The Right Mix for the USA

Those Cats are Too Fat 

A Cocktail Party Position on Taxes
  


Now that some of the smoke and hot air has blown away and we are into serious discussions about federal budgets and how to stop the deficit bleeding, it is time to start talking sense about income tax rates. As usual, quite a few statements by politicians on both ends of the political spectrum twist the facts, or simply are not true.


One common assertion is almost true. The most recent Bush-era tax cuts are derided by political opponents as a gift to the wealthy. Actually, all taxpayers got a reduction. However, the very rich did benefit the most because the top dogs saw the maximum rate reduced from 44 percent to 35 percent, a huge advantage for them.


That brings up something often misunderstood about income taxes. Using an example that might apply to some of us mere mortals, let’s compare a couple filing jointly with taxable income of $50,000 and one whose income is $4 million. The tax rate for the little guys is 13.3 percent. The tax rate for the wealthy couple on the first $50,000 of their taxable income also is 13.3 percent—exactly the same. Higher rates for the high earners gradually kick-in at higher levels of income; the fat cat couple does not pay 35 percent on all of their income, only the amount that exceeds $379,150.


Consider President Obama’s income taxes this year. All recent presidents have made their return information public—a good thing. The Obamas filed jointly. Their income totaled $1.73 million. Most of it was the President’s $400,000 salary and royalties from three books he authored that sold millions of copies. The Obamas paid $453,770 in income taxes. That’s a lot of cash, but it is 26 percent and change, not 35 percent.


Knowing their tax records will be made public no doubt inhibits the Obamas from using tax loopholes to reduce their rate to an even lower level. Most wealthy folks have no such constraints. They can hire accountants and attorneys the little guys cannot afford. It is well-documented that the experts guide their clients to numerous legal ways to avoid a whole lot of income taxes. The rich don’t need much help in finding ways to profit from capital gains; these rates are lower than the income tax levels. People at the low end of the income spectrum have little or no ability to earn capital gains.


Some of the wealthy like to point out that they support millions of low-income people who pay no income taxes at all. It is true that nearly half of Americans pay no income taxes through their annual returns to the Internal Revenue Service, but some of those filers are quite well-to-do. And, everyone who works is liable for payroll taxes that finance Social Security and Medicare. These amounts are income taxes, even if we choose to call them something else.


Congress responded to an Obama proposal by using some trickery to give employees a gift throughout 2011. The usual 6.2 percent Social Security tax on wages was reduced to 4.2 percent. The difference, the legislation says, will be made up in transfers of funds from the treasury to the Social Security trust funds. The trouble with that is the treasury is broke, and the gift contributes to the ballooning deficit. The Social Security trust funds were doing just fine, with a multi-trillion dollar surplus, before this ruse went into effect. It is going to be difficult for Congress to take back this unnecessary gift at the end of 2011. If this tax reduction is not rescinded, it will seriously weaken the Social Security system.


Opponents of any income tax increase claim a return to the 44 percent top rate for the wealthy would retard the creation of badly needed jobs, and even contribute to increases in unemployment. That line of thinking is at odds with reality. The top rate peaked at 92 percent in the early 1950s. It was reduced to 77 percent in 1964 and later to 70 percent, where it stayed throughout most of the 1970s. The three decades when very high rates were in effect were among the most prosperous times in American history.


As the top income tax rate was lowered, we experienced a massive redistribution of wealth in the U.S. from the poor and the middle class to the rich. Reports based on Internal Revenue Service statistics show this clearly. One appearing in The Washington Post last summer said the average income for the top one percent of earners rose 281 percent, or about $973,000 per household, in the previous 10 years. The bottom 20 percent of earners saw their incomes rise only 16 percent, or $2,400 per household, during the same period. When inflation is factored in, poor and middle-class workers actually lost money while the fat cats grew much fatter.


The top one percent of Americans now take in nearly 25 percent of the annual income generated in the country. They control 40 percent of the wealth. These figures have risen dramatically recently as unemployment also rose to high levels.


Americans are fascinated by the rich and famous, and most of us admire those who climb up the economic ladder through their hard work, often coupled with risk-taking. We think they deserve to be well-rewarded. But we know instinctively that the current vast and growing gap between the rich and poor in the U.S. is unhealthy. Respect for the rich is turning to anger over huge Wall Street bonuses and outlandish salaries for corporate officers and a government that seems unable or unwilling to make adjustments to compensate for the excesses.

What we feel in our guts is bad for America has a scientific basis. A 2009 best-seller, The Spirit Level: Why Greater Equality Makes Societies Stronger, describes links between wide income gaps in nations and social problems. The problems including obesity, mental illness, drug and alcohol abuse, homicides, imprisonment rates, lowered life expectancies, over consumption of resources, teen pregnancy, and lack of upward mobility.


