Tuesday Reads: Obama’s Deficit-Reduction Plan, Backsliding Obots, Rev. Wright, and Dr. Doom

Posted: September 20, 2011 | Author: | Filed under: American Jobs Act, Barack Obama, Democratic Politics, Domestic Policy, Global Financial Crisis, income inequality, Medicaid, Medicare, morning reads, Social Security, U.S. Economy, U.S. Politics | Tags: , , , , , , , , , , , | 45 Comments

Good Morning!! Let’s see what’s happening in the news today.

Well, of course the Obama apologists are claiming that he has suddenly grown a backbone of steel and become the liberal messiah they all dreamed of in 2008. I already told you about Ezra Klein’s delusional column last night. The other usual suspects are also getting leg tingles, and former Obots are starting to backslide.

Greg Sargent has put on his rose-colored glasses and taken a few swigs of LSD-laced Koolaid:

This has to be the clearest sign yet that Obama has taken a very sharp populist turn as he seeks to frame the contrast between the parties heading into 2012. During his remarks this morning, Obama directly responded to Republicans accusing him of “class warfare,” but rather than simply deny the charge, he made the critical point that the act of protecting tax cuts for the rich is itself class warfare, in effect positioning himself as the defender of the middle class against GOP class warriors on behalf of the wealthy.

Wow! I’ll bet it never occurred to anyone that income inequality equals class warfare until Obama figured it out. Amaaaazzzzing!!

A senior administration official tells me that parts of Obama’s “class warfare” broadside were ad-libbed. Here’s the key chunk — and it’s a script that could have been written by just about any card-carrying member of the “professional left:”

Warren Buffett’s secretary shouldn’t pay a higher tax rate than Warren Buffett. There’s no justification for it. It is wrong that in the United States of America, a teacher or a nurse or a construction worker who earns $50,000 should pay higher tax rates than somebody pulling in $50 million…
We’re already hearing the usual defenders of these kinds of loopholes saying, “this is just class warfare.” I reject the idea that asking a hedge fund manager to pay the same tax rate as a plumber or a teacher is class warfare. I think it’s just the right thing to do. I believe the American middle class, who’ve been pressured relentlesly for decades, believe it’s time that they were fought for as hard as the lobbyists and some lawmakers have fought to protect special treatment for billionaires and big corporations.
Nobody wants to punish success in America … All I’m saying is, that those who have done well, including me, should pay our fair share in taxes to contribute to the nation that made our success possible.

Holy sh*t!! Obama ad libbed? Hope ‘n’ change! Change we can believe in! I guess it’s just me, but I thought that speech sounded kind of weak and defensive. But what do I know?

Booman has an even better rationalization for Obama’s behavior than Beltway Bob Ezra Klein. According to the ever-gullable Booman,

…the president has a lot more credibility now when he takes his ideas to the public and says the the Republicans aren’t interested in compromise. You have to try and fail to get a compromise before that argument has any resonance. It’s not so much 11-Dimensional chess as basic common sense. Everyone’s poll numbers suffered during the summer, but no one’s standing was weakened more the Republicans’. That’s not an accident.

So Obama must have planned this. The man is brilliant!!

Digby says Obama is in campaign mode and that’s why he’s trying to sound strong and determined.

My first thought is that it appears the administration has finally decided that there’s nothing to be gained with exclusively delivering post-partisan pablum. It certainly sounds as though he’s thrown down the gauntlet. Unfortunately, the President appears to want to have two fights going into this election, one over job creation and one over whose plan to cut the deficit is better, which I think is a confusing waste of time. (Focus like a laser beam on jobs and tell the Republicans they’ll have to go through you to get to the safety net and I think people would instinctively understand that he’s on their side.) But that isn’t this president’s style and perhaps it wouldn’t be believable if he did it. So, this is at least a change of tactics, more confrontational in tone, which is his best hope for reelection since it turns out people aren’t really all that impressed that he’s the most reasonable guy in the room if it appears that he gets punk’d every time.

Digby things the proposed Medicare cuts are a loser politically, though–especially for Congress members running for reelection.

