Senate Rejects ‘Buffett Rule,’ Despite Networks’ Promotion of ‘Tax Reform’
The
mainstream media rarely like the very rich, but billionaire Warren
Buffett is the exception. The Berkshire Hathaway CEO remains unscathed,
even adored by the liberal news media due to his liberal politics.
After
all, it was Buffett who called for higher taxes on millionaires and
billionaires. His call for increased taxes was unsurprisingly embraced
by class-warfare loving Obama administration and bolstered by the media.
Obama has campaigned on the Buffett rule which would require that
people making more than $1 million a year pay at least 30 percent in
taxes (even if their earnings come from investment and are currently
taxed at the 15 percent capital gains rate).
The
broadcast networks have supported the legislation (which was rejected
by the Senate on April 16), by talking about fairness in a majority of
reports and using the White House’s own terminology of “tax reform.”
Other stories included polls showing how popular the millionaires tax
might be. ABC embraced Buffett’s secretary and her view that she is an
average citizen who just wants to be “treated fairly” when it comes to
taxes.
ABC’s
David Kerley summarized the legislation and cited public support on
April 14, saying, “The so-called Buffett Rule would require those making
more than $1 million to at least pay the same rate as the middle class,
30 percent. It’s Warren Buffett who says he shouldn’t pay a lower rate
than his secretary. And the American public seems to agree. A Gallup
poll just out shows 60 percent of Americans say Congress should pass the
Buffett Rule, 37 percent say it’s a bad idea.”
That
legislation was voted down 51 to 45 vote on April 16, despite the
media’s support for it and Buffett. In 2012, ABC, CBS and NBC newscasts
mentioned the “Buffett rule” in 26 stories. Nearly 70 percent of those
stories mentioned fair, fairness or unfair -- in keeping with Buffett
and the administration's point of view about taxing the wealthy.
That is no surprise since the liberal media have, for the past decade, supported Buffett’s complaint that the wealthy don’t pay enough taxes.
Rarely
did anyone criticize the rule or point out that the class warfare
premise it is built on is faulty. Only 2 stories (8 percent)
specifically mentioned the phrase “politics of envy” which is the other
perspective of the Buffett rule.
Liberal
proponents of the Buffett rule like Sen. Chuck Schumer, D-N.Y., were
also interviewed by the networks. He told CBS “This Morning” on April 9
that the bill was “a question of fairness,” a point he repeated
throughout the interview. He was asked if the Buffett Rule would reduce
the “inequality gap.” Schumer also mentioned Buffett’s secretary, Debbie
Bosanek, who has said she pays a 35.8 percent tax rate.
Bosanek: Cinderella or 1 Percenter?
Obama
used Bosanek as a “stage prop” during his State of the Union address,
to talk about the unfairness he sees in the tax system.
Bosanek
also appeared in a couple ABC news segments to complain about her taxes
and support her boss’s call for higher taxes on millionaires. ABC’s
Bianna Golodryga said on Jan. 26, “Debbie [Bosanek] says she still feels
like Cinderella at the ball after this experience.” Robin Roberts
gushed, “I love the relationship between the two of them [Bosanek and
Buffett].”
“But
up until a few months ago, Debbie Bosanek had never put much thought
into her tax rate or that of her boss’s. Well, today she says she’s
representing average citizens who want a voice and wanna be treated
fairly in the area of taxes,” Golodryga continued. Nowhere in that story
did Golodryga ask Bosanek how much she makes in a year.
But
according to Forbes magazine columnist Paul Roderick Gregory, Bosanek
is no pauper. By his estimate she “likely makes between $200,000 and
$500,000” a year. How could that be?
“The
IRS publishes detailed tax tables by income level … [A]n average
taxpayer in Bosaneck’s [sic] rate (after downward adjustment for payroll
taxes) earns an adjusted gross income of $200,000 to $500,000,” Gregory
concluded.
Others have also criticized Bosanek’s claim and pointed out that if she is paying a marginal tax rate of 35 percent “She’s earning over $379,150 per year in taxable income, which places here in the top 1% of income earners nationally.” So much for representing “average citizens.” Buffett has called the criticism “ridiculous.” Cato’s Chris Edwards has called Buffett’s tax story “bogus.”
Still
she was lauded by ABC’s Golodryga, who said on “World News” that
Bosanek got “a hero’s welcome, for a secretary thrust into the
spotlight.”
Income Inequality: The Foundation of Soak the Rich Rhetoric
During
his 2012 State of the Union address, President Obama said, “We can
either settle for a country where a shrinking number of people do really
well, while a growing number of Americans barely get by. Or we can
restore an economy where everyone gets a fair shot, everyone does their fair share, and everyone plays by the same rules.”
He
specifically pushed for the Buffett rule in that address, by seating
Bosanek in the gallery and saying that “asking a billionaire to pay at
least as much as his secretary in taxes? Most Americans would call that
common sense.”
The
very basis for Obama’s class warfare calls that the wealthy need to pay
their “fair share” is an economic analysis by Thomas Piketty, of the
Paris School of Economics, and Emmanuel Saez, of UC-Berkeley. According
to The New York Times they are “two academically revered, if publicly
obscure, left-leaning French economists.”
Those
economists say that median American incomes rose just 3.2% from 1979
through 2007. Many people who lived through those years likely found it
difficult to believe those statistics, but of course the administration
and many in the media used it as proof that the rich needed to be
punished with higher taxes.
However, American Enterprise Institute columnist James Pethokoukis recently exposed the problems with this data for The American, the online magazine of AEI. “But it’s just not true, according to a new study in National Tax Journal from researchers at Cornell University. (Here’s an earlier, working-paper version.)
The academics, led by economist Richard Burkhauser, don’t say the
findings of Piketty and Saez are wrong — just incredibly, massively
incomplete. According to the Cornell study, median household income – properly measured – rose 36.7%, not 3.2% like Piketty and Saez argue. That’s a big miss,” Pethokoukis wrote.
He
also quoted this conclusion from the Cornell study: “Income inequality
increased in the United States not because the rich got richer, the poor
got poorer and the middle class stagnated, but because the rich got
richer at a faster rate than the middle and poorer quintiles and this
mostly occurred in the 1980s. .. the apparent failure of the median
American to benefit from economic growth can largely be explained by the
use of an income measure for this purpose which does not fully capture
what is actually happening to the resources available to middle class
individuals.”
The
New York Times published a glowing profile of Piketty and Saez on April
16, in which they argue even the Buffett Rule “would do little to
reverse the rich’s gains.” “[T]heir proposed corrective remains far
outside the bounds of polite political conversation: much, much higher
top marginal tax rates on the rich, up to 50 percent, or 70 percent or even 90 percent
…” the Times wrote. But the Times completely ignored the new Cornell
study that shows that when everything is factored in that should be
(government transfer payments, taxes/tax credits and healthcare
benefits) the picture is of significant income growth and declining
income inequality since 1989.
