Monday, February 2, 2015

Who Envies Paul Ryan?

Paul Ryan

Rep. Paul Ryan (R-Wisconsin), Chairman for the Committee for Ways and Means, has an annual salary of $174,000 a year. Some people might envy Mister Ryan, because not only does he have a great government job that pays a great government salary (and has lot of great government benefits), but also because Ryan has so much government power — which he wields with no mercy when playing God with other people's lives.

Crooks and Liars [On Meet the Press]: "Chuck Todd asked Paul Ryan what he thought of the president's proposal to eliminate the trust fund tax. He immediately went to the American farmer [such as those who get federal farm subsidies], as the ones who would surely suffer if this plan was enacted. But these are rarely the ones hit by trust fund tax increases as they don't earn enough to be affected in the least."

Paul Ryan didn't mention the "step-up in basis" at death for capital gains taxes (evading the capital gains tax completely), by leaving unsold assets in an inheritance, but also by avoiding the estate tax by setting up a trust fund for their beneficiaries.

The White House Fact Sheet on this proposed tax reform says: “99 percent of the impact of the President’s capital gains reform proposal (including eliminating stepped-up basis and raising the capital gains rate) would be on the top 1 percent — and more than 80 percent would be on the top 0.1 percent (those with incomes over $2 million).

According to Inequality.Org: "The President’s proposal stands in sharp contrast to what House Republicans are proposing. They’re calling for eliminating the estate tax and maintaining stepped-up basis, which is a guaranteed formula for ensuring that America’s wealth inequality keeps rising to ever-greater levels. The Center on Budget and Policy Priorities says the estate tax remains our nation’s best check on concentrated wealth. But Obama's proposed "trust fund loophole reform" does not address these estate tax problems, or other serious problems — known collectively as the billionaire loophole — that allow the wealthy to shield their assets from the tax liability they would otherwise owe. Efforts to close the billionaire loophole should have been included as part of the President’s budget.

The Tax Policy Center estimates that other elements of Obama’s proposed tax reform would lower taxes on families earning $25,000 or less (about $175 a year) and raise taxes on the nation’s top 0.1 percent (households making at least $3.4 million a year) by an average $168,000.

Rep. Chris Van Hollen (D-Maryland) has proposed “an action plan to grow the paychecks of all, not just the wealth of a few.” Van Hollen’s plan would deny corporations tax deductions on any executive pay over $1 million if their workers aren’t getting pay hikes that reflect increases in worker productivity and the cost of living. Also appearing in the Van Hollen package is a “financial transaction tax” on Wall Street speculation. One analyst suggests that Hollen's initiative could signal that at least some top Democrats realize that trying to play nice with Wall Street ensures ever-widening inequality.

Trust Fund Babies

Let's look at a few of those who Rep. Paul Ryan so aggressively defends.

At the World Economic Forum in Davos, Billionaire Jeff Greene, who amassed a fortune betting against subprime mortgage securities, says the U.S. faces a jobs crisis that will cause social unrest and radical politics. Bloomberg quotes Jeff Greene: "America’s lifestyle expectations are far too high and need to be adjusted so we have less things and a smaller, better existence ... Our economy is in deep trouble. We need to be honest with ourselves. We’ve had a realistic level of job destruction, and those jobs aren’t coming back ... My greatest worry for our country is that globalization and the exponential growth of technology, which have destroyed millions of jobs already, will undoubtedly eliminate millions and millions more jobs during the next several years. Many manufacturing jobs that we lost will come back to the U.S., but most will be filled by robots and software."

Just like 1,700 other deep-pocketed people, Jeff Greene (along with his wife, children, and two nannies), also took a private jet to the forum in Davos. Jeff Greene also owns a $195-million palace in Beverly Hills (with 23 bathrooms) and two other Los Angeles mansions, as well as mansion in Palm Beach, a mansion in the Hamptons, and a 145-foot party yacht called Summerwind. But it's everybody else who should expect "a smaller existence".

And then there's billionaire/venture capitalist Ron Burkle, who paid $17 million eight years ago for a Manhattan penthouse. Now Burkle has just put the triplex on the market for $37 million. The buyer will get five bedrooms, six and a half bathrooms, two kitchens, a mahogany library, and a heated rooftop pool. Burkle also owns four homes in Southern California, two in Mexico, and still another in London. He will make a $20 million profit on his Manhattan penthouse and might owe 23.8% in capital gains taxes from the sale (a tax rate that is less than for someone who earns between $37,451 and $90,750 a year in regular wages).

