Speaking of Warren Buffett’s call for higher taxes on the mega-rich (to wit: those earning over one million dollars per year) and the knee-jerk response that it constitutes “class warfare”, here’s Mike Arrington’s response:
What I really didn’t understand until recently though is why so
many rich Americans seem to loathe their richness as much as
everyone else does. Many in Silicon Valley want to tax the rich
into the middle class and let government spend and spend and
spend. The super rich tech elite flock to Obama, joining in
the call to screw the rich as loudly as all the rest.
What a crock of shit. The calls for raising taxes on the wealthy — or for simply allowing the Bush tax cuts to expire — are about restoring tax rates to those of the Clinton administration. Bill Clinton oversaw the best economy in recent U.S. history. Every income group did well, including the wealthy, and the U.S. budget was balanced. One can dispute the causes and effects of the 1990s U.S. economy. Republicans like to argue today that the economy did well under Clinton despite the higher tax rates on the wealthy. But here are three facts: (1) tax rates on the wealthy were higher then than now; (2) the economy thrived then and has suffered ever since; (3) Clinton left office with a balanced federal budget.
No marginal income tax increase, no matter how extreme, would “tax the rich into the middle class”. Marginal tax rates apply only to the last dollar. So even if the U.S. instituted an Eisenhower-era 91-percent income tax on income over $1 million, those earning over that amount would only pay that rate on income after the first million earned. If you want to argue that tax rates on the super-wealthy are already high enough, fine. But don’t argue that Buffett’s proposal, or a restoration of Clinton-era tax rates, amounts to “soaking the rich” or “screwing the rich” or “taxing the rich into the middle class”. It’s sophistry.
It’s easy to understand why the rich tech elite support Democrats on economic issues. They’re smart enough to wish we could return to an economy like we had under Bill Clinton.
★ Friday, 19 August 2011