Sean Bielat, Republican candidate for Barney Frank’s congressional seat, held a conference call for bloggers last night. I know very little about either candidate – Sean Bielat vs Joe Kennedy III so I thought I’d listen in. I can’t say I learned a lot, but it was a good introduction to the candidate. My (admittedly uninformed) observations from the call were:
* Sean Bielat has a strong bio as a businessman and a US Marine and that he’s trying to contrast that with Joe Kennedy’s apparently thinner resume.
* He’s emphasizing that he has clear policy positions and that so far Kennedy has been mostly silent on policy. Note: his communication director pointed out that Kennedy’ silence on policy has already been raised on Village14.
* The newly redrawn 4th district is much more favorable towards Republicans then the previous district map.
* They plan to use social media heavily in the coming race and have various, as yet unannounced, interesting plans for doing so. They believe that the key to winning the race is a bottoms up, grassroots effort and that social media will be central to that.
As for his general campaign themes and message I’d characterize them, probably unfairly, as Republican Light, or Mass Republican, not unlike Scott Brown. The general messages were pretty consistent with the national Republican party, with some of the edges taken off for local MA consumption.
Personally, his policies did not strike a chord with me … but then I’ve rarely voted for Republicans and I’m unlikely to be his target audience, In particular, the number 1 & 2 issues he raised were economy/jobs and the deficit. His number one prescription for economy/jobs was lowering the tax burden on businesses and individuals. Then when speaking about the importance of lowering the deficit there was never any mention of the fact that lowering tax revenue would increase the deficit.
All in all, he sounded like an articulate and good spokesman for the Republican point of view and I suspect he’ll be a formidable candidate.
Decreasing the tax burden on businesses and individuals would likely increase tax revenues, as more people would end up being hired, which would increase the tax base. Also, tax revenues invariably rise when capital gains rates are lowered (because people are more likely to sell stocks and thereby create taxable events).
England recently discovered this when they raised their income tax rates and actually received less revenue as a result.
So don’t give up on Sean yet, Jerry! We need more people like him (or Elizabeth Childs, his primary opponent) in Washington if we are going to turn around this awful economic period we’re in.
Anil wrote:
This just misrepresents our current economic problems. If the cost of hiring were a problem, you’d see inflation, as companies have to raise prices to hire employees to meet demand. Instead, we’ve got next to no inflation and companies with record levels of cash-on-hand. That’s because the problem is low demand. Companies aren’t selling because of unemployment, underemployment, and flat wages for the bulk of people who are fortunate enough to have jobs. The bulk of the American public doesn’t have money to spend. So, companies don’t invest in production.
The cure for low-demand economic woes is to create spenders. The most efficient way is to expand benefits to the poor and to ensure that states and municipalities don’t enact demand-choking layoffs, not tax cuts for the wealthy and tax cuts for corporations. Until demand returns, companies aren’t going to hire workers they don’t need, they’ll just pocket the cash.
Anil, reducing the tax burden on the richest individuals in the nation under Bush 43 is how we got in the mess we are in with a massive debt and deficit (remember the Clinton surplus?). Can’t Repubs come up with something better than trickle down economics to justify 15% effective tax rates for the wealthiest Americans like Mitt Romney? Individual tax rates are the lowest they’ve ever been and without gutting Medicare and Medicaid or defense or all three we are not going to get out of debt. Now Repubs are trying like hell to undo the individual health insurance mandate (which would actually save money), that they were all for before they were against it.
Let’s get the rich to pay their fair share so that we can put people back to work in the public sector as well as the private sector (much of the unemployment rate is the result of public sector layoffs, and many of those layoffs were people of color). It is time to reject the failed tax policies of Grover Norquist and the GOP and get the country back on the right track.
