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Billionaires say okay to a bit of higher taxes.
They haven't ever signed any pledges to Grover Norquist, but it's still something of a breakthrough when a bunch of the nation's leading business honchos yield to the Obama administration's firm stance that Americans in the top two percent of incomes should pay more taxes. That turnabout emerged in a conference call with reporters arranged by the Business Roundtable Tuesday.

Previously, the elite corporate lobby group had steadfastly supported an extension of all the Bush tax cuts to everyone regardless of income. The change, however grudgingly taken, seems to indicate that White House's dual approach in the past month for getting its way on a modest tax increase on the rich is paying off:

The differing strategies—highly public meetings with corporate America and private arm-twisting with Wall Street—both appear to be aimed at winning popular support for higher taxes on the wealthy. The trade-offs being roundly fought over in Washington, like what government programs may be cut and which entitlements may be spared, are less important in this effort to muster highly compensated chieftains whose support for tax increases will provide cover for Congressional Republicans wary of being seen as too quick to compromise on higher tax rates.

What’s more, the political symbolism of some of the wealthiest Americans’ saying they support higher taxes on the rich takes a bit of the sting out of the idea of raising rates, for both Democrats and Republicans. Indeed, by appealing to both camps and enlisting their support, President Obama hopes to neutralize potential critics, according to allies of the president on Wall Street.

It's not exactly the crumbling of the plutocracy. For one thing, willingness on the part of a growing number of top bankers, hedge-fund managers and leaders in the non-financial end of American business seems predicated on their fears of how uncertainty will affect the economy if a compromise on the fiscal impasse isn't reached. So they're moving in their own interest. And their cooperation now, for what is, at worst, a return to Clinton-era tax rates for the richest Americans, could buy them support in the White House later for a big item on their agenda: lowering the corporate tax rate. So they're moving in their own interest.

While some top executives, like Lloyd Blankfein of Goldman Sachs, have been talking tax increases for some time, The New York Times reporters Nelson D. Schwartz and Jonathan Weisman note that among the more than 100 CEOs who signed a letter to the president and Congress on resolving the impasse are conservatives such as Rex Tillerson of Exxon.

The letter stated in part:

Compromise will require Congress to agree on more revenue—whether by increasing rates, eliminating deductions, or some combination thereof—and the administration to agree to larger, meaningful structural and benefit entitlement reforms and spending reductions that are a fiscally responsible multiple of increased revenues.
The problem with that formulation is that it entails a modest sacrifice on the part of the nation's oligarchs who can easily afford it without pain since the lion's share of economic gains of the past three decades have gone into their pockets. The sacrifices being sought at the lower ends of the wealth and income spectrum, on the other hand, are likely to cause serious harm to people already in pain who have been shouldering big sacrifices for those same decades. That ought to be remembered before breaking out the balloons and confetti.

Originally posted to Meteor Blades on Wed Dec 12, 2012 at 08:59 AM PST.

Also republished by Daily Kos.

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Comment Preferences

  •  We will do the right thing (10+ / 0-)

    but only if you let us screw you over .
    That's what I'm hearing .

    "Drop the name-calling." Meteor Blades 2/4/11

    by indycam on Wed Dec 12, 2012 at 09:05:33 AM PST

  •  Now we'll have to see if our leaders insist (8+ / 0-)

    on bargaining the Social Safety Net just to fix the economy the wealthy keep breaking.

    The Class, Terror and Climate Wars are indivisible and the short-term outcome will affect the planet for centuries. -WiA "When you triangulate everything, you can't even roll downhill..." - PhilJD

    by Words In Action on Wed Dec 12, 2012 at 09:09:51 AM PST

    •  Why should people who didn't share in 30 yrs (10+ / 0-)

      financial gains, 98% of us, have to share in the sacrifice to repair the damage the 2% did to the worlds economy?

      Tax the wealthy, corporations, and put tariffs on imported products American corporations make overseas.

      Raise the tax cap on SS. Problem solved for 50 yrs. Bargain for Medicare drugs. Problem beginning to be solved.

      Tax trades on Wall St.

      When the economy gets better and more people have more money than increase taxes on the rest of us.

      Now is the time to grind the faces of the rich powerful. They've ground ours to nubs for 40 yrs.

      •  Tax revenues increase (2+ / 0-)

        when the economy gets better and more people have more money. No need to increase the taxes on the rest of us (unless we start fighting two wars we can't pay for).

