Tuesday, August 16, 2011

Spin, misinformation and disservice to regular citizens

Corporate media mouthpieces have been quick to deride Warren Buffett for his call to stop coddling the mega-rich.  Michael Smyth, perhaps trying to protect his tenure at the top dog, lifted his leg to smear the billionaire, "who's kind of an old man" who's "got billions and billions and billions of dollars."

Smyth said it was an easy call for Buffett to say go ahead and tax the rich. Then he lobbed this one to his guest,
"How do you define the rich anyway. Is it six figures? Someone making 200 grand, is that considered super-rich?"
Actually, that was puffball service for David Logan, Smyth's guest on the NW morning show. Logan was there to politely sneer at and contradict Buffett. He even implied the philanthropist is evading income tax by giving his entire fortune to charity. More later about Mr. Logan and why he might have been invited to appear with Smyth.

Had he paid closer attention to Buffett's argument, Smyth would have known the exact definition he used for super-rich; it was not an income of $100 grand or $200 grand. No person, even Smyth, truly thinks that level of earnings qualifies a person as super-rich.

What Warren Buffet did write is,
"you need to examine the sources of government revenue. Last year about 80 percent of these revenues came from personal income taxes and payroll taxes. The mega-rich pay income taxes at a rate of 15 percent on most of their earnings but pay practically nothing in payroll taxes. It’s a different story for the middle class: typically, they fall into the 15 percent and 25 percent income tax brackets, and then are hit with heavy payroll taxes to boot."
The whole point of Buffet's solution was not to hit the middle classes, the patriots who are carrying real burdens. His suggestion is to increase payments of the wealthiest 0.3% of taxpayers.
"But for those making more than $1 million — there were 236,883 such households in 2009 — I would raise rates immediately on taxable income in excess of $1 million, including, of course, dividends and capital gains. And for those who make $10 million or more — there were 8,274 in 2009 — I would suggest an additional increase in rate."
As I indicated above, we should pay attention to the origins of Smyth's guest David Logan. He works for Washington DC based The Tax Foundation, the head of which is David Lewis, VP and Treasurer of Eli Lilly. The giant manufacturer of Prozac and other pharmaceuticals was one of the companies that asked President Obama for a tax holiday that would help them tap more than $1 trillion of offshore earnings, much of it sitting in island tax havens.

Businessweek:
“Sophisticated U.S. companies are routinely repatriating hundreds of billions of dollars in foreign earnings and paying trivially small U.S. taxes on those repatriations,” said Edward D. Kleinbard, a law professor at the University of Southern California in Los Angeles. “They devote enormous resources first to moving income to tax havens, and then to bringing those profits back to the U.S. at the lowest possible tax cost.”
Other Directors of the Tax Foundation have been provided by Tea Party funders Koch Industries, Exxon Mobil and other mega-corporations who park earnings offshore. CKNW choosing David Logan out of all the unfettered academic economists they could have selected shows the purpose was not information reporting, it was marketing the corporatist point of view. Maybe Smyth's program director hollered down the hall and asked Michael Campbell who to invite.

By the way, William Gale, senior fellow, Tax Policy Center of the Brookings Institution, a non-partisan group that takes positions across the left-right political spectrum provided an Op-Ed to CNN, Buffett is right: Raise taxes on the wealthy. Gale adds interesting points to the debate,
". . . raising taxes to pay for current spending has proved more effective at restraining spending than allowing the government to finance its outlays with deficits. . . The only time in the past 30 years when spending fell was in the 1990s, under President Bill Clinton, when taxes were also raised.

". . . There are, of course, better and worse ways to raise taxes. A general goal would be to broaden the tax base -- reduce the use of specialized credits, deductions, loopholes and so on -- and minimize the extent to which tax rates need to rise."
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6 comments:

  1. Norm, again, you absolutely got this one right on!
    I am appalled that CKNW would ridicule this most logical and timely suggestion from one of the wealthiest men in the world. I am so sick of the tea party solutions that aren't really solutions. Both Bill Gates and Warren Buffet agree on this one. Too bad they don't take some of their billions and fund the anti-tea party!!

    I am going to contact CKNW and express my deep concern over their petty approach to a very legitimate suggestion of how to deal with the incredible debt problem we all are facing.

    Great to have you back putting your comments online again.

    Gary

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  2. I tried emailing a copy of this article to Mike Smyth at CKNW. The Corus mail server rejected it, permanently

    I guess NW doesn't want to hear from people who criticize their operation.

    ReplyDelete
  3. I think the same thing happens to me when I email him...but now I fax (yes, fax)....I feel that way more people will see what I have to say while the physical piece of paper is enroute to the recipient...the more tables it lays on the better....of course, there is always the risk the round file is right below the paper chute of the fax machine...at least you can get a confirmation of transmission......last fax I sent was to Global TV newsroom letting them know I think they made an error on a story...don't imagine I will get a reply

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  4. Money, the great insulator.
    I imagine that having so much of the stuff that it simply does not matter one bit what is happening outside of your doors. It does not matter what others ask or want from you. It does not matter what you family and friends think of you. It gives you the most powerful messages of me, myself and I are the only ones that matter.
    Those with lots of money can feed their ego one hundred percent of the time no matter what.

    My only saving thoughts on those with lots of the green stuff are that they cannot take it with them when they die. Justice that even they cannot control.

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  5. Anyone, in my book, who makes over 200,000 a year should have to bear their fair share of the tax burden.These are the people who can well afford RRSPs and other means to lower their tax rate. The so called middle class cannot afford the contributions any more if they want to live a reasonable life. A move to a flat rate tax ( like Paul Martin was so fond of until he became Prime Minister )would be the fairest tax. Everyone would pay their fair share with the lowest income earners not paying anything at all. No more RRSPs or investment shelters for the rich, no more shady deductions, just a fair tax.Just think, the revenue raised might be enough to eliminate sales taxes and really stimulate the economy. It might even eliminate cross border shopping. And after we make things fair for the little people, we can work on eliminating corporate welfare that seems to go to the richest companys who then shuffle the money out of Canada as profits.

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  6. Yep...it's a common tactic down south to muddy the waters and imply raising taxes on the rich actually means raising taxes on the upper middle class.

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