible, and most importantly, they want to make sure that the next generation, people coming up behind them, have the same opportunities that they had.

They understand, though, that for some time now, when compared to the middle class, they haven’t been asked to do their fair share.  And they are here because they believe there is something deeply wrong and irresponsible about that.

At a time when the share of national income flowing to the top 1 percent of people in this country has climbed to levels we haven’t seen since the 1920s, these same folks are paying taxes at one of the lowest rates in 50 years.  In fact, one in four millionaires pays a lower tax rate than millions of hardworking middle-class households.  And while many millionaires do pay their fair share, some take advantage of loopholes and shelters that let them get away with paying no income taxes whatsoever — and that’s all perfectly legal under the system that we currently have.

You’ve heard that my friend Warren Buffett pays a lower tax rate than his secretary — because he’s the one who’s been pointing that out and saying we should fix it.  The executives who are with me here today, not just behind me but in the audience, agree with me.  They agree with Warren — they should be fixed.  They, in fact, have brought some of their own assistants to prove that same point — that it is just plain wrong that middle-class Americans pay a higher share of their income in taxes than some millionaires and billionaires.

Now, it’s not that these folks are excited about the idea of paying more taxes.  This thing I’ve always made clear.  (Laughter.)  I have yet to meet people who just love taxes.  Nobody loves paying taxes.  In a perfect world, none of us would have to pay any taxes.  We’d have no deficits to pay down.  And schools and bridges and roads and national defense and caring for our veterans would all happen magically.

We’d all have the money we need to make investments in the things that help us grow — investments, by the way, that have always been essential to the private sector’s success, as well, not just — they’re not just important in terms of the people that directly benefit from these programs, but historically, those investments that we’ve made in infrastructure, in education, in science, in technology, in transportation, that’s part of what has made us an economic superpower.

And it would be nice if we didn’t have to pay for them, but this is the real world that we live in.  We have real choices and real consequences.  Right now, we’ve got significant deficits that are going to have to be closed.  Right now, we have significant needs if we want to continue to grow this economy and compete in this 21st-century, hyper-competitive, technologically-integrated economy.  That means we can’t afford to keep spending more money on tax cuts for wealthy Americans who don’t need them and weren’t even asking for them.  And it’s time we did something about it.

Now, I want to emphasize, this is not simply an issue of redistributing wealth.  That’s what you’ll hear from those who object to a tax plan that is fair.  This is not just about fairness.  This is also about growth.  This is also about being able to make the investments we need to succeed.  And it’s about we as a country being willing to pay for those investments and closing our deficits.  That’s what this is about.

Now, next week, members of Congress are going to have a chance to vote on what we call the Buffett Rule.  And it’s simple:  If you make more money — more than $1 million a year, not if you have $1 million, but if you make more than $1 million a year, you should pay at least the same percentage of your income in taxes as middle-class families do.  If on the other hand, you make less than $250,000 a year — like 98 percent of American families do — your taxes shouldn’t go up.
That’s all there is to it.  That’s pretty sensible.  Most Americans agree with me, so do most millionaires.  One survey found that two-thirds of millionaires support this idea.  So do nearly half of all Republicans across America.

So we just need some of the Republican politicians here in Washington to get on board with where the country is.  I know that some prefer to run around using the same reflexive, false claims about wanting to raise people’s taxes.  What they won’t tell you is the truth — that I’ve cut taxes for middle-class families each year that I’ve been in office.  I’ve cut taxes for small business owners not once or twice, but 17 times.

As I said, for most of the folks in this room, taxes are lower than they’ve been, or as low as they’ve been, in 50 years.  There are others who are saying, well, this is just a gimmick.  Just taxing millionaires and billionaires, just imposing the Buffett Rule won’t do enough to close the deficit.  Well, I agree.  That’s not all we have to do to close the deficit.  But the notion that it doesn’t solve the entire problem doesn’t mean that we shouldn’t do it at all.

There are enough excuses for inaction in Washington.  We certainly don’t need more excuses.  I’d just point out that the Buffett Rule is something that will get us moving in the right direction towards fairness, towards economic growth.  It will help us close our deficit and it’s a lot more specific than anything that the other side has proposed so far.  And if Republicans in Congress were truly concerned with deficits and debt, then I’m assuming they wouldn’t have just proposed to spend an additional $4.6 trillion on lower tax rates, including an average tax cut of at least $150,000 for every millionaire in America.