        The central message of Buddhism is not "Every man for himself." -- Wanda

        by the autonomist on Wed Dec 12, 2012 at 03:45:54 PM PST

        [ Parent ]

        •  We are the most lightly taxed people in the (1+ / 0-)
          Recommended by:
          Words In Action

          developed world. And I think one of the reasons we hate taxes so much is that we get nothing but tanks and other military hardware, most of which is junked without ever having blown anything or anybody up. And we have to survive to 65 to get any hope of secure healthcare. We live pretty rough in the US of A, and we are always angry about it.

          Denmark has the happiest population in the world and are the most heavily taxed in the world. The difference is they get things of real value to their everyday lives, infrastructure, education, healthcare and the security of a dignified retirement. You know... civilization.

          There is tax gold in them thar high- rises on Wall St. We should mine it. End off shoring of assets and tame and tax our wealthy back to a semblance of good citizenship. Tariff American corporations for importing products into our country we used to make here. Such a lot to do.

          But we should all pay some income tax or the repugs and 1%ers can say, and have been saying, most Americans pay no taxes, only the noble rich. Of course not true. Payroll, sales taxes, and fees fall more heavily on the 98%, but our opponents lie and lie and lie.

          We really need a radical restructure of our tax code and a revitalization of our commons, but we can't.

          Too bad about that 2010 election thing.  
           

  •  Big Sacrifice (9+ / 0-)

    As we saw with Romney (and as Buffett always says) - they don't pay the tax anyway.  They find a way to make everything capital gains or make it so they pay nothing at all.

    So who gets hurt by this increase on income tax rates?  Some executives who are a couple steps down the ladder; pro athletes, news anchors, other entertainers, and some doctors and lawyers.

    CEOs will just call more of their salary "dividends" or "distributions" or "carried interest" and let some other sucker pay the higher taxes.

  •  2/3 of the average total income of millionares is (9+ / 0-)

    from capital gains. It's also the secret behind how hedge funds are so profitable (carried interest as a capital gain no taxed as regular income), furthermore they are much more afraid of the inheritance tax going up.

    They are willing to deal on income tax rates because that's not where the money is!

    -1.63/ -1.49 "Speaking truth to power" (with snark of course)!

    by dopper0189 on Wed Dec 12, 2012 at 09:24:32 AM PST

    •  Exactly, the deal has 2 b income & cap gains equal (2+ / 0-)
      Recommended by:
      tb mare, shoeless

      ....at the higher rates plus abandoning the carried interest loophole plus letting the estate tax increase as planned.

      These are the key elements of Simpson-Bowles (without the entitlement cuts).

      Add defense cuts and a stimulus and we start talking about some real money behind a real plan.

      Let all Bush tax cuts expire and , bring on the Sequestration cuts to defense.

      by kck on Wed Dec 12, 2012 at 10:24:34 AM PST

      [ Parent ]

    •  And yet they still insist on entitlement cuts (2+ / 0-)
      Recommended by:
      shoeless, SouthernLiberalinMD

      Even though that IS where most of their beneficiaries' money comes from.

      "Liberty without virtue would be no blessing to us" - Benjamin Rush, 1777

      by kovie on Wed Dec 12, 2012 at 10:26:39 AM PST

      [ Parent ]

  •  cliff (4+ / 0-)
    Recommended by:
    ferg, shoeless, YucatanMan, DSPS owl

    It ain't a cliff--not a precipice either.  Let all the rates return to pre 2001 levels--and increase spending for social services--and cut the military budget.  Also, the correct date of the cliff is 12/18 according to House rules for introducing a new bill.

    Apres Bush, le deluge.

    by melvynny on Wed Dec 12, 2012 at 09:26:27 AM PST

  •  So what?!?! The expiration will happen regardless! (2+ / 0-)

    This is not an area for bargaining!  There is no compromise necessary!  I do not have to yield an important part of my life when the milk reaches its expiration date - it is going to happen anyway!

    We should not be throwing away bargaining chips on something that will happen anyway - we should be threatening to raise the top marginal rate 4% extra and let them throw us a chip to prevent that from happening!  And if they do not then over the cliff we go!

    Please do not be alarmed. We are about to engage... the nozzle.

    by Terrapin on Wed Dec 12, 2012 at 10:10:36 AM PST

  •  Opinion Polls (1+ / 0-)
    Recommended by:
    shoeless

    of the top 2% have pretty consistently showed them in favor of raising taxes on the wealthy, in line with public opinion polls generally.  But it's welcome news to see some of the most vocal opposition conceding to the inevitable, I suppose.