Jon Walker at FDL was “pleasantly surprised” that Obama didn’t call for Social Security cuts or “any specific major cuts to Medicare benefits,” but he hasn’t gone back on the Koolaid.

This is a positive development. Having President Obama publicly call for major cuts in Medicare benefits or change in age eligibility would have been terrible for our senior citizens and a total political disaster for the Democratic party. But it is important to remember: simply because the president did not put such cuts on the table doesn’t mean he took these cuts off the table.

President Obama has already privately signaled that in theory he would be willing to support major cuts to Medicare. And he’s hinted he’d be willing to cut Social Security benefits. They were both earlier put the table for a theoretical deal and this speech didn’t take them off the table. There was no veto threat to protect Medicare and Social Security benefits.

Actually, there do seem to be specific proposed cuts to Medicare. Jonathan Cohn breaks down the detail of the President’s deficit reduction proposal in a very technical piece that you can read if you’re interested. According to Cohn,

President Obama’s new deficit reduction plan includes about $320 billion in cuts to government health care programs. Most of the cuts from Medicare and that is sure to get a lot of people’s attention, if not now then in the presidential campaign.

But these reductions are less severe, and less worrisome, than some of the proposals Obama indicated he was willing to support over the summer, while he was negotiating with House Speaker John Boehner. In particular, Obama did not call for increasing the Medicare eligibility age from 65 to 67, as folks like me feared he would.

In fact, the cuts Obama has in mind are more or less consistent with the kind of cuts that you find in the Affordable Care Act: They are reductions designed to change the way Medicare pays for treatment and services, ideally (although not always) in ways that will actually improve the efficiency or quality of care. To the extent they would force individual seniors to pay more, it’d be in the form of higher premiums from wealthy seniors or higher co-pays for treatments likely to be unnecessary or wasteful.

For a reminder of who Obama really is, I’ll turn to Glenn Ford at the Black Agenda Report. His post was written a few days ago–before today’s speech–but I still think he has Obama’s number.

The GOP can count on Obama to offer up Social Security on the alter of austerity, as he has done consistently since January, 2009, while still president-elect. Back in April, he proposed $4 trillion in cuts over 12 years – nearly as draconian as his hand-picked committee – with the focus on the safety net. “By 2025,” warned the apocalyptic and grossly misleading president, “the amount of taxes we currently pay will only be enough to finance our health care programs, Social Security, and the interest we owe on our debt.”

Obama promises that his grab-bag, mostly supply-side and wholly inadequate jobs scheme will largely be “paid for” by cuts that include “modest adjustments [hah!] to health care programs like Medicare and Medicaid.”

Social Security stands to be mortally wounded at Obama’s hand. His second round of cuts in the payroll tax further undermine, not just the program’s trust fund, but its status as a free-standing entity outside of the usual congressional process. Congress will, theoretically, make up the temporary shortfall in payroll taxes through appropriations. But that puts Social Security in the middle of the budget deficit debate, where it does not belong and from which it has been purposely shielded since its origins in President Franklin Roosevelt’s New Deal. Through rhetoric and calculated action, Obama has for the past two and a half years been in league with Republicans in falsely conflating Social Security and the federal debt. He is now positioned to knock the program from its protective pedestal.

The Social Security cuts are already taken care of as long as the GOP goes along with extending the payroll tax holiday. The more money Obama can suck out of the Social Security trust fund, the more likely he can “reform” the Social Security into a welfare program or Wall Street ATM.

If Obama succeeds, Social Security will become just another “entitlement” to be mangled in a grand bargain with the GOP, like Medicare and Medicaid. Obama wants to be remembered as the president who brought the Republicans and the right wing of the Democratic Party into harmonious consensus – over the dead carcass of the New Deal. That’s what he means by “Go big!”

Chris Hedges has another excellent article up at Truthdig. It’s an interview with Obama’s former pastor and spiritual adviser: “The Rev. Jeremiah Wright Recalls Obama’s Fall From Grace.” I know not everyone will agree with Hedges’ point of view, but I mostly do. As outlandish as Wright was made to seem in the media, I couldn’t fault much of what I heard him say about America and racism. It’s a lengthy article, but I hope you’ll take a look at it.

One of the things Wright discussed with Hedges was the Martin Luther King Memorial in Washington DC. Wright himself raised $200,000 for the project.