The billions that JPMorgan has paid in fines for screwing the working-class with the manipulation of energy markets, frauds on mortgages and credit cards, as well as currency rigging, didn’t seem to have hurt the bank or it's CEO Jamie Dimon very much — just last year alone he took home $20 million. Paul Ryan and the GOP also wants to keep his tax rates very low.

Let's look at the other side of the coin, where Paul Ryan says it is Obama who "divides people based on class and income".

(Economic Policy Institute) — The best numbers on U.S. inequality by state have come, over recent years, from the Economic Policy Institute. But the U.S. Census data behind those numbers didn’t allow EPI researchers to calculate income shares for any group loftier than the top 5 percent — until now. EPI’s state research network has just come out with new figures that reflect the tax return-based methodology that economists Thomas Piketty and Emmanuel Saez have applied to the United States as a whole. And there's no surprise:

"Income inequality has been on the rise for decades in every state. Since the 1970s, rich households’ incomes have grown much faster in every state than have the incomes of poor and middle-income households. In contrast, from World War II through the mid 1970s, the gains of economic growth were more evenly shared across the income scale." [I noted this in another post: The Rise and Fall of the Middle-Class]

Here are a few rejoinders to the apologists (such as Paul Ryan) for our top-heavy status quo. The claim: "The poor live on easy street." New polling from the Pew Research Center shows that a majority of America’s most affluent believe that poor people today have it easy because they can get government benefits without doing anything in return. The reality: The poor, notes this New York Times survey of recent research, don’t walk anywhere close to easy street. They face the soul-rending omnipresence of worry and fear — of weariness and fatigue. That fatigue comes in part, the U.S. Bureau of Labor Statistics details, from working at jobs that don’t pay enough to keep families above the poverty line. More weariness, points out the St. Louis Federal Reserve, comes from a financial industry that subjects low-income households to as much as $1,200 in annual service fees. Add in municipalities that profit from police departments targeting poor communities — with a raft of stops, fines, and summonses — and you have more than enough, observes one analyst, to reveal the claim that "the poor have it easy" as just a fantasy of “the willfully callous and the haughtily blind.”

Crooks and Liars noted that Rep. Paul Ryan is all for tax credits for working families (with and without children), but when it comes to taxing the people HE serves (the one percent), he is vehemently opposed. That's also because, ALL tax cuts (no matter who gets them) serves the GOP's ultimate purpose of starving the government of revenues, hence the Republican strategy of "starve the beast".

Paul Ryan at Meet the Press, to Chuck Todd regarding the inheritance tax: "You're actually making it really hard for a family to pass on the family business to the next generation. What I think the president's trying to do here is to again exploit envy economics. This top-down redistribution doesn't work, we've been doing it for six years."

We've heard of Ryan's own family business, but what exactly have we been doing what for past six years Mister Ryan? Taxing the rich? The Bush tax cuts (that once taxed capital gains at rate of 15%) expired, and the capital gains tax rate went back to 20% on January 1, 2013 (not 6 years ago) — when Obamacare also added a surtax of 3.8% to expand Medicaid. And a 23.8% tax rate on capital gains for the very rich is still much lower than the marginal tax rates on middle-class wages (And capital gains aren't taxed for Social Security either.)

As a percent of their incomes, the poor already pay more than the rich. So why does Paul Ryan feel so much empathy for the most wealthiest among us?

Paul Ryan: "Look, it [raising taxes on the mega-rich] may make for good politics, it doesn't make for good economic growth. So instead of having an economic policy that produces a government-controlled economy, where we try to divide people based on class and income, why don't we support bottom up organic economic growth that brings everybody into this economy, that produces real opportunity and upward mobility? We don't want to go down this pathway of practicing me too on envy economics."

First, what is "bottom up organic economic growth"? Is that a little like "trickledown", but without the rising boats?

And most poor people don't envy the rich; if anything, many emulate them — because they want to be rich too. And it wasn't poor people who started a class war. In 2006 Warren Buffett said: “There’s class warfare all right, but it’s my class, the rich class, that’s making war — and we’re winning." Then later, in 2011 Buffett acknowledged that class warfare has been waged and said, “My class has won.”

After President Obama’s 2012 State of the Union Address, Warren Buffett was rankled by conservative implications that the President’s attempts to follow the “Buffett Rule” and raise taxes for the extremely wealthy to meet the rest of the nation was class warfare:

“The interesting thing is that the tax code, I wouldn’t call it a war, but it is a struggle. Groups try to keep their own taxes down. People lobby to keep their estate taxes down. They lobby to keep their capital gains taxes down. So, if this is a war – I wouldn’t call it a war, I’d call it a struggle – but, if this is a war, my side has had the nuclear bomb. We’ve got K-Street, we’ve got lobbyists, we’ve got money on our side in terms of lobbyists. Deb [his secretary] does not have a lobbyist. She doesn’t have anybody remotely that’s representing her. But, believe me, plenty of rich families have lobbyists that are working like crazy to get rid of estate taxes, lower capital gain taxes, whatever it may be. So, if there has been a war going on, the war has been waged by the people who are very well to do who are trying to shift the burden onto people like that and away from themselves.”