Surprisingly, the scientists state that many of the problems are experienced by the rich as well as the poor when wealth is very unequally distributed. And the connections to wealth inequality prevail in rich as well as poor nations. The scientists once again confirm the link between income gaps and poverty, which has been described many times.


Error rates can be high in studies involving the human condition and interpretations of data always are somewhat subjective in the social sciences. But if the authors of The Spirit Level are correct about only a few of the links they describe, we have compelling evidence that huge gaps in income and wealth within nations contribute to vexing problems that have high costs for all citizens. The ultimate solution when the gaps become too wide is revolution. No thinking American wants that.


The Cocktail Party endorses three actions to reduce the gap between the haves and have-nots in America to a more reasonable level, help reduce the federal deficit, and preserve Social Security:


1. Restore the top income tax rate to the 44 percent level when the current tax legislation authorizing the 35 percent rate expires.


2. Return the Social Security payroll tax rate for employees to 6.2 percent at the end of 2011.

3. Remove the cap on Social Security payroll taxation, which currently is $106,800, but leave the maximum payout where it is. Currently, the Social Security payout for workers who earned high salaries and retire at age 66 is nearly $26,000 per year. It rises through cost-of-living adjustments as do all payouts. That’s plenty of safety net for any destitute fat cats who manage to lose their millions. Removing the taxation limit coupled with minor changes in the way cost-of-living adjustments are calculated is sufficient to assure Social Security will be solvent for the foreseeable future.


The fat cats can well afford to slim down a little for their own good and the common good.


To review the announcement of the founding of the Great American Cocktail Party visit the August 5, 2010 post titled “Coffee, Tea, or . . .” in the archive on the right-hand column of this Blog.

Our Promise 

The right mix for the USA


                                                                   
A Cocktail Party
Pledge



The American Cocktail Party pledges, in all our activities, to vigorously argue against the policies of our opponents. We promise, however, to refrain from personal attacks on those who do not agree with us. We will discuss programs and proposals, not personal characteristics, and avoid inflammatory language and symbolism.

Now if the leaders of both traditional political parties and commentators on radio and television would join us in this pledge, maybe, just maybe, there would be no more Tucson massacres.

(Our best wishes for a speedy recovery to fellow blogger Ashleigh Burrows, who was shot three times by the perpetrator of the Tucson crimes.)




The right mix for the USA

To Your               

Good
Health   

A Cocktail Party
Progress Report 
                          
The Cocktail Party platform committee is working diligently on a national health care position statement. So far, the members have been unable to reach a consensus. What’s new about that, when health care is the topic?

The committee, however, has announced one important bit of progress. It has adopted a slogan for the health plank:

“Of all things that won’t cure a cold, martinis are best.”

Here’s to you—Happy New Year!

Open the Closet Door

A Cocktail Party Position

Opponents of the military’s “don’t ask, don’t tell” policy toward gay servicemen and women are trying to ram through repeal legislation during the dying days of this Congress. The Cocktail Party hopes they succeed.

“Don’t ask, don’t tell” is bad policy. The American public recognizes that, as poll after poll shows a growing body of opinion that all our citizens deserve equal treatment under the law. Recent polls show most military personnel hold the same view, although some, primarily in the Army and Marines, disagree.

The policy was different, and more unfair, when the Cocktail Party chairman served in the U.S. Army in the late 1950s. At that time, any member, or potential member, of the military could be asked about their sexual orientation. An admission of homosexuality kept the individual from enlisting in the service or resulted in a speedy dishonorable discharge.

The 1950s policy apparently was effective in keeping “queers,” “homos,” or “dykes” (today’s “gays” sounds much more civil) out of the military, or deeply hidden within it. Your party chairman served nearly two years in a huge unit (850 enlisted men) in the Sergeant Major’s office, where just about everything was known about everyone. Not a single man was discharged for gay conduct or admitting to being gay. No one was even suspected of being gay.

A WAC battery right down the street was home to several hundred women. The old soldiers among the men claimed that most of the older enlisted women and many WAC officers were lesbians. Your chairman never saw or heard of any concrete evidence to back up those assertions. Certainly, there was plenty of evidence that a large number of the younger WACs were straight. Pregnancy discharges were fairly common, and intimate boy-girl conduct was commonplace.

No doubt gays have served in our armed forces throughout history, but they had to stay deep within the closet to continue their careers. The prospect of immediate discharge, or worse, must have been a constant nightmare for them. In the 1950s, a gay soldier would have been shunned by his comrades at best, and probably would have been subjected to physical violence in many units. Then, he would have been discharged.