“I think it’s a wonderful thing that the country would recognize someone as important as Dr. King,” Wright said when I reached him by phone in Chicago, “and recognize him in a way that raises his likeness in the Mall along with the presidents. He’s not a president like Abraham Lincoln or George Washington. But to have him ranked among them in terms of this nation paying attention to the importance of his work, that’s a good thing.”

“I read Maya Angelou’s piece about the way the quote was put on the monument,” Wright said in referring to the editing of a quote by King on the north face of the 30-foot-tall granite statue. The inscription quote reads: “I was a drum major for justice, peace and righteousness.” But these are not King’s words. They are paraphrased from a sermon he gave in which he said: “If you want to say that I was a drum major, say that I was a drum major for justice. Say that I was a drum major for peace. I was a drum major for righteousness. And all of the other shallow things will not matter.” Angelou said the mangled inscription made King sound “arrogant.”

“I read the explanation as to why we couldn’t include the whole quote,” said Wright, who helped raise $200,000 for the monument. “Kids a hundred years from now, like our pastor who was born three years after King was killed, they’re going to see that and will not get the context. They will not hear the whole speech, and that will be their take-away, which is not a good thing. My bigger problems, however, have to do with all the emphasis on ’63 and ‘I Have a Dream.’ They have swept under the rug the radical justice message that King ended his career repeating over and over and over again, starting with the media coverage of the April 4, 1967, ‘A Time to Break Silence’ message at the Riverside Church [in New York City]. King had a huge emphasis on capitalism, militarism and racism, the three-headed giant. There is no mention of that, no mention of that King, and absolutely no mention of the importance of his work with the poor. After all, he’s at the garbage collectors strike in Memphis, Tenn., when he is assassinated. The whole emphasis on the poor sent him to Memphis. But that gets swept away. It bothers me that we think more about a monument than a movement. He had a movement trying to address poverty. It was for jobs, not I Have a Dream, not Black and White Together, but that gets lost.”

He’s right. The powers that be have worked for years to minimize King’s work to end the Vietnam war as well as his determination to wipe out poverty. It’s interesting that this is the second time King has been misquoted on Obama’s watch.

This post is already too long, so I’ll end with an article by Dr. Doom (Nouriel Roubini): Eight drastic policy measures necessary to prevent global economic collapse. None of them will be popular. The first recommendation is that

we must accept that austerity measures, necessary to avoid a fiscal train wreck, have recessionary effects on output. So, if countries in the Eurozone’s periphery such as Greece or Portugal are forced to undertake fiscal austerity, countries able to provide short-term stimulus should do so and postpone their own austerity efforts. These countries include the United States, the United Kingdom, Germany, the core of the Eurozone, and Japan. Infrastructure banks that finance needed public infrastructure should be created as well.

Read the rest and weep. Our current “leaders” aren’t likely to pay any attention.

So sorry if I depressed you with that one. What are you reading and blogging about today?

Beltway Bob Rationalizes Obama’s Blunders, while Michael Tomasky Sees a “Scared President”

Posted: September 19, 2011 | Author: | Filed under: Medicaid, Medicare, Social Security, Team Obama, U.S. Economy, U.S. Politics, voodoo economics | Tags: , , , , , , , , , , , , , | 25 Comments

Beltway Bob

Okay, I realize that is a silly title, but after reading Beltway Bob’s Ezra Klein’s latest post and then reading the transcript of Barack Obama’s Rose Garden speech from this morning, I was feeling a little bit punchy.

Dakinikat recently called Ezra Klein “Beltway Bob,” or the Bagdad Bob of the Beltway. That’s a perfect name for Klein, who is apparently way too young to remember anything about politics before about 1990. The guy is naive beyond belief. Lately he seems to see his role as explaining away all of Obama’s blunders, usually by arguing that the President is just too good and moral for the rough and tumble of politics.

This morning, Klein set out to explicate the “deficit reduction plan” that Obama announced in his speech this morning. Specifically, Klein wanted to explain “why the White House changed course.”

