Tax the Rich, the Cartoon

	December 10, 2012
THIS WEEK
Above a certain age, almost everyone in America remembers — and loves — Lou Asner, the delightful curmudgeon who played in two of the nation’s most cherished TV series, The Mary Tyler Moore Show and Lou Grant. Asner has moved onto the shady side of 80 and isn’t working much these days. But the veteran actor did pop back up onto the public stage last week to deliver a mighty — and, yes, delightful — blow against America’s ongoing concentration of income and wealth. In this week’s Too Much, we have more on this wonderful new Ed Asner contribution to our national political discourse. Also this week: We explore why billionaires with yachts that run longer than football fields need more space when they take to the high seas — and why we seem to be trusting each other much less than we did just a generation ago.
GREED AT A GLANCE
The Great Recession has been hard on American higher ed. Faculty have lost jobs, students opportunities. But not everyone on campus is feeling the pain. Compensation for major college football coaches has actually increased faster than corporate CEO pay since 2007. Leading the pack: Alabama head coach Nick Saban, now pulling in $5.5 million a year. Colleges are even paying coaches a fortune not to coach. The University of Tennessee last month fired a head coach who still had four years left on his contract. Tennessee's athletic department, to pay off the cash still owed the coach and his assistants, will now not be making $18 million in contributions to the university, money that had been slated for academic scholarships. The overall pay scene, says North American Association of Sports Economists president Raymond Sauer, has become “shameful.” Activists at the Other 98% are launching a new media blitz against taxpayer subsidies for Big Oil. One ad that may soon grace your TV screen opens dramatically with a power suit declaring, “Here at Exxon we hate your children.” Continues the smug speaker: “We all know the climate crisis will rip their world apart. But we don’t care, because it’s making us rich.” Just who might that “us” include? How about Exxon Mobil CEO Rex Tillerson. The oil colossus revealed last week that Tillerson will see his salary jump to $2.72 million come January 1. Also headed in CEO Tillerson's direction: a $4.59 million bonus and a stock award worth $19.6 million, at Exxon’s share price last week. The total package: just under $27 million. In 2011, Tillerson pocketed $25.2 million . . . The mega yacht Octopus cost billionaire Paul Allen $200 million to build back in 2003. The boat stretches 416 feel, plenty long enough, non-billionaires might assume, to carry any toy a mega yacht owner might ever need. But billionaires have needs the rest of us simply can’t fathom. Enter the “support yacht,” the “floating garage” that many of our uber now have trailing alongside their megas. The Dutch boatmaker Amels is currently hawking a new “Rolls Royce” support yacht that runs 220 feet and can even land a helicopter. Most mega yachts, of course, can also land helicopters. So why do billionaires need a separate support boat with its own heliport? Mega yacht owners, explains CNBC’s Robert Frank, don't like having to take in all the deck pillows whenever a helicopter lands.	Quote of the Week “Billionaires warn higher taxes could prevent them from buying politicians.” Headline from the New Yorker magazine Borowitz Report, a look at the “news reshuffled,” December 9, 2012
PETULANT PLUTOCRAT OF THE WEEK
Capitol Hill's red-hottest rhetoric may now be coming from Darrell Issa, the California congressman who's charging that President Obama “has vilified this so-called 2 percent” with his push to let the top U.S. tax rate rise from 35 to 39.6 percent. Adds Issa: “Vilifying people and then punitively taxing them is un-American.” To what do we owe this grumpiness explosion? Poor Darrell Issa has had an especially rough last several months. First came word that Issa has lost his ranking as the second-richest member of Congress. Roll Call’s latest annual tally drops him to number three. Then burglars last month descended on Issa’s manse in San Diego County and swiped heirloom jewelry worth $100,000. That loss leaves Issa with a net worth that Politico estimates at no less than $215 million.
PROGRESS AND PROMISE
The reliably right-wing on-air personalities at Fox News don’t much like the latest animated “fairy tale” to hit the YouTube circuit. Not hard to understand why. This latest cartoon — a political “fable” narrated brilliantly by veteran Hollywood actor and activist Ed Asner — may be the cleverest eight-minute history of America’s last three decades of growing inequality available anywhere. Long-time California teacher union communicator Fred Glass posted the video last week, and unions and other groups are already using it to help block any extension of the Bush-era tax cuts for America’s most wealthy. Glass wrote the script for this new Tax the Rich short. Labor cartoonist Mike Konopacki did the wonderful art. For the prequel to the history this new animation relates, check online for the intro to Too Much editor Sam Pizzigati's new book, The Rich Don’t Always Win: The Forgotten Triumph over Plutocracy that Created the American Middle Class.	Take Action on Inequality Will fear of falling — off the “fiscal cliff” — end up saving the Bush tax cuts for the nation’s most affluent 2 percent? Join this week’s protests against another tax giveaway online and on site.
inequality by the numbers
	Stat of the Week If lawmakers allow the Bush tax cuts to remain in effect on income from $250,000 to $1 million, as some members of Congress are now suggesting, households with cash incomes above $1 million would receive an average additional tax cut of $31,610 in 2013, calculates the Center on Budget and Policy Priorities.