They want to go in the opposite direction.  They want to double down on some of the inequities that already exist in the tax code.  If we’re going to keep giving somebody like me or some of the people in this room tax breaks that we don’t need and we can’t afford, then one of two things happens:  Either you’ve got to borrow more money to pay down a deeper deficit, or you’ve got to demand deeper sacrifices from the middle class, and you’ve got to cut investments that help us grow as an economy.

You’ve got to tell seniors to pay a little bit more for their Medicare.  You’ve got to tell the college student, we’re going to have to charge you higher interest rates on your student loan or you’re just going to get smaller student loans.  You’re going to have to tell that working family that’s scraping by that they’re going to have to do more because the wealthiest of Americans are doing less.

That’s not right.  The middle class has seen enough of its security erode over the past few decades that we shouldn’t let that happen.  And we’re not going to stop investing in the things that create real and lasting growth in this country just so folks like me can get an additional tax cut.  We’re not going to stop building first-class schools and making sure that they’ve got science labs in them.  We’re not going to fail to make investments in basic science and research that could cure diseases that harm people, or create the new technology that ends up creating entire jobs and industries that we haven’t seen before.  In America, prosperity has never just trickled down from a wealthy few.  Prosperity has always been built from the bottom up and from the heart of the middle class outward.  And so it’s time for Congress to stand up for the middle class and make our tax system fairer by passing this Buffett Rule.

Let me just close by saying this.  I’m not the first President to call for this idea that everybody has got to do their fair share.  Some years ago, one of my predecessors traveled across the country pushing for the same concept.  He gave a speech where he talked about a letter he had received from a wealthy executive who paid lower tax rates than his secretary, and wanted to come to Washington and tell Congress why that was wrong.  So this President gave another speech where he said it was “crazy” — that’s a quote — that certain tax loopholes make it possible for multimillionaires to pay nothing, while a bus driver was paying 10 percent of his salary.  That wild-eyed, socialist, tax-hiking class warrior was Ronald Reagan.

He thought that, in America, the wealthiest should pay their fair share, and he said so.  I know that position might disqualify him from the Republican primaries these days — (laughter) — but what Ronald Reagan was calling for then is the same thing that we’re calling for now:  a return to basic fairness and responsibility; everybody doing their part.  And if it will help convince folks in Congress to make the right choice, we could call it the Reagan Rule instead of the Buffett Rule.

But the choice is clear.  This vote is coming up.  I’m asking every American who agrees with me to call your member of Congress, or write them an email, tweet them.  Tell them to stop giving tax breaks to the wealthiest Americans who don’t need them and aren’t asking for them.  Tell them to start asking everybody to do their fair share and play by the same rules, so that every American who’s willing to work hard has a chance at similar success, so that we’re making the investments that help this economy grow, so that we’re able to bring down our deficits in a fair and balanced and sensible way.  Tell them to pass the Buffett Rule.

I’m going to keep on making this case across the country because I believe that this rule is consistent with those principles and those values that have helped make us this remarkable place where everybody has opportunity.

Now, each of us is only here because somebody, somewhere, felt responsibility not only for themselves, but also for their community and for their country.  They felt a responsibility to us, to future generations.  And now it’s our turn to be similarly responsible.  Now it’s our turn to preserve that American Dream for future generations.

So I want to thank those of you who are here with me today.  I want to thank everybody who is in the audience.  And I want to appeal to the American people:  Let’s make sure that we keep the pressure on Congress to do the right thing.
 

Deja Vu: Massachusetts Governors Mitt Romney & John Kerry


Gingrich’s ad “The French Connection” points out linguistic and policy similarities between Gov. Mitt Romney (R-MA) and Sen. John Kerry (D-MA). Now that Romney has given us a glimpse of his taxes we see yet another similarity, “both ended up paying Buffett-rule-esque rates… despite incomes that put both of them squarely in the top percent of earners.” This financial advantage is easily seen on the airwaves in Florida where Romney is outspending Gingrich by 5 to 1.

According to AP, if you “add up the wealth of the last eight presidents, from Richard Nixon to Barack Obama. Then double that number. Now you’re in Romney territory.”

Romney is currently trailing in the polls. However, speculation is flying that Rick Santorum might suspend his campaign to attend to his daughter Bella’s pneumonia, or drop out entirely if as expected he performs poorly in Florida tomorrow. Having been endorsed by former candidate Herman Cain, Newt Gingrich said, “I think that the election will be substantially closer than the two polls that came out this morning. When you add the two conservatives together we clearly beat Romney. I think Romney’s got a very real challenge trying to get a majority at the convention.”