President Obama’s deficit-reduction plan (pdf)
is most interesting for what’s not in it. It does not cut Social Security by “chaining” the program’s cost-of-living increases. It does not raise the eligibility age for Medicare from 65 to 67. Nor does it include any other major concessions to Republicans. Rather, the major compromise it makes is with political reality — a reality that the White House would prefer not to have had to acknowledge.

Since the election, the Obama administration’s working theory has been that the first-best outcome is striking a deal with Speaker John Boehner and, if that fails, the second-best outcome is showing that they genuinely, honestly wanted to strike a deal with Speaker John Boehner.

That was the thinking that led the White House to reward the GOP’s debt-ceiling brinksmanship by offering Boehner a “grand bargain” that cut Social Security, raised the Medicare age, and included less new revenue than even the bipartisan Gang of Six had called for. It was also a theory that happened to fit Obama’s brand as a postpartisan uniter and his personal preferences for campaigning on achievements rather than against his opponents. But though it came close to happening, the “grand bargain” ultimately fell apart. Twice.

The collapse of that deal taught them two things: Boehner doesn’t have the internal support in his caucus to strike a grand bargain with them, and the American people don’t give points for effort.

Very likely you’re asking yourself, “What the heck does that mean?” I certainly was when I first read it. Is this guy trying to tell us that no one in the White House understood until recently that Boehner had a bunch of looney-tunes tea party reps to deal with? Is he really trying to convince us that–after all those years in Illinois politics and his admittedly short time in national politics–that Obama and/or his advisers actually did not understand that voters expect results, not “just words?”

The answer is “yes.” Beltway Bob does expect you to believe that. The rest of his column is devoted to explaining in great detail that Obama and his advisers actually believed that voters would be thrilled if he made nice with Republicans even if it meant selling out every Democratic ideal–that if the President “looked like a nice guy,” the voters–especially Independents, I guess–would rush to the polls to reelect him.

But now, according to Beltway Bob, the White House staff and the President understand that they made a huge mistake: “the second-best outcome isn’t necessarily looking like the most reasonable guy in the room. It’s looking like the strongest leader in the room.” So that’s why Obama threatened to veto any plan that cuts Medicare or Medicaid and he has for now supposedly taken Social Security off the table. It’s all so sad, according to Beltway Bob–poor Barack has had to go back on all his ideals (those ideals apparently being that he wanted to a great compromiser, while caring nothing about the effects of his compromises) and accept “politics as usual.” Boo-hoo-hoo.

Rather than emphasizing his willingness to meet Boehner’s bottom lines, which was the communications strategy during the debt ceiling showdown, he’s emphasizing his unwillingness to bend on his bottom lines.

That isn’t how the White House would prefer to govern. It’s not how they would prefer to campaign. It is, let’s admit it, politics-as-usual. It’s the triumph of the old way of doing things, an admission that Washington proved too hard to change. But it’s also the only option they have left.

Ezra Beltway Bob can’t seem to recall the hundreds of times that Obama has vowed to draw lines in the sand and then quickly backtracked–not to mention all the Campaign promises he went back on. But why on earth should anyone with a functioning memory believe this hogwash?

Frankly, IMHO, if Obama has in fact taken Social Security, Medicare, and Medicaid changes off the table–which I strongly doubt–it’s probably because he’s scared silly that Americans are finally seeing through his lies.

If you read the transcript of Obama’s speech, you’ll see that he sounds defensive, hesitant, scared of his own shadow. This morning he called for the wealthy to pay at least 20% of their income in taxes. We are supposed to buy that that is a tax increase. Yet under Bush, the wealthiest Americans were supposed to pay 35%, already an unconscionably low rate–why not make them pay that much at least?

Michael Tomasky

Because our President is a scaredy cat, that’s why! I think the change–if it’s real–has everything to do with the news that has come out about Ron Suskind’s new book Company Men, which will be released tomorrow. The news reports about the book make Obama sound like a weak, passive, detached executive who lets his underlings push him around. Michael Tomasky at the Daily Beast calls him “The Scared President.”

Tomasky notes that he was persuaded by what Suskind wrote about the Bush administration in a previous book.