“Don’t ask, don’t tell,” adopted during the Clinton administration years, made service by gays at least more possible and safer. But, this is 2010, not 1955 or 1995. It’s a good thing that attitudes and policy have changed on the side of justice, but now the policy needs to change once again to match current public attitudes and meet ethical standards.

The Cocktail Party firmly believes it is morally wrong and indefensible for any human being to be forced to lie, or worse, to live a lie, to have the opportunity to begin or continue any career, including military service.

Swept

It was a clean sweep. Not a single Cocktail Party candidate prevailed in Tuesday’s elections. This was not the stunning setback some may think. The party did not back any candidates.

Never fear. The Cocktail Party (see 8/5/2010 Post, "Coffee, Tea, or . . . ) is merely saving its ammunition for the big one—Campaign 2012. The presidential race started about five minutes after the polls closed in most places and even earlier in some places.

We believe millions of those eligible voters who failed to exercise one of the great privileges of American citizenship and did not bother to cast a ballot in the midterm election include many closet Cocktail Partiers who heeded this wisdom from Kin Hubbard:

“We’d all like to vote for the best man, but he’s never a candidate.”

The Cocktail Party will rectify this situation as we plod toward November 2, 2012. We will develop a strong slate of candidates. Along the way, we will be staking out positions on important matters in words that cannot possibly be misunderstood.

We will create some unique proposals, but also borrow thoughts from others just as we lifted the Hubbard quotation for a website titled “Time Goes By.” We may or may not credit those we steal ideas from.

We expect to glean very few useful thoughts from current members of Congress or those who belong to other political parties.

The Cocktail Party is Tolerant

A misguided Salt Lake Tribune reporter recently suggested to a local representative of the liberal Coffee Party that the organization might do better in the Beehive State if it changed its name to “The Postum Party” or something similar. The Coffee Partier acknowledged his small group had caved in to local pressure when it provided mostly fruit punch and water at its first meeting.

Although coffee is served almost everywhere in Utah, sipping the stimulating beverage is contrary to the “Word of Wisdom,” and therefore strongly discouraged by the Mormon Church. The usual Cocktail Party refreshments fall into the same category. We cannot expect a surge in Cocktail Party membership in Utah.

On this issue, the Cocktail Party stance is clear and firm. We will not consider name changes that detract from the essence of our mission statement: “To serve the people of the United States by creating an excellent blend of good government and personal freedom.” We assert that “Cocktail Party” strongly reinforces the “blend” concept, and therefore is entirely appropriate for us. We refuse to pander to other viewpoints merely to recruit a few members.

The Cocktail Party, however, is tolerant of all. When attending meetings, you may bring your own bottle, or bottles, of anything you choose. We provide hot water as well as hot air, so you can whip up a nice cup of hot chocolate or an exotic tea if you like. Or, you can mix a hot toddy. It’s your choice entirely.

Cocktail Partiers value individual freedom. We think what people drink is irrelevant to what is in their heads and hearts, unless, of course, they fuzzy up their mental and physical processes with too much of the good stuff.

Cocktail Party Explodes

Just a month ago, the Great American Cocktail Party was launched right here (“Coffee, Tea, or . . . “ posted 8/5). Membership has quadrupled in the few weeks since the organization unfurled its banner.

And there, folks, you have two examples of what to expect lots of in the weeks ahead as we move toward Election Day in November. Many think we can’t get there fast enough.

The headline is designed to get your attention and compel you to read what promises to be an interesting item. The problem is, it has little to do with the actual story. This sort of sensationalism has been raised to a fine art by reprehensible rags like the National Enquirer, a “junk journalism” publication many of today’s internet authors and radio and television script readers seem to have adopted as their model.

Cocktail Party membership indeed has quadrupled. The deception here is one of omission. Membership was on the low side to begin with.

With a little practice, one could become expert at phony headlining and statistical manipulation. That could earn a lucrative job as a talk show host. And, if the editorial black arts were practiced adroitly with charts and graphs accompanied by raving and ranting, the perpetrator could become a famous television commentator.

Although the body politic may have been under whelmed by formation of the Cocktail Party, a few individuals were whelmed to some extent. Bill Hamilton, who retired as national head of publishing in the U.S. Forest Service, signed on and even suggested a motto for the fledgling party:

“A politician should have a pimp for a brother, so he’d have someone to look up to.”

Hamilton, a stickler for accuracy, was quick to point out that this statement originally chastised editors, not politicians. It appeared in "The Portable Curmudgeon," by Jon Winokur, 1987.