Obama Names Presidential Medal of Freedom Recipient

President Barack Obama named Gerda Weissman Klein, President George H. W. Bush and thirteen others as recipients of the Presidential Medal of Freedom.  The Medal of Freedom is the Nation’s highest civilian honor, presented to individuals who have made especially meritorious contributions to the security or national interests of the United States, to world peace, or to cultural or other significant public or private endeavors.  The awards will be presented at a White House ceremony early next year.

“These outstanding honorees come from a broad range of backgrounds and they’ve excelled in a broad range of fields, but all of them have lived extraordinary lives that have inspired us, enriched our culture, and made our country and our world a better place.  I look forward to awarding them this honor.”

The following fifteen individuals will receive the Presidential Medal of Freedom:

1. Gerda Weissmann Klein

Gerda Weissmann Klein is a Jewish Holocaust survivor who has written several books about her experiences.  After Nazi Germany took over her homeland of Poland, Klein was separated from both her parents:  they were sent to Auschwitz and she to a series of labor and concentration camps.  In 1945, she was sent on a forced 350-mile death march to avoid the advance of Allied forces.  She was one of the minority who survived the forced journey.  In May 1945, Klein was liberated by forces of the United States Army in Volary, Czechoslovakia, and later married Army Lieutenant Kurt Klein, who liberated her camp.  A naturalized citizen, she recently founded Citizenship Counts, an organization that teaches students to cherish the value of their American citizenship.  Klein has spoken to audiences of all ages and faith around the world about the value of freedom and has dedicated her life to promoting tolerance and understanding among all people.


2. President George H. W. Bush

George Herbert Walker Bush was the 41st President of the United States.  Prior to that, he was Vice President in the Reagan Administration, Director of Central Intelligence, Chief of the U.S. Liaison’s Office to the People’s Republic of China, U.S. Ambassador to the United Nations, and a Member of the House of Representatives from the 7th District of Texas.  He served in the Navy during World War II.  President Bush and President Clinton worked together to encourage aid for victims of Hurricane Katrina in 2005 and the Indian Ocean tsunami in 2004.

More after the jump.

3. Chancellor Angela Merkel

Angela Merkel is the Chancellor of the Federal Republic of Germany. She is the first woman and first East German to serve as Chancellor of a unified Germany, which this year marks its 20th anniversary.  She has often said that freedom is the happiest experience of her life.  Chancellor Merkel was born in Hamburg but was raised in what was then Communist East Germany after her family moved to Templin.  Her political career began when she joined the new Democratic Awakening party in 1989 after the fall of the Berlin Wall.  In 1990, as West and East Germany merged into one reunited country, her party joined with the Christian Democratic Union, and she was elected to the German parliament.  She has been chairman of the CDU since April 2000 and was recently reelected to another term.


4. Congressman John Lewis

John Lewis is an American hero and a giant of the Civil Rights Movement.  He served as chairman of the Student Nonviolent Coordinating Committee (SNCC), helped to organize the first lunch-counter sit-in in 1959 at the age of 19, and was the youngest speaker at the 1963 March on Washington.  In May 1961, he participated in the initial Freedom Ride, during which he endured violent attacks in Rock Hill, South Carolina, and Montgomery, Alabama.  In 1964, he helped to coordinate the Mississippi Freedom Project, and, in 1965, he led the Selma-to-Montgomery march to petition for voting rights where marchers were brutally confronted in an incident that became known as “Bloody Sunday.”  Eight days later, President Johnson addressed a joint session of Congress, condemned the violence in Selma, and called for passage of the Voting Rights Act, which was enacted within months.  Since 1987, John Lewis has continued his service to the nation as the U.S. Representative for Georgia’s 5th District, which encompasses all of Atlanta.


5. John H. Adams

John H. Adams co-founded the Natural Resources Defense Council in 1970.  Adams served as Executive Director and, later, as president of the nonprofit environmental advocacy group until 2006.  His tenure is unparalleled by the leader of any other environmental organization.  Rolling Stone writes: “If the planet has a lawyer, it’s John Adams.”


6. Maya Angelou

Dr. Maya Angelou is a prominent and celebrated author, poet, educator, producer, actress, filmmaker, and civil rights activist, who is currently the Reynolds Professor of American Studies at Wake Forest University.  She has served on two presidential committees, was awarded the Presidential Medal for the Arts in 2000 and the Lincoln Medal in 2008.


