If elections indeed have consequences, then rich people’s taxes must rise.
We had an election a couple of weeks ago. It was a really big one with about 120 million Americans participating.
The Democratic side advocating higher taxes on wealthy people put a significant whipping on the Republican side advocating no higher taxes on wealthy people.
It was not a landslide. I didn’t say it was. I said it was a significant whipping.
The returns are not difficult to read and the logical conclusions are not hard to reach.
President Barack Obama, advocating higher taxes for the rich, got around 4 million more votes than Mitt Romney, a billionaire who paid a minuscule effective tax rate himself and stood firmly for keeping it that way.
The U.S. Senate went from a 53-47 advantage for the Democratic side advocating higher taxes on the wealthy to a 55-45 advantage.
The U.S. House of Representatives stayed under control of the Republican side advocating that rich people not pay a fair share of taxes because that would harm “job creation.” But the Republicans lost eight seats in that majority and would have lost more except that they had redrawn districts to protect incumbents. Cumulatively nationwide, the GOP’s House candidates received a million fewer votes than the Democratic candidates.
So now we face the “fiscal cliff” that seems to command, or at least strongly invite, some major budget deal by the end of the year. And Republicans are still saying the only increased revenue they will support must come in the form of plugged loopholes, not higher tax rates.
They say it would send small businesses reeling to increase the marginal rate on household incomes exceeding $250,000 from 35 percent to the supposedly onerous 39 percent level of the go-go Clinton era.
May I translate? What they are really saying is that they signed that contemptible pledge from that right-wing, Koch-allied bulldog, Grover Norquist.
You know the pledge they mean—the one not to raise taxes. And what they are really saying is that they might get GOP primary opposition and maybe lose if they broke that pledge. And they think that would be bad—their losing to a right-wing kook who would then get beat by a Democrat.
This small-business argument is bogus. A tiny percentage of small-business owners in this country nets more than a quarter-million dollars in personal income.
If small-business owners do, in fact, make that much, then their small businesses are hardly hamstrung by tax policy. To the contrary, they are having fabulous years. Even then, they only pay the higher rate on the margin in excess of $250,000.
That’s essentially what Warren Buffett was telling CNN the other day. For goodness sakes, he said, the American economy has thrived with much higher marginal rates on top incomes than 39 percent.
Buffett also said—and this is most interesting—that the current American economy is entirely too resilient to collapse immediately if members of Congress can’t agree on a plan for fiscal-cliff avoidance by the end of the year.
Some Democrats have begun referring to the fiscal cliff as a “fiscal staircase” on which the economy could walk down incrementally and safely after the first of the year.
Liberal columnist Paul Krugman advocates, actually, that the Democrats invite that cliff, or staircase, to leverage negotiations early next year.
His point is that the American electorate has spoken in the Democrats’ favor. It is that the economy would not instantly crash if the Democrats let the Republicans wreak their wealth-protecting havoc. It is that Republicans would have to concede if taxes went up on everybody and draconian automatic spending reductions put the country on a recession-bound course.
Maybe then, so the thinking goes, a few Republicans would be willing to tear up their no-tax pledges and tell Norquist where to get off.
The far more responsible course is to do a deal by the end of the year, one with deep, but responsible spending cuts and either a higher marginal rate at $250,000 or at least a so-called Buffett Rule imposing a minimum effective tax rate of 30 percent on annual million-dollar incomes.
The onus is appropriately on House Speaker John Boehner to round up a couple of dozen sane and personally responsible House Republicans—just a couple of dozen—to get such a deal done.
John Brummett’s column appears regularly in the Arkansas Democrat-Gazette. Email him at jbrummett@arkansasonline.com. Read his blog at brummett.arkansasonline.com.