Cross posted from The Stars Hollow Gazette
Income equality in the United States continues to widen between the 99% and the 1%. It was one of the main issues that Occupy Wall St. brought to the forefront of the conversation on the economy and the phony concern over the deficit. One of the big issues is tax inequality, the poor and middle class pay a greater percentage of their income to the government than do the top earners. President Obama and the Congressional Democrats have proposed a minimum tax of 30 percent to individuals making more than a million dollars a year, called the Buffet Rule, after billionaire Warren Buffet who thinks that it is unfair that he pays less in taxes than his secretary. Although it has been pointed out that revenue generated from the increase would only minimally help reduce the deficit, it is wildly popular with 67% of Americans in support of its passage. Unfortunately, it didn’t have the votes in the Senate to even get to the floor for a vote. Even if it did it would never see the light of day in the intransigent House. We mustn’t tax the job creators who haven’t created jobs in the US for over a decade. We must continue to allow millionaires, like Romney, to give their children millions as a gift tax free, thanks to a tax loophole on “carried interest,” presumably one of the loopholes that would have been closed:
When the Romney campaign disclosed in December that the couple’s five sons had a $100 million trust fund, I suspected that, in setting up the fund, the Romneys used a tax strategy that allows some very rich people to avoid paying gift taxes. But it was impossible to know if this was the case without seeing their tax returns going back years. [..]
Reuters emailed the Romney campaign spokeswoman to ask how much the Romneys paid in gift taxes on assets put into the sons’ trust over the last 17 years. The spokeswoman, citing Brad Malt, the Romney family tax lawyer, answered: none.
The idea that someone could pay zero gift taxes on contributions to a $100 million trust fund may surprise people who have heard arguments that the wealthy are overburdened by gift and estate taxes. But the Romneys’ gift-tax avoidance strategy is perfectly legal.
A good discussion on whether Obama’s ‘Buffett Rule’ would bridge tax divide was had on MSNBC’s Up with Chis Hayes with University of Pennsylvania Wharton professor Betsey Stevenson, Reuters columnist David Cay Johnston, former Rep. Tom Perriello, D-Va., and Demos Vice President Heather McGhee.
This bill had very little chance of passing and was in all reality merely a political gambit to make the Republicans look like they are out of touch with the average American voter. How well that will work this early in the campaign remains to be seen.