I’m on record as taking Suskind at his word in such matters. In early 2004, when Suskind and Bush Treasury Secretary Paul O’Neill produced The Price of Loyalty, I reviewed it for The New York Times and found it persuasive.That book was the first to confirm what everyone knew anyway: that the Bush White House was run according to politics, not policy. Confidence Men also confirms what we knew about Obama’s White House: that the president appointed the wrong economic team from the start, failed to crack down on the banks, and was Solomonic to a fault when formulating responses to the financial crisis (oh, and news flash: Larry Summers is hard to work with!).

That would be interesting without being shocking. But the indictment goes one mortifying step deeper: Geithner and Summers and Rahm Emanuel, and perhaps others, sometimes ignored Obama, refused to carry out his orders, and, in Summers’s case, mocked him, saying at one point to then-Budget Director Peter Orszag that “there’s no adult in charge” in the White House. And while I don’t yet know whether Suskind emphasizes this point, let’s carry the critique one step further: They did so, as far as we know, without suffering any consequences at all.

No matter how much the White House tries to deny the details that have come out on Suskind’s book, the overall takeaway is that Obama is weak and indecisive. And that is the impression that most Americans have about him already, so why should they disbelieve it? Tomasky:

That’s the problem the book reveals. Adam Moss and Frank Rich of New York magazine did get an early copy and read it, and in an online dialogue posted over the weekend, they home in on what Rich calls Obama’s “intellectual blind spot.” Obama even recognized it himself, telling Suskind he was too inclined to look for “the perfect technical answer” to problems; Rich quotes Suskind as writing that Obama always favored policies that were “respectfully acknowledging opponents’ positions, even those with thin evidence behind them, that then get stitched together into some pragmatic conclusion—but hollow.”

That sounds awfully apt to me. Obama was afraid to be the president. He listened to a dozen viewpoints and tried to come up with something that made everyone happy. Unfortunately, “everyone” included people on his team who were looking out for the banks more than for the public (or for their own boss), and it included people on Capitol Hill whose clear agenda was Obama’s political destruction. It’s the central—and depending on how the next election turns out, possibly decisive—paradox of this president: In trying way too hard to look presidential in the sense of “statesmanlike,” he has repeatedly ended up looking unpresidential in the sense of not being a leader.

Obama wasn’t ready to be President in 2008, and he still isn’t. Tomasky claims to have hopes that Obama can turn it around, but I think it’s just too late. There have been too many lies, too many betrayals of campaign promises, too many sellouts to Wall Street and the Republicans, and too many reversals of supposed lines in the sand.

Perhaps if Obama were capable of followingJames Carville’s advice and fired most of his staff and stood up to Wall Street and the Republicans, as Tomasky hopes. But Obama simply can’t do it. He’s too weak and inexperienced.

Whether you look at Obama through the eyes of Beltway Bob and conclude that this President is just too good and holy for “politics as usual” or through the eyes of Tomasky and conclude that Obama is scared of his own advisers and of Republicans in Congress, this man is simply not qualified for the office he holds. Obama must go. There is no other realistic solution to the country’s problems.

Obama’s America: “Midnight in a Coal Mine”

Posted: September 18, 2011 | Author: | Filed under: 2012 presidential campaign, Barack Obama, Democratic Politics, Economy, Foreign Affairs, Hillary Clinton, U.S. Economy, U.S. Politics | Tags: , , , , | 7 Comments

Midnight shift at a Virginia coal mine

I’m sure this guy must be a conservative, but his column is the funniest thing I’ve read in ages! Steve Chapman at The Chicago Tribune on “Why Obama Should Withdraw”:

When Ronald Reagan ran for re-election in 1984, his slogan was “Morning in America.” For Barack Obama, it’s more like midnight in a coal mine….The vultures are starting to circle. Former White House spokesman Bill Burton said that unless Obama can rally the Democratic base, which is disillusioned with him, “it’s going to be impossible for the president to win.” Democratic consultant James Carville had one word of advice for Obama: “Panic.”

But there is good news for the president. I checked the Constitution, and he is under no compulsion to run for re-election. He can scrap the campaign, bag the fundraising calls and never watch another Republican debate as long as he’s willing to vacate the premises by Jan. 20, 2013.

