creators.com opinion web
Liberal Opinion Conservative Opinion
Mark Shields
Mark Shields
26 Jul 2014
Guns in the Workplace, NOT for Pro-Gun Politicians

Its official title is the "Safe Carry Protection Act," and when it was signed by Georgia's Republican Gov. … Read More.

19 Jul 2014
Nobody Asked Me, but ...

From time to time, the late New York sports-writing legend Jimmy Cannon used to do a column composed of witty,… Read More.

12 Jul 2014
The Most Reliable Poll of All

I dimly recall being rousted out of my bunk bed as a young child before sunrise on Oct. 27, 1948, so I could … Read More.

"If You Can't Drink Their Booze"

Comment

The late and legendary speaker of the California State Assembly, Jess Unruh, laid down to his legislative colleagues tough rules for their dealings with the free-spending lobbyists then much in vogue in Sacramento:

"If you can't drink their booze, take their money, sleep with their women and then vote against 'em, you don't belong in politics."

In the fall of 2007 in Washington, D.C. — where money doesn't simply talk, it roars — our need for legislators gutsy enough to pass Jess Unruh's test became even more acute when The Washington Post's Jeffrey Birnbaum wrote what the "smart money" on Capitol Hill and in New York had been openly assuming. Senate Majority Leader Harry M. Reid, D-Nev., had, according to executives and lobbyists, informed private equity firms that "a tax-hike proposal they have spent millions to defeat will not get through the Senate this year."

It is true — as Jim Manley, Reid's spokesman, pointed out — that it is doubtful in the closing weeks of the congressional session "whether there is sufficient time to address the appropriate tax treatment of private equity funds." But the ugly political truth remains: The privileged tax status of these preternaturally prosperous private equity and hedge fund managers — to have their earnings taxed at the reduced capital gains rate of 15 percent instead of the standard tax rate of 35 percent — will remain the law of the land (with no tax increases in a presidential election year) well into 2009.

The words in opposition of then-Rep. and now Sen. Byron Dorgan, D-N.D., in an earlier debate over cutting the capital gains tax are still timely: "Why don't we go all the way and simply take the rich off the tax rolls altogether?"

Don't just take my word for it.

Listen to what America's premier investor, multibillionaire Warren Buffett, told CNBC's Becky Quick in an interview two months ago: "In my office, I have 18 or so people there, and I ask them to compute line 63, which is their tax, and then add payroll taxes, and compare it to line 43, which is their taxable income. And these people who make anywhere from $50,000 to $750,000 a year ... and the lowest person in the office pays a higher rate than I do. I paid 17.7 percent last year, counting payroll taxes. ... The (employees) average was twice mine."

But what about the private-equity managers? Buffett: "Those fellows say they fix up companies and they get paid for doing that. On balance, they're paying a 15 percent tax rate on that and no payroll taxes, and somebody that fixes up the restroom is paying 15.3 percent in payroll taxes, jut to start with." Thus, the individual who cleans the restroom "for peanuts pays a higher tax rate than people who fix up companies (being paid) hundreds of millions of dollars annually in income."

With only a small handful of exceptions — most conspicuously Iowa GOP Sen. Chuck Grassley — Republicans, following the lead of the Bush White House, defend the favored treatment of the 15 percent capital gains tax-rate — which is intended to reward people for risking their own money in an investment — for these private-equity moguls who are managing other peoples' money, not investing their own. This ought not to surprise us, because Republicans react to any tax increase, even one demanded by fundamental justice and human decency, like a vampire reacts to a crucifix.

But what will congressional Democrats answer when their grandchildren one day ask them, as they certainly will: Why in 2007 did you allow billionaires to preserve in federal law an indefensible tax subsidy for themselves? This is not a proud moment for the party of Andrew Jackson.

To find out more about Mark Shields and read his past columns, visit the Creators Syndicate web page at www.creators.com.

DISTRIBUTED BY CREATORS SYNDICATE INC.

COPYRIGHT 2007 MARK SHIELDS



Comments

0 Comments | Post Comment
Already have an account? Log in.
New Account  
Your Name:
Your E-mail:
Your Password:
Confirm Your Password:

Please allow a few minutes for your comment to be posted.

Enter the numbers to the right:  
Creators.com comments policy
More
Mark Shields
Jul. `14
Su Mo Tu We Th Fr Sa
29 30 1 2 3 4 5
6 7 8 9 10 11 12
13 14 15 16 17 18 19
20 21 22 23 24 25 26
27 28 29 30 31 1 2
About the author About the author
Write the author Write the author
Printer friendly format Printer friendly format
Email to friend Email to friend
View by Month
Michelle Malkin
Michelle MalkinUpdated 1 Aug 2014
David Limbaugh
David LimbaughUpdated 1 Aug 2014
Linda Chavez
Linda ChavezUpdated 1 Aug 2014

17 Sep 2011 Will Rick Perry Be the Michael Dukakis of 2012?

4 Aug 2007 The Clinton Campaign's Tough-Guy Shorthand

5 May 2007 Iowa and New Hampshire Still Two Most Important States in 2008