Thursday, August 18, 2011

Tax the Rich!

In an OpEd over at the Socialist Worker Financial Times, David Rothkopf, , president of Garten Rothkopf, an international advisory firm that helps leaders capitalize on transformational trends in energy, climate, risk, and the global economy, and author of Superclass: The Global Power Elite and the World They Are Making writes,
Taxing the rich at higher rates, despite the cant that it drags down job creation and growth, has been a hallmark of America’s greatest expansions too, including the boom years after the second world war. The cuts in rates introduced by President George W. Bush, meanwhile, have also proved that reducing the burden on the richest brings no obvious benefits in terms of job growth, given that the decade since those cuts was the first in US history with no net job creation.

As Mr Buffett and others like him have often noted, today’s low rates for the rich are not just inconsistent with long-established US financial and social principles. They are also much lower than they at first appear, thanks to further tax breaks on capital gains, carried interest and other types of investments and flows of wealth that are enjoyed primarily by those in the upper brackets. Indeed, this is how we get to the phenomenon of Mr Buffett paying a lower tax rate than many of those in his office, as he himself has noted.

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