That’s exactly what I’ve been recommending for awhile now: Obama needs to do an LBJ and step aside in favor of someone competent, someone who can win. Chapman even has a suggestion.

America's most popular political figure

The ideal candidate would be a figure of stature and ability who can’t be blamed for the economy. That person should not be a member of Congress, since it has an even lower approval rating than the president’s.

It would also help to be conspicuously associated with prosperity. Given Obama’s reputation for being too quick to compromise, a reputation for toughness would be an asset.

As it happens, there is someone at hand who fits this description: Hillary Clinton. Her husband presided over a boom, she’s been busy deposing dictators instead of destroying jobs, and she’s never been accused of being a pushover.

Not only that, Clinton is a savvy political veteran who already knows how to run for president. Oh, and a new Bloomberg poll finds her to be merely “the most popular national political figure in America today.”

Isn’t it amazing how many people are proposing the same solutions to America’s problems these days?

Obama calls for Taxing Millionaires at Middle Class Rates; Republicans Panic

Posted: September 18, 2011 | Author: | Filed under: Team Obama, The Bonus Class, U.S. Politics | Tags: , | 4 Comments

In yet another move messaged as “bold” but actually typically spineless as far as returning policy from the Bush years to reality goes, Obama has called for taxing millionaires. The problem is that this doesn’t return our tax system to even the Reagan concept of a progressive tax system.  Obama wants millionaires to pay taxes at the same level as median tax earners. How friggin’ bold is that?  That means, millionaires would get taxed at the same rate as people that make about $50,000 a year which is around 20%. The problem is that’s lower than tax tables in the law now enacted by Ronald Reagan.  The “Buffet Rule” makes Ronald Reagan’s tax reform look downright socialist.

Mr. Obama, in a bit of political salesmanship, will call his proposal the “Buffett Rule,” in a reference to Warren E. Buffett, the billionaire investor who has complained repeatedly that the richest Americans generally pay a smaller share of their income in federal taxes than do middle-income workers, because investment gains are taxed at a lower rate than wages.

Mr. Obama will not specify a rate or other details, and it is unclear how much revenue his plan would raise. But his idea of a millionaires’ minimum tax will be prominent in the broad plan for long-term deficit reduction that he will outline at the White House on Monday.

Mr. Obama’s proposal is certain to draw opposition from Republicans, who have staunchly opposed raising taxes on the affluent because, they say, it would discourage investment. It could also invite scrutiny from some economists who have disputed Mr. Buffett’s assertion that the megarich pay a lower tax rate over all. Mr. Buffett’s critics say many of the rich actually make more from wages than from investments.

In a speech on Thursday, Speaker John A. Boehner, Republican of Ohio, agreed with Mr. Obama that the deficit-reduction committee “can tackle tax reform, and it should,” to get rid of many tax breaks and allow for lower marginal rates.

“Tax increases, however, are not a viable option for the joint committee,” Mr. Boehner said. Instead, he emphasized that meeting the deficit-reduction target should come largely from overhauling benefit programs like Medicare, Medicaid and Social Security.

So, we’re getting this packaged as the “Buffet Rule”.  Score one for attempted messaging. Subtract major points for substance.  Let me just quote a turn of phrase from Robert Reich which is the QOTY as far as I’m concerned.

So when the President refers to his new initiative to raise taxes on millionaires as the “Buffett rule” we might expect he’d start the bargaining from a tough position.

But this is Barack Obama, whose idea of negotiating is to give away half the house before he’s even asked the other side for the bathroom sink.

But, let me get back to the idea that Ronald Reagan was a socialist using Reich’s analysis.  I’m really glad he crunched the numbers so I don’t have to.

America’s median income is about $50,000. The typical taxpayer at that level pays approximately 20 percent in taxes.

Granted, that’s a higher rate than most of today’s super rich pay because of countless deductions, credits, and loopholes – including, especially, their ability to take their incomes in the form of capital gains, taxed at 15 percent. That’s a big reason Buffett’s hundreds of millions a year are taxed at just over 17 percent — a lower rate than his secretary faces, as Buffett often says.

But a 20 percent rate is still ridiculously low compared to what millionaires and billionaires ought to be paying. Officially, income over $379,150 is supposed to be taxed at 35%.