    Things work out best for those who make the best of the way things work out.

    by winsock on Wed Dec 12, 2012 at 10:22:05 AM PST

  •  Wouldn't you know? (3+ / 0-)
    Recommended by:
    shoeless, Eric Nelson, DSPS owl
    For one thing, willingness on the part of a growing number of top bankers, hedge-fund managers and leaders in the non-financial end of American business seems predicated on their fears of how uncertainty will affect the economy if a compromise on the fiscal impasse isn't reached.
    Naturally.

    It would be very hard on certain people not to be eligible for Medicare until age 67.  It's hard enough waiting until age 65, when you're a 62-year-old whose body is wearing out owing to a lifetime of manual labor in all weathers.

    I hope raising the age can be avoided.

    "Religion is what keeps the poor from murdering the rich."--Napoleon

    by Diana in NoVa on Wed Dec 12, 2012 at 10:24:56 AM PST

  •  There's a catch, of course (7+ / 0-)

    As I commented earlier today:

    Oh happy day! We got our much longed-for permission slip from our financial and moral betters to ever so slightly tweak their top tax rates upward, provided, of course, that we cut entitlements and other programs that lower-income people depend upon, and cut those pesky corporate tax rates that are so hurtful to these job creators--to quote The Godfather, we're not communists, after all.

    Unlikely Backers in a Battle Over Taxes
    By NELSON D. SCHWARTZ and JONATHAN WEISMAN
    Published: December 11, 2012

    A broad swath of the nation’s leading chief executives dropped its opposition to tax increases on the wealthiest Americans on Tuesday, while the White House quietly pressed Wall Street titans for their support as well.

    Before Tuesday’s about-face, the Business Roundtable had insisted that the White House extend Bush-era tax cuts to taxpayers of all income brackets, but the executives’ resistance crumbled as pressure builds to find a compromise for the fiscal impasse in Washington before the end of the year.

    “We recognize that part of the solution has to be tax increases,” David M. Cote, chief executive of Honeywell, said on a conference call with reporters. “That’s the only thing that allows a reasonable compromise to be reached.”

    So far, so good--except, I suppose, the need to get their blessing to raise their taxes, something the constitutional doesn't require last time I checked.

    But wait! There's more. Some catches, it seems:

    The differing strategies — highly public meetings with corporate America and private arm-twisting with Wall Street — both appear to be aimed at winning popular support for higher taxes on the wealthy. The trade-offs being roundly fought over in Washington, like what government programs may be cut and which entitlements may be spared, are less important in this effort to muster highly compensated chieftains whose support for tax increases will provide cover for Congressional Republicans wary of being seen as too quick to compromise on higher tax rates.
    Yes, of course, those horribly overgenerous entitlement programs. How is a titan of industry to sleep at night knowing that lesser people are living so well?

    Here's how the WH is likely to justify its efforts to get these people on board:

    What’s more, the political symbolism of some of the wealthiest Americans’ saying they support higher taxes on the rich takes a bit of the sting out of the idea of raising rates, for both Democrats and Republicans. Indeed, by appealing to both camps and enlisting their support, President Obama hopes to neutralize potential critics, according to allies of the president on Wall Street.

    President Obama’s supporters cited the example of Frederick W. Smith, the chief executive of FedEx. Last week, Mr. Smith signaled he was not angered by higher tax rates for the wealthiest individuals, a centerpiece of President Obama’s plan to reduce the deficit and a key sticking point for Republicans in Congress.

    But here's the real reason these uber-wealthy CEO's are now ok with raising their top tax rates, which most of them will never have to pay anyway:
    While most business leaders now say they are willing to support increases in tax rates for individuals as well as cuts in entitlement spending, their stance in favor of lower corporate tax rates could actually benefit their bottom lines in the long run.
    Yep, in exchange for what for most of them will be a largely meaningless increase in the top income tax rate (you don't really believe that all those deductions, exemptions and credits are going away, do you?), they expect to see entitlement programs and other spending on the less well-off slashed, and corporate tax rates--i.e. how they make most of their money--actually go down.

    You know, because jobs. Uhuh.

    Look, I get how Obama has to kiss their ass. But we shouldn't kid ourselves as to what's really going on here. They could give a rat's ass about the deficit, budget or regular people. They are protecting their money, period, as always.

    Because they have no souls.

    "Liberty without virtue would be no blessing to us" - Benjamin Rush, 1777

    by kovie on Wed Dec 12, 2012 at 10:25:27 AM PST

  •  How very considerate of Wall Street CEOs (4+ / 0-)

    especially considering that the American taxpayer rescued Wall Street in 2008!!

