For the first time in over 25 years, I did not vote in the “presidential preference primary” last month. I don’t know about you but I am already tired of this year’s election.
After months of negative campaigning, Mitt Romney appears to have the GOP nomination sewed up. His attention already is focused on differentiating himself from the incumbent, Barak Obama, who has been fundraising and campaigning at taxpayer expense for over a year.
An example of politicians pandering to voters in this year’s election cycle is the so-called “Buffet Rule”. Our own ultra-left Senator Sheldon Whitehouse carried the water for the Democrats in this legislation. Obama and Whitehouse’s bill would impose a tax rate of 30 percent on those making over a million dollars a year. It failed to get the necessary 60 percent majority in the Senate vote.
The bill is named for multi-billionaire octogenarian Warren Buffet who claims he is disturbed because his secretary, who sat next to Michelle Obama during the last State of the Union address, pays a higher tax rate than he does.
When asked how much he pays his secretary whom he had dragged into the public eye and what her tax rate is, Buffet declared that he wanted to protect her privacy. To further illustrate this man’s hypocrisy, it should be noted that he is currently fighting the IRS, which says Buffet owes the treasury about a billion more in taxes.
Progressives say what matters is what their respective tax rates are; conservatives claim that the comparison should be how much in taxes each pays.
According to tax returns filed for 2009, the most recent data available, the IRS says the top one percent of all taxpayers paid 36.7 percent of the total income taxes collected with an average tax rate of 24 percent. To be in the top one percent, you would have to have an adjusted gross income of $343,927 – a far cry from a million dollars plus. To be in the top 10 percent of all taxpayers, your adjusted income would have to be in excess of $112,124, which may surprise some.
In contrast, the bottom 50 percent of taxpayers paid a mere 2.3 percent of all taxes, with 47 percent paying no income tax at all! The average tax rate on this lower half of tax filers was 1.85 percent.
After sponsoring the Buffet Rule bill, Senator Whitehouse refused to release his latest tax return as did our Democrat House Representatives Jim Langevin and David Cicilline. Senior Senator Jack Reed did release his joint return.
Dividends and capital gains are taxed at 15 percent. It is important to keep in mind that dividends are not tax deductible by the company that pays them. Therefore, they are taxed once at the corporate level and again on the income tax returns of the individuals that receive them. How many times do progressives want to tax the same income?
The reason why Warren Buffet is “only” taxed at the 15 percent rate is that most of his income is from the companies he invests in. And don’t for a minute think Buffet doesn’t pay his secretary a big bucks salary that is taxed at higher than ordinary income rates.
This whole “tax the rich” theme is an indication that, without a record of accomplishment to run on, Obama and the Democrats intend to wage a campaign based on class envy and populism.
n I attended Operation Clean Government’s Candidate Forum 2012 last Saturday. The closing speaker was General Treasurer Gina Raimondo, who spoke about running for state-wide office for the first time and her fight for pension reform.
As predicted in this column last year, the public employee union minions in the legislature are already trying to circumvent some of the reforms. Senate Majority Leader and Laborers International Union poobah Dominick Ruggerio has introduced a bill that would reverse the suspension of annual COLAs for state retirees.
In the House, retired North Kingstown fireman Scott J. Guthrie (D-Coventry) introduced a bill that would block municipalities from moving employees, including town managers, from the Municipal Employees Retirement System into other retirement plans such as 401(k)s. Rep. John M. Carnevale (D-Johnston), a retired Providence police officer, introduced a bill that would suspend a provision of pension reform that requires police and firefighters to wait until age 55 to begin collecting a pension.
A panel discussion moderated by former auditor general and potential candidate for governor Ernie Almonte included Providence Mayor Angel Tavares and NEA-RI honcho Bob Walsh. Moderator Almonte and Mayor Tavares talked about how close Providence is to either state receivership or bankruptcy without changes to union pensions, particularly the exorbitant COLAs enjoyed by some retirees.
Mr. Walsh, in a typical display of arrogance, pooh-poohed the whole idea of pension reform as being based of faulty assumptions. All we have to do, he said, was increase the taxes paid by “the rich”.
One of the forum’s attendees challenged that position saying taxpayers cannot afford to pay more and more, year after year. Walsh dismissively replied that was the attendee’s “perception of reality”. Mr. Walsh said his reality was that taxpayers should be willing to pay whatever it takes to educate our kids properly, get the government services we all need and compensate public employees well.
Mr. Walsh said that public employee unions will challenge any reforms in court because “pensions are a contractual obligation”.
Richard August is a North Kingstown resident and a regular contributor to the Standard Times. His opinions are his own.