And even 35 percent is a pittance compared to the first three decades after World War II. Before Ronald Reagan slashed taxes on the rich in 1981, the highest marginal tax rate was over 70 percent. Under Dwight Eisenhower it was 91 percent. Even if you include deductions and credits, the rich are now paying a far lower share of their incomes in taxes than at any time since World War II.

The estate tax (which only hits the top 2 percent) has also been slashed. In 2000 it was 55 percent and kicked in after $1 million. Today it’s 35 percent and kicks in at $5 million. Capital gains – comprising most of the income of the super-rich – were taxed at 35 percent in the late 1980s. They’re now taxed at 15 percent.

Meanwhile, the top 1 percent’s share of national income has doubled over the past three decades (from 10 percent in 1981 to well over 20 percent now). The richest one-tenth of 1 percent’s share has tripled. And they’re doing better than ever. The last time the top 1 percent got that much was in the roaring 1920s.

So much money is now concentrated at the top that what we really need are more tax brackets at the high end, higher marginal rates in each bracket, and a tax code that treats all sources of income – whether ordinary or capital gains – the same.

I hate to say this again and again, but here we go.  That last sentence is important.  Buffet, Soros, and friends live off of capital gains income.  Unless you deal with the capital gains tax, you’re not really going to impact the really really rich dudes.  If they make it from a salary, they’re paying a 35% percent marginal tax rate.  Their stock options with appreciation only get taxed at 15%. You have to apply the tax rate to capital gains to really get at their revenues.  So, how is this plan going to attack the major source of income for the richest of the rich?  It’s not! But that’s not stopping the morality-impaired Republicans from screaming class warfare.

Republicans Sunday criticized President Obama’s plan to call for a new minimum tax rate on millionaires as “class warfare” that would do little to create new jobs and instead would hurt the small businesses that drive the economy.

“Class warfare. . .may make for good politics, but it makes a rotten economics,” Rep. Paul Ryan (R-Wisc.), chairman of the House budget committee, said on “Fox News Sunday.” “We don’t need a system that seeks to divide people. . .We need a system that creates jobs and innovation.”

There’s some excellent analysis over at WAPO on the tax loopholes that have evolved over the last 25 years since the last time the tax code was reformed.  It shows how much tax breaks really go out to all levels of incomes already.  Many of them benefit middle income earners as much as wealthier individuals.  Upper middle class families–those earning in the $100,000 – $300,000 level–get an incredible amount of tax largess right now. By not limiting some of the more pedestrian tax breaks to lower income families and by giving special consideration to capital gains, we lose a lot of revenues from truly well-off individuals. These ideas have not been put on the table by the President.

The number of tax breaks has nearly doubled since the last major tax overhaul 25 years ago, with lawmakers adding new benefits for children, college tuition, retirement savings and investment. At the same time, some long-standing breaks have exploded in value, such as the deduction for mortgage interest and the tax-free treatment of health-insurance premiums paid by employers.

All told, federal taxpayers last year received $1.08 trillion in credits, deductions and other perks while paying $1.09 trillion in income taxes, according to government estimates.

Only about 8 percent of those benefits went to corporations. (The write-off for corporate jets equals about .03 percent of the total.) The bulk went to private households, primarily upper-middle-class families that Obama has vowed to protect from new taxes.

“The big money is in the middle-class subsidies,” said Syracuse University economist Leonard Burman, former director of the nonpartisan Tax Policy Center. “You’re not going to balance the budget by eliminating ethanol credits. You have to go after things that really matter to a lot of people.”

I’ve just basically come to the conclusion that the Bush tax cuts should expire for every one at this point.  But, if the president is truly interested in going after the big money–which is a fine idea–he needs to quit coming to the table with piddling suggestions.  Capital gains need to be taxed like normal income, for one.  Giving them preferential treatment has just subsidized Wall Street Gambling as far as I’m concerned and provided a huge tax benefit for the richest of the rich.  Again, this Obama plan makes the Reagan Tax reform look socialist.  The fact that Republicans are screaming about it on the Sunday New Shows demonstrates just how extreme our policies have gotten in terms of benefiting the donor class these days.  What a mess!!!

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