So when Paul Ryan talks about "envy economics", he might have been describing rich people who feels envy towards someone richer. Did you every hear of yacht envy? (I mentioned this in my 2011 post: Paul Ryan and GOP Promotes Class Envy)

The CEO of Oracle, Larry Ellison's $200 million yacht named "Rising Sun"
Larry Ellison's $200 million yacht Rising Sun

Truthout (January 2015): "Republicans have accused President Obama of waging class warfare for using his State of the Union to push for an increase in taxes and closing loopholes that benefit the wealthiest 1% of Americans. Pulitzer Prize-winning tax reporter David Cay Johnston says there is indeed a class war going on in Washington — but by the rich against the poor."

So just like the Republican whores at the Koch brothers retreat, so does Paul Ryan pimp for the ultra-rich — who doesn't also want to see HIS taxes go up. So, who envies Paul Ryan's soul?


  1. From the New York Times:

    Paul Ryan: “We’re six years into the Obama economic policies, and he’s proposing more of the same, more tax increases that kill investment and jobs, and policies which are hardly aspirational."

    Republicans will put forward ideas for [what THEY say] is controlling the main drivers of the deficit — Social Security and health care programs that are expanding with an aging population — and will propose a budget that does balance.

    Corporations are hoarding over $2 trillion in profits overseas. Obama's tax proposals will be a 19 percent minimum tax rate on American corporate profits that are kept overseas. [Which the GOP opposes.]

    Obama also proposed a one-time 14 percent tax rate for companies that bring profits home from overseas, with much of the proceeds going to fund infrastructure. But Ryan wants that made permanent, and said “One time doesn’t work.”

    Obama also wants to lower the corporate tax rate [the statutory rate] from 35 percent to 28 percent, and 25 percent for manufacturers. [Ryan, the House’s lead tax policy writer, naturally embraced that idea.]

    Obama also wants "fast track" for horrible trade deals, like the TPP trasde agreement [The GOP and the Dems are divided on this.)

    Ryan [is his way] acknowledged a reality that many Republicans have long avoided: The rich are getting much richer. “The Obamanomics that we’re practicing now have exacerbated inequality. They’ve exacerbated stagnation. They’re made things worse. The wealthy are doing really well. They’re practicing trickle-down economics now." (WTF?!?!)

  2. Ryan’s Hope and Change (A rebuttal by "The Angry Bear")

  3. REUTERS: Obama targets foreign profits with tax proposal, Republicans skeptical

    Obama has already offered to cut the corporate income tax, but he wants to offset the revenue losses that would result by closing loopholes. Republican proposals have varied, while generally seeking deeper cuts in the rate and fewer loophole closings ... The president’s proposal also includes cracking down on corporations that shift profits to tax havens to avoid paying their fair share or undertake "inversion" deals in which they reincorporate abroad to avoid paying U.S. taxes.

  4. I'd like to see tax rates on the wealthy rise, and stay that way, until...

    1) the national debt is paid off, 2) Our infrastructure is completely updated, 3) Social Security is shored up, and 4) the government has a healthy surplus for future recessions (and/or misguided wars).

    But because half the members of Congress are millionaires — and because they all have $174,000 annual government salaries — we'll never see them raise taxes on themselves.

  5. There is the 1% plan in a nutshell: lower living standards for the rest of us and more for them.

  6. Paul Ryan would add $93.5 billion to the deficit

    In his very first legislative act as head of the committee that will be central to expected tax reform efforts over the next two years, Rep. Paul Ryan pushed through a package of 7 tax cut bills that would add $93.5 billion to the deficit in the next decade ... Although Republicans generally require new expenses to be paid for by cuts elsewhere in the budget, they don't when it comes to tax cuts. As a result, none of the proposed measures came along with savings from another portion of the budget.

  7. UPDATE:

    The Next New Deal: The Politics of Responsibility – Not Envy

    "The rich may imagine that blaming them for the struggles of the rest of us is driven by envy, but that’s their own conceit to make them feel good. Americans don’t resent the rich. While we might fantasize about winning the lottery, we are not consumed by jealousy. What most Americans understand is that they are struggling financially because the wealthy have rigged the economic and political system to benefit them at the expense of the rest of us. That’s not envy: it’s reality."