GOP Should Drop Norquist and Follow MaherBy Lee Cary
Republicans should forget the tax policies of Grover Norquist and embrace Bill Maher's California model for fiscal success.
Purported comedian and political pundit Bill Maher recently touted California's success in turning a state budget deficit into a surplus. Maher said,
Egberto Willies, commenter in the Daily Kos piece where Maher is quoted, wrote, "Republicans have always loved cutting taxes on both the backs of the working middle class and at the expense of exploding budget deficits to appease their plutocratic masters."
The Republicans should link Maher's equation - "cut spending AND raise taxes" - with Willies' observation that Republicans love to pile the tax burden on the "working middle class" and take the initiative.
Here are three suggested changes in the federal tax code that, if pushed by the GOP, would demonstrate an enhanced sensitivity to assuring fairer federal taxation. None involve new taxes - just the elimination of tax deduction loopholes that favor the rich.
1. Remove state income taxes as a deductable item from the federal tax code for those making over $500,000.
Those making less than a half-million dollar annual income would still deduct their state income taxes, but the rich would be called on to carry a fairer share of the federal tax burden. And that's, well, only fair.
For example, California's state income tax is 10.55% on income over $1 million. Many Hollywood stars, like Maher, who overwhelmingly support President Obama and the Democratic Party, would willingly forgo that deduction inasmuch as they have repeatedly demonstrated their heart-felt sympathy for the tax burden now disproportionately carried by the "working middle class".
New York residents like Mayor Bloomberg and Hillary Clinton, with incomes over $500,000, pay 8.95% state income tax. It's time for the rich in the Empire State to pay a fairer share of federal taxes by forgoing their state income tax deduction.
Here are a few income tax levels in other states: Ohio - 5.925% on income over $200,000; Illinois - flat 3% of federal adjusted gross income with modifications; Pennsylvania - flat 3.07% on all income; New Jersey - 8.97% on income over $500,000; Minnesota - 8.5% on income over $74,780; and Wisconsin - 7.75% on income over $225,000.
Since all these Blue States supported President Obama in 2012, the rich who make over a half-million dollars would gladly support a fairer share distribution of the federal tax burden. It is, after all, what they voted for, and the GOP should give it to them. With our federal debt level, we need the money.
2. Remove city income taxes as a deductable expense from the federal tax code for those making over $200,000.
Here's a sample of Blue State municipalities that levy city income taxes: Denver, Colorado charges $5.75 per month on compensation over $500; Wilmington, Delaware has a flat 1.25% tax on income; Baltimore, Maryland has an income tax of 3.05%; Detroit, Michigan taxes residents 2.50% and non-residents 1.25%; New York, New York income tax rates top-out at 3.648%.
3. Remove real estate taxes as a deductible item for all those paying over $15,000 in property taxes.
There is no community more vocal in its support for the Democratic Party and the current administration in Washington D.C. than those in the professional entertainment business. Most live in multi-million dollar mansions. Like Michael Moore, they are the one percenters, and include media luminaries George Clooney, Melanie Griffith and Antonio Banderas, Jay-Z and Beyonce, Jennifer Lopez, Eddie Murphy, Gwyneth Paltrow, Will Farrell, Tom Hanks, and Morgan Freeman -- to name a few.
These stars would surely support a fairer tax code by giving up the property tax deduction on their homes -- in Oprah's case, her multiple homes.
And, the mega-rich living outside of the entertainment arena would welcome paying a fairer share of federal taxes by forgoing their property tax deduction, too. Persons like Jeffery Immelt; Warren Buffett, Bill Gates, Haim Saban, Jon Stryker, telecom billionaire Irwin Jacobs who donated $2,000,000 to the Obama 2012 Campaign, and Chicago media mogul Fred Eychaner.
None of these suggestions for federal revenue enhancement represent new taxes. They merely eliminate tax loopholes that favor the rich and lighten the heavy weight of taxation now resting on the shoulders of the "working middle class."
As a final suggestion to fulfill the "raise taxes" half of Maher's equation of "cutting spending AND raising taxes," Republicans should note the top 20 donor groups, by organizational affiliation, to Barack Obama's 2012 campaign.
1. University of California, $1,212,245
2. Microsoft Corp., $814,645
3. Googe Inc., $801,770
4. U.S. Government, $728,647
5. Harvard University, $668,368
6. Kaiser Permanente, $588,386
7. Stanford University, $512,356
8. Deloitte LLP, $456,975
9. Columbia University, $455,309
10. Time Warner, $442,271
11. US Department of State, $417,629
12. DLA Piper, $401,890
13. Sidney Austin LLP, $400,883
14. Walt Disney Co., $369,598
15. IBM Corp., $369,491
16. University of Chicago, $357,185
17. University of Michigan, $339,806
18. Comcast Corp., $337,628
19. U.S. Department of Justice, $334,659
20. U.S. Department of Health & Human Services, $309,956
Academics, lawyers and federal government employees dominate the list.
Perhaps it's time to shield federal employees from being strong-armed by their superiors -- as undoubtedly many are -- when pressured to contribute to national campaigns. Federal employees should be prohibited from contributing. It's too...inside baseball.
Also, contributions from employees at universities that receive millions in federal research grants should be strictly limited. The current arrangement suggests the presence of the Kickback Factor prevalent in the granting of Chicago city contracts.
[Hat tip: James Petersen]
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