    It's not easy being a Floridian: PS I'm a lawYER now; no longer a lawSTUDENT.

    by lawstudent922 on Wed Dec 12, 2012 at 10:31:28 AM PST

  •  Guess what Top 2% (5+ / 0-)

    I don't give a rats a$$ what you want to 'give' up.  You have been living off the gravy train of the other 98% for almost 4 decades.  Suck it up, pay your extra 3% in taxes and get over yourselves.  We, the people, don't give a shit about you.  

    Why do Republicans Hate Americans?

    by Caniac41 on Wed Dec 12, 2012 at 10:39:01 AM PST

  •  Tax rates (2+ / 0-)
    Recommended by:
    YucatanMan, Eric Nelson

    Sorry but we need 90% top rates.  We need to return to the state of affairs before Ronald Reagan.  We are still allowing the Repubs to set the limits of the argument too much.

    The plutocrats are crazy all right; crazy like a fox.

    •  Effective tax rates were never more than... (2+ / 0-)
      Recommended by:
      Eric Nelson, DSPS owl

      ...51% even when the top rate was 91% because of loopholes and other getarounds. But 51% would be a vast improvement over the current situation.

      Don't tell me what you believe, show me what you do and I will tell you what you believe.

      by Meteor Blades on Wed Dec 12, 2012 at 11:17:35 AM PST

      [ Parent ]

      •  So make the nominal rate around 70% (0+ / 0-)

        and put in some laws to prevent offshoring.
        Also make capital gains get taxed at same rates as income.
        And I say that as someone who's likely to get really hurt by that change. But it needs to happen.

        If they want to slash Medicare and other earned benefits, they need to really pay for it, not just a rise in income tax rates up to 37%.

        Of course, after we handed them 17 trillion dollars, I don't see why we shouldn't do all of the above, leave Medicare as it is and add a transaction tax.

        There are some things that are unforgivable. Your willingness to play political games while people suffer and die is one of them--Onomastic

        by SouthernLiberalinMD on Wed Dec 12, 2012 at 05:48:42 PM PST

        [ Parent ]

  •  The entitlements I would like to see cut (1+ / 0-)
    Recommended by:
    Eric Nelson

    1.  Congress' health plan -- eliminate and switch over to Medicare, Medicaid, or the ACA (ObamaCares!)
    2.  Congress' pension plan  -- eliminate and switch over to Social Security.
    3.  Corporate welfare  -- Stop funding any business making a profit.  No bail-outs.  No bonuses to CEO of bankrupt companies.  No paying farmers not to grow things.  
    4.  Billionaire off-shore tax haven -- eliminate this tax evasion option.

    I'm sure there's more, but real life is a'calling.  

  •   Make the Blankenfield's of the world fight for.. (0+ / 0-)

    ..what they really care about (and it's not a few points at the top marginal tax rates - they're good at avoiding those).

    ..their fears of how uncertainty will affect the economy if a compromise on the fiscal impasse isn't reached.
    It's always the $money=power so..

    Reverse the power play on the debt ceiling.

    Make corporations fight the republicans hostage taking on this. Take McConnells recent embarassing self-filibuster of a 2011 idea (of his) and throw that into the works - Debt ceiling artifice goes to executive power or eliminate it.

    All other concessions/cuts are OFF the Table. We want
     • UI benefits extended
     • tax rates hiked for top incomes
     • child care
     • job training programs
     • federal aid for schools
     • clean energy investments
     • full revenue (1.6 billion not a penny less)
     • everything else I can't think of
    For Real, give the republicans nothing. Make them cave. If they don't it'll be bad short term, yet the only method a criminal cartel understands is if they suffer the results of actions human injustices they themselves commit against us all.

    The GOP must be stopped - and imo the only way is to stop them is to hurt them financially, politically, and any other way that leaves a permanent reminder not to hurt others. This is about the future.

    That is the deal.

    mini -rant is over

  •  this is not good news: (0+ / 0-)

    "larger, meaningful structural and benefit entitlement reforms and spending reductions"

    this is the "balanced approach" Obama has been going for: a small raise in taxes on the top 2%, which can be easily reversed by a future Congress, in exchange for deep cuts in Medicare (and Social Security maybe?) which will never be replaced. can you imagine a contemporary Congress passing anything remotely like Medicare or Social Security? They have a hard time passing disaster aid!

    There are some things that are unforgivable. Your willingness to play political games while people suffer and die is one of them--Onomastic

    by SouthernLiberalinMD on Wed Dec 12, 2012 at 05:44:39 PM PST

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