Ted,
The debt under Pres. Obama has increased more in four years than in the eight years under Pres. Bush. The unemployment rate hasn’t been below 8% since Pres. Obama has been President. There are a lot bigger contributors to the mess we’re in than the wealthy. If we confiscated all the income of those making more than a million a year, it still wouldn’t be enough to close the deficit. The obsession with the wealthy might make a good stump speech, but it leads to self defeating economic policy. We need to get past the class warfare rhetoric if we want the country to get back on track. That lowering the tax and regulatory burden on employers will lead to more hiring and more taxpayers is basic economics, not trickle down economics.
The JK3 campaign needs a wake up and a shake up. Hopefully some of the comments on this blog got their attention as well as the attention of the Bielat camp. Seriously Joe, you should be kicking this guys ass. Let’s see some freaking PASSION!!!
I continue to be amazed that when the tax rate was changed to lower the effective tax rate of the wealthiest citizens to well below the middle class (by dropping the capital gains rate) that wasn’t class warfare … but if you suggest that wasn’t a good idea and we might want to revisit that decision – that is class warfare.
Anil you’re right raising the effective tax rate on those making over a million dollars won’t solve the deficit or cure all of our economic problems. It would help though. More importantly, it would restore a much needed element of basic fairness and equity. I have a hard time seeing how any one can defend the wealthiest citizens paying an effective tax rate substantially below the the middle class.
Actually the United States has the most progressive tax structure of any industrialized country.
Nowhere is the political debate over income inequality more detached from reality than the call for the top 1% of American income earners to pay their “fair share.” The Organization for Economic Cooperation and Development (OECD) data on the ratio of the share of income taxes paid by the richest taxpayers relative to their share of income show that the U.S. has the world’s most progressive tax burden.
http://online.wsj.com/article/SB10001424052702303816504577305302658158454.html
@Brian – your post says that we have a very progressive tax structure but the link you included says the opposite. The linked Wall St Journal article confirms that upper earners pay substantially lower effective tax rate than middle earners – it just says that’s good for all of us – a dubious assertion that is the essence of “trickle down economics”
Sean Bileat et, al keep insisting that the key to a healthy economy is lower tax rates. Why is it then that our economy is limping along at the same time that we have the lowest overall tax rates than we’ve had since the 1950’s? … just wondering.
Jerry – there are probably a lot of reasons, chief among them the collapse of the housing market and the explosion in federal spending. Also, the following chart may be of interest. It shows that the top 20% of income earners earned about 50% of the income, but paid just shy of 70% of federal taxes. The bottom 60% of income earners earned about 28% of after tax income but paid 12% of federal taxes.
http://www.taxpolicycenter.org/numbers/displayatab.cfm?Docid=2977&DocTypeID=7
Anil – the link you point to just covers income tax, which is totally misleading. The higher you go on the income scale, the less and less income is covered by income tax. For top earners the majority of income is capital gains, etc.
The only useful comparison is total income vs total taxes and by that measure its indisputable that top earners pay at a way lower rate than you or I. Every time a wealthy (that covers most of them in both parties) political candidate release their tax returns you find that they are paying a much smaller fraction of their total income in taxes than you or I. Just recently Mitt Romney released his returns and he was paying either 13% or 15% (I don’t remember) total tax on income. That’s not a criticism of Romney, he wasn’t doing anything wrong. That’s our tax system.
The most famous public spokesman on this issue is that raving socialist Warren Buffet who pointed out that he pays a far lower fraction of his income in taxes than his secretary.
Jerry – check out footnote 6. The chart also covers Social Security, Medicare, corporate taxes and estate taxes.
I don’t understand the fixation on raising capital gains rates just to get the wealthy to pay more. Raising capital gains rates hurts everyone because capital is stuck in unproductive uses just to avoid the tax hit. As a result, the economy is less productive, which hurts everyone. That was one of the points the WSJ article cited above was making. If the choice is Warren Buffett making $3 billion a year and me making $50 thousand and Warren Buffett making $1 billion a year and me making $40 thousand, I will choose the former.
“If the choice is Warren Buffett making $3 billion a year and me making $50 thousand and Warren Buffett making $1 billion a year and me making $40 thousand, I will choose the former.”
Me too! I just don’t see a lot of evidence that is the real choice.