7. Warren Buffett

Warren Buffett is an American investor, industrialist, and philanthropist.  He is one of the most successful investors in the world.  Often called the “legendary investor Warren Buffett,” he is the primary shareholder, Chairman and CEO of Berkshire Hathaway.  Mr. Buffett has pledged that all of his shares in Berkshire Hathaway – about 99 percent of his net worth – will be given to philanthropic endeavors.  He is a co-founder of The Giving Pledge, an organization that encourages wealthy Americans to devote at least 50 percent of their net worth to philanthropy.


8. Dr. Tom Little (Posthumous)

Dr. Tom Little was an optometrist who was brutally murdered on August 6, 2010, by the Taliban in the Kuran Wa Munjan district of Badakhshan, Afghanistan, along with nine other members of a team returning from a humanitarian mission to provide vision care in the remote Parun valley of Nuristan.  Dr. Little and his wife, Libby, lived and worked  in Afghanistan for three decades beginning in 1976, raising three daughters and providing vision, dental and mother/child care to the people of that country through the NOOR program (Noor means “light” in Persian) that Dr. Little ran for the International Assistance Mission.


9. Yo-Yo Ma

Yo-Yo Ma is considered the world’s greatest living cellist, recognized as a prodigy since the age of five whose celebrity transcends the world of classical music.  Born in Paris, Ma was a child prodigy who went on to study with Leonard Rose in New York.  He made his Carnegie Hall debut at age nine.  He was the recipient of the Avery Fisher Prize in 1978, and, in 1991, Harvard awarded him an honorary doctorate in music.  He serves as Artistic Director of the Silk Road Project, and has won sixteen Grammy awards.  He is known especially for his interpretations of Bach and Beethoven, and for his ability to play many different styles of music, including tango and bluegrass.  He serves on the President’s Committee on the Arts and Humanities.


10. Sylvia Mendez

Sylvia Mendez is a civil rights activist of Mexican and Puerto Rican descent.  As an eight-year-old, her parents attempted to enroll Mendez in an all-white school in their community, but were denied entry at and were told to go to the school for Mexican children.  Her father and other parents sued and prevailed.  The Mendez v. Westminster case was a landmark decision in the civil rights movement against segregation.  Mendez currently travels around the country giving speeches on the value of a good education.


11. Stan Musial

Stan “The Man” Musial is a baseball legend and Hall of Fame first baseman for the St. Louis Cardinals.   Musial played 22 seasons for the Cardinals from 1941 to 1963.  A 24-time All-Star selection, Musial accumulated 3,630 hits and 475 home runs during his career, was named the National League’s Most Valuable Player three times, and was a member of three World Series championship teams.  Musial also served as the Cardinals’ general manager in 1967, when the team once again won the World Series.


12. Bill Russell

Bill Russell is the former Boston Celtics’ Captain who almost single-handedly redefined the game of basketball.  Russell led the Celtics to a virtually unparalleled string of eleven championships in thirteen years and was named the NBA’s Most Valuable Player five times.  The first African American to coach in the NBA-indeed he was the first to coach a major sport at the professional level in the United States-Bill Russell is also an impassioned advocate of human rights.  He marched with Dr. Martin Luther King, Jr., and has been a consistent advocate of equality.


13. Jean Kennedy Smith

In 1974, Jean Kennedy Smith founded VSA, a non-profit organization affiliated with the John F. Kennedy Center that promotes the artistic talents of children, youth and adults with disabilities.   From 1993 to 1998, Smith served as U. S. Ambassador to Ireland, and played a pivotal role in the peace process.  Smith is the youngest daughter of Joseph and Rose Kennedy and is the Secretary of the Board of Trustees of the Kennedy Center.


14. John J. Sweeney

John J. Sweeney is the current President Emeritus of the AFL-CIO, and served as President of the AFL-CIO from 1995 to 2009.  The son of Irish immigrants, a domestic worker and a bus driver in the Bronx, he worked his way up in the labor movement to become President of the Service Employees International Union, growing the union to serve as a strong voice for working people.  As President of the AFL-CIO, he revitalized the American labor movement, emphasizing union organizing and social justice, and was a powerful advocate for America’s workers.


15. Jasper Johns

American artist Jasper Johns has produced a distinguished body of work dealing with themes of perception and identity since the mid-1950s.  Among his best known works are depictions of familiar objects and signs, including flags, targets and numbers.  He has incorporated innovative approaches to materials and techniques, and his work has influenced pop, minimal, and conceptual art.