This will surprise few readers of FA:
A group of House Democrats has formed its own “Gang of Six” to push for progressive tax reform — in which the expiration of the Bush-era tax rates for the wealthiest Americans is “just the beginning.”
This is the platform of a group of “progressives” in Congress.
“In response to the call for progressives to draw a red line in the fiscal cliff sand, here is our big picture stance on corporate and individual tax reform,” Rep. Michael Honda (D-Calif.) said in a statement. “Six progressive tax principles from a new Gang of Six. The expiration of the Bush tax cuts for the wealthiest Americans is just the beginning of the discussion.”
The progressive group also includes Reps. Jan Schakowsky (D-Ill.), Keith Ellison (D-Minn.), John Conyers (D-Mich.), Raúl Grijalva (D-Ariz.), and Barbara Lee (D-Calif).
All members of the Progressive Caucus.
They have six demands:
The group outlined six tenets of a progressive tax policy. They say it must be revenue positive, promote responsible corporate behavior, be a “global system,” have “fair rates” for the wealthiest taxpayers, reexamine expenditures that benefit the wealthy, and protect the poor and elderly.
There’s that word again- “fairness.”
Progressives want to do away with the capital gains tax:
“To maintain or strengthen progressivity, we should end one of the leading contributors to after-tax income inequality in this country, the special tax breaks for investment income,” the group said in its statement, released Thursday. “Workers who get their salaries from wages often pay a higher effective tax rate than wealthy individuals like Mitt Romney and Warren Buffett who make most of their income from selling stocks and bonds or from dividends.”
But even Matt Yglesias thinks capital gains tax rates are a good thing:
And the thinking is that world number one where people with valuable skills take a large share of their labor income and transform it into capital goods is ultimately a richer world than the world in which such people just go out to a lot of fancy dinners.
That’s the theory, at any rate. It’s a pretty solid theory, it’s in most of the textbooks I’ve seen, and it shapes public policy in basically every country I’m familiar with. Even researchers like Thomas Piketty and Emmanuel Saez (see “A Theory of Optimal Capital Taxation”) who dissent from the standard no taxation of investment income position think capital income should be taxed more lightly than labor income.
Speaking of progressive, the Communist party of the US claims to be “progressive”:
The Communist Party has an unparalleled history in the progressive movement of the United States
Just so we’re clear.
For more explanation of how parallel progressives and Communists are, go here.
But back to that “fairness” thing.
Barack Obama wants taxes increased on the “rich” but not for the purpose of revenue. As previously noted, those taxes will net only $80 billion per year thrown at a $1250 billion deficit. Obama wants to be seen as “punishing” the well off in the guise of “fairness.” “Fairness” appeals greatly to those who lack the ambition gene.
Obama has a history of seeking “fairness.”
When asked why he would raise the capital gains tax rates even though it would not increase revenue, Obama replied:
“I would look at raising the capital gains tax for purposes of fairness.”
Here’s the video
Lenin was also big on fairness. Obama clearly is a progressive, but if it is not Communism it’s certainly a waypoint on the road to Communism.
Now it’s reported that “centrist” Republicans are split on voting for “middle class” tax cuts.
A number of more centrist Republicans, however, have signaled they are open to the idea of extending tax rates only for the middle class.
The thinking behind the strategy is that Republicans will find themselves boxed in at year’s end if negotiations to avert the “fiscal cliff” have stalled and Democrats are pressuring the GOP to pass legislation to protect 98 percent of taxpayers from a marginal rate hike.
“I don’t want to be in a position, at the end of the month, where because of inaction, or I should say because of a breakdown in negotiations, the only thing the Senate is able to do is to send over what they send over, which will be extending the tax rates for everybody by whatever percent,” Rep. Charlie Dent (R-Pa.) said in an interview.
This is the same Neville Chamberlain approach that worked so well for George HW Bush. (Search “read my lips.”)
Now is the time for the GOP to put its foot down and just say no until there are sufficient and legitimate spending cuts.
After all, as Nancy Pelosi would say- dissent is the highest form of patriotism.