Same old, same old. As long as the very wealthy continue to pay next to nothing on capital gains, income inequality will continue to grow. The fact that Mittens is worth a quarter of a billion dollars and pays only 14-15% effective tax rate is all you need to know about equity in America–there isn’t any.
Let’s be honest for once and say that we had a surplus under Clinton, Bush engaged in not one but two wars and didn’t ask Americans to sacrifice: instead he gave the top 1% a huge tax break, and it set us on the skids for the debt you see today. If you want to fault Obama for anything, it is that he failed to let the tax breaks for the rich expire when he could have. Meanwhile, the economy continues to grow, and unemployment continues to decline, albeit slowly, and Repubs continue to work feverishly to make Obama fail, even at the expense of the nation. Nice!
Won’t get fooled again. JPKIII for Congress in MA-4.
Anil said: “Decreasing the tax burden on businesses and individuals would likely increase tax revenues, as more people would end up being hired, which would increase the tax base.”
Anil, you didn’t talk about the flip side. In the short term, there would be a period of adjustment so less taxes means more people in the public sector would lose their jobs, so it probably would be a wash at best. You can’t possibly believe that would be healthy for the economy?
Second, rich people are already rich…giving them more in taxes wouldn’t lead to job growth it would lead them to putting more of their money in the bank or investments, etc. If they are rich they can already afford more employees, they just decide not to hire them. What I think you might want is to say give businesses a tax break…allow them to succeed which might lead to more employees.
Third, if we took a poll of the richest people in America and whether they are overtaxed or undertaxed, I would guess, if they were honest, that they would admit they are undertaxed as of right now.
This thread has evolved into an excellent example of why our entire tax code needs revamping. Taxes are just too darn complicated. Everyone would benefit from a system of taxation that was easier to understand.
Personally, while I agree that higher earners should pay at a higher rate, I think the political focus has been misplaced on that issue. I’m far more bothered by giant corporations using loopholes to pay no taxes, than I am by wealthy individuals paying too little. It’s not that both points shouldn’t be addressed, but I think we’d be better served focusing on the larger pool of money. GE paid no US taxes in 2010. Let’s fix that first!
Then there’s this whole “trickle down economics” debate, which continues from the Reagan era. This premise has been debunked more times than Bigfoot. I think the Republicans should try to find a more intellectually [and factually] based case for lower taxes.
On the flip side of that coin… If trickle down economics doesn’t work, why do we assume a system of trickle down taxes works any better? The federal government ends up with too much money, [as evidenced by the ability to waste hundreds of billion$ in Iraq], while communities across the country continue struggling to fund basic services.
Other than true national defense, the majority of tax money should be directed first where the rubber meets the road… In towns and cities across America, including right here in Newton.
Everything Jerry and Ted said.
Taxes should be looked at as a user’s fee. The more you get out of our economy, the more you pay. The law of diminishing returns means higher rates for those of us who make the most.
A few points not previously addressed:
— There are new fresh faces in this race not because of any gerrymandering — it’s because a thread of Massachusetts are sick of politics in Massachusetts Yes, the problem involves democrats — we played the game of corruption and control.
— There’s little reason for me to vote for Mr. Bielat, however I give him great respect for his davy and goliath attempt in the last round. Goliath was mean and Davy was a gentleman.
— Mr Kennedy has no need to show his cards. He can most effectively show his cards after a period of meeting the people of the district. He is clearly not attempting to campaign on the “smartest man in the room’ platform as many idiot campaigners do
— Tax rates are historically low. Yes those movers in our economy do in fact make decisions on tax rates. Most of us want to expand private sector, not gov’t jobs (for lack of need to do it). Most of us want a comfortable retirement which mostly depends on those few movers that control our retirement funds. But the decision on tax rates will be over before this election — will it not?
— The major election point is: Health Care. When Mr Kennedy faces a debate, that is when he wil show his cards we will see his strengths in reaching the non-meandered district.