As an ex-editor, I winced upon learning that. However, considering the number of “editors” who love to conjure up sensational headlines and story lines and let all sorts of phony statistical usage and analyses get into print and on the airways, perhaps the slap was deserved.

Coffee, Tea, or . . .

The right mix for the U.S.A.

Extremists want their position, and only theirs, to prevail on political issues. If the often-expressed definition of politics as “the art of compromise” is correct, they have no chance of being satisfied with any government action, or lack thereof, based on laws enacted by our elected representatives. Frustration is inevitable.

Lately, the frustration seems more intense than usual. We have a motley collection of right-wing nuts in the Tea Party and other fringe groups getting a lot of media attention. We have an equally motley group of left-wing nuts mucking about with something called the Coffee Party.

What’s new? Our present radical parties both claim they are not parties at all. The Tea Party crowd steadfastly refuses to propose its own candidates or develop a coherent platform. It seeks to exercise clout by vehemently opposing anyone who is “not conservative enough,” whatever that is, or who supports “big government,” whatever that means.

Tea Party adherents have spewed hate, waved obscene signs, and even advocated violence in a few cases, at rallies across the land. Not everyone has engaged in this sort of reprehensible conduct, but many did. The trouble with right-wing extremists is that too many of them are mean and selfish people. Many are woefully uninformed concerning the things they keep howling about.

Unhappy with what they viewed as excessive media coverage of Tea Party activities, two radical liberals formed the opposition Coffee Party in January. It quickly ballooned into more than 200,000 Facebook members by the end of April, and millions visit its web pages. Adherents have held one round of local meetings and are planning a national convention.

Coffee Party leaders say one of their goals is to restore civility in political discourse. That’s a laudable, but tall, order. America seldom has experienced a lot of civil political discourse, although most agree there has been even less civility than usual lately. Some practice runs may be needed. At an early Coffee Party meeting, several attendees hissed and booed various statements that mentioned conservatives. Surely, this was not a demonstration of civility.

True to the common perception of way-out liberals, the Coffee Party intends to employ a vague process of “collective deliberation” to arrive at a decision (they don’t say what problems are being addressed!), and then implement the decision, whatever that means. Vague nonsense such as this is why left-wing extremists are such a small minority in our country. The trouble with left-wing extremists is that too many of them are wildly impractical, and often the upper-crust among them exudes an abrasive arrogance. They are as out of tune with mainstream Americans as the arch-conservatives on the other end of the spectrum.

It is interesting that the Coffee Partiers banded together because the Tea Partiers were getting too much ink and air time. That remains true. One hardly hears or sees much about the Coffee Party and their ideas, or lack thereof, in the media. We hear a lot about the Tea Party. Whatever happened to the “liberal media” invented by and complained about by far-right wingers for years?

What does the advent of the radical “parties” tell us? It appears a fair number of Americans are dissatisfied with the performance of both traditional political parties. The role of political parties is to define positions and produce slates of worthy candidates who will support the positions. A lot of people believe Republicans and Democrats have done a poor job of that lately. So, what should we do?

We should form a new party that better reflects core American values and fearlessly uses analytical approaches to solving our many problems. I propose we do that without delay. The American Cocktail Party’s goal will be to “serve the people of the United States by creating an excellent blend of good government and personal freedom.”

I would volunteer to be the party’s first presidential candidate, but I’m wary of taking on such heavy responsibility. I wouldn’t vote for myself. As a fully mature adult, I might need to take a nap when the red phone rang, and that would not be good. I will, however, respond to what is expected to be a huge groundswell of interest by serving as party chairman.

Unlike me, the Cocktail Party will be constantly on the alert. After all, it always is meeting time somewhere. Unlike the Tea and Coffee parties, the Cocktail Party will not be automatically against anything, and we will shoot straight arrows rather than warm fuzzies at problems.

The party will encourage grass-roots participation up to a point. The problems are obvious, so Cocktail partiers will save a lot of time by leaving it up to the chairman (me) to describe the issues. Anyone may propose problem solutions; however, the party platform will be developed by a small committee. The planks will be specific, not a bunch of generalities. The Cocktail Party will back candidates who sign statements pledging support for at least 90 percent of the actions recommended by the party. Voters will actually know what they are voting for!

Leaders of the American Cocktail Party will consider all ideas, but scant attention will be paid to gutter-sniping from the extreme left or right. Instead, Cocktail partiers will march straight down the middle, advancing Old Glory as the standard of a nation steadily moving forward. We may stagger slightly at times, but we shall never fall or retreat.

What do you think? Want to sign up? The party starts at 5 p.m. everywhere.