Ted Hess-Mahan finally said something really intelligent:
“If you want to fault Obama for anything, it is that he failed to let the tax breaks for the rich expire when he could have.”
Why didn’t the Democrats let the much-hated “Bush tax cuts” expire when they had the President, the House, and a filibuster-proof Senate? Surprise, surprise, I thought they should have and was shocked that they didn’t. Now they’re attacking the Republicans for the tax structure. Pure hypocrisy.
But, in the election, the Republicans won’t attack the Democrats for this because they’d be afraid of seeming to back higher taxes. And the Democrats won’t attack Romney for our health insurance system, because they’d be afraid of seeming to not back Obamacare. But both were big mistakes. Now Democrats campaign on higher taxes on the rich, when they could have had them no problem. At least, Romney can claim as he does that he would kill Obamacare because he believes health care rules are best left up to individual states. So he doesn’t seem quite as hypocritical.
The government, with the majority of Dems and Repubs backing it, writes tax laws to, among other things, affect and direct investments. Lower capital gains taxes are there to spur investment.
E.g., if you lowered tax rates further on cumquat profits, you’d drive a lot of investment into cumquat production.
The point is, Romney and other millionaires are putting their money where bi-partisan government decisions have urged them to. Now that they’ve done what the government has asked them to do, some whiners here are complaining about it.
Steps taken to end that benefit (which is available to anyone, rich or poor) will simply drive capital investment elsewhere. Perhaps we should fine Romney and other smart investors for being smart.
If I had his money, or anywhere near it, I’d do the same. And so would the whiners.
@Jeff – Why is it called “whining” to raise the question of whether or not its a good idea to tax capital gains at a much lower rate than other income …. but its not “whining” when people complain – our taxes are too high?
>> If I had his money, or anywhere near it, I’d do the same
Of course, so would I – that doesn’t have any bearing though on whether its a sensible tax system or not.
More important than what any of us would do if we made $1 million a year is what most voters will do. On this point, 60% of Americans support the idea of a law that would require households that earn $1 million or more a year to pay a minimum 30% tax rate, as President Obama has called for and which Republicans oppose. Predictably, three-quarters of Democrats are supportive and most Republicans are against it (albeit by a narrower 54-43 margin). Most importantly–and this should scare Republican candidates–independents favor raising taxes on the rich by an almost 2 to 1 margin.
If 60% of Americans think those earning $1mm should pay 30% — then we don’t have a problem since current brackets equate to 32% for those earning exactly $1mm and higher rates for higher income. There can be a great discussion on what to do about investment windfalls — but we’re confusing the public if we suggest that high-earning households categorically pay low rates.
Hoss, I believe the poll question was aimed at the Buffett Rule, which takes into account income and capital gains and the total effective tax rate. Because capital gains are taxed at a much lower rate than other income, the effective tax rate for the wealthiest Americans is much lower than 30%.
Ted didn’t answer me about why the Democrats didn’t let the Bush tax cuts lapse when they had the chance, and are now crying about taxing higher income people. No, instead he’s come out with another Obama “pit one part of society against the other” plan.
“On this point, 60% of Americans support the idea of a law that would require households that earn $1 million or more a year to pay a minimum 30% tax rate, as President Obama has called for and which Republicans oppose.”
This demonizes “people making more than $1 million” instead of demonizing “the 1%”.
The fact is that the US should have a continuously graduated income tax, without demonizing a particular income bracket. As you make more, your incremental income is taxed at a higher rate. Not one that discourages making more money, but one that acknowledges that as you make more money you are going further and further beyond covering the necessities of life. This is how it used to be.
When you cast your vote for the populist, Barack Obama, remember that the notion of demonizing the wealthy is associated with Mao, Hugo Chavez, Fidel Castro, Lenin, Stalin, etc. Mao killed like 20 million “bourgeoisie” and China went into a poverty tailspin that only a return to a form of capitalism has corrected.
Obama is a phony, but a dangerous phony, and people like many on this blog are being enchanted by the hope of stealing from those whom they in reality envy because they’ve figured out how to make a lot of money.