IN FOCUS
The Never-Ending Quest for Tax Red Herrings The political friends of America's rich aren't aiming to convince us that higher taxes on high incomes make no sense. They're just hoping to keep us distracted. Why do so many lawmakers in Congress oppose raising taxes on America’s wealthy, even just a little? The answer: We’ll never really know for sure. Lawmakers might deep down oppose tax hikes on the wealthy, for instance, because their wealthy campaign contributors don’t want to pay any more in taxes. Or they might oppose bigger tax bills for millionaires simply because they don’t want to pay Uncle Sam a cent more of their own million-dollar incomes. Lawmakers under the influence of either of these motives would, of course, never openly admit to them. How could they — and politically survive? Simple political reality demands that rich people-friendly lawmakers must solemnly proffer much more noble rationales for zealously shielding rich people’s income from taxes. Raising taxes on high incomes, we've been assured since long before the “fiscal cliff” debate, will discourage small business “job creators.” Higher taxes on the rich, we're told, always backfire and never generate the revenue anticipated. These claims make for effective sound-bites. But do they match up with facts on the ground? Last week Northwestern University’s Institute for Policy Research hosted a congressional briefing that sought to speak to those facts. The briefing — entitled Taxing the Wealthy: What Does the Research Show? — brought to Capitol Hill top academic tax analysts, and these analysts had a good many facts to share, to the distinct unease of the apologists for the awesomely affluent who happened to stop by. What do the facts tell us about those small business “job creators” who'll suffer so, as friends of the fortunate claim, if tax rates on high incomes rise? The facts don't show much potential suffering. Just under 70 percent of American taxpayers making over $1 million a year, U.S. Treasury Department figures show, do indeed report small business income on their tax returns. But these millionaires who do report small business income average only around 5 percent of their income from small business operations. In other words, we’re talking investment bankers with hobby ranches in Montana here, not small business folks creating good jobs in their own local communities. But won’t those investment bankers just flee to lower-tax pastures if Congress opts to hike the tax rates on their incomes? Won't that exodus just negate the revenue boost that raising taxes on the rich is supposed to create? Charles Varner, a fellow at Stanford University’s Center for the Study of Poverty and Inequality, has been researching what typically happens when governments raise taxes on taxpayers of major means. Varner and his colleagues looked closely at tax receipts in New Jersey and California after these two states enacted new “millionaire’s taxes” in 2004 and 2005. In California, the top tax rate rose from 9.3 to 10.3 percent. After the increase, out-migration of high-income Californians actually fell. But California, skeptics might argue, occupies a great deal of territory. A deep pocket upset about a tax hike has to travel a good bit to leave California. True enough, but deep pockets in New Jersey operate in a totally different environment. A New Jersey millionaire who works on Wall Street could easily have chosen to move into lower-tax New York State or Connecticut after New Jersey’s millionaire’s tax went into effect. A New Jersey millionaire working in Philadelphia could have chosen to relocate in lower-tax Pennsylvania. But these New Jersey millionaires, in real life, opted overwhelmingly to stay put. Researchers, Stanford’s Varney explained at last week's congressional briefing, have found similar patterns in Canada between provinces with different tax rates and in Switzerland between cantons. What about the bigger picture? Does an entire nation that raises taxes on the rich risk triggering a rich people’s exodus? France, starting next month, will be levying a 75 percent tax on income over $1 million euros, about $1.28 million. Will high-rollers in France be rushing to end their French connection? Research can help on this question, too, suggests Varney. Tax rates on high incomes do already vary between one European nation and the next, and investigators have closely studied the migratory behavior of one category of European affluent: star professional soccer players. These soccer stars can ply their trade in any number of countries. They can move from a high-tax nation to a low-tax nation and easily make as much money in their new locale. They may, in fact, be the most mobile mega millionaires on the face of the earth. These uniquely mobile soccer stars, the research shows, do appear to be sensitive to taxes, but not nearly as “super-sensitive” as might be expected. And that doesn’t surprise Stanford’s Varney. Moving carries costs, he notes, everything from the monetary cost of having to pick up stakes and shift somewhere else to the social cost of losing easy geographic access to networks of friends and colleagues. Varney’s basic point: “Economies of place,” as he noted at last week’s Capitol Hill briefing on the research around taxing the wealthy, remain “significant even for people at the top of the income distribution.” Varney doesn’t expect any mass exodus of the wealthy from France after the new year’s 75 percent top French tax rate kicks in. The chances of a mass deep-pocket exit in the United States? Even slimmer. If President Obama gets all of the tax hike he’s now seeking in the “fiscal cliff” negotiations, the top U.S. tax rate will nudge up only to 39.6 percent.	New Wisdom on Wealth Eric Michael Johnson, The Gospel of Wealth Fails the Inequity Test in Primates, Scientific American, December 6, 2012. Forget survival of the fittest. Charles Darwin actually celebrated mutual aid. Karl Grossman, Tax the Rich, Then Tax Them Again, CounterPunch, December 7, 2012. Tax rates back in the 1950s and 1960s more than doubled today's top tax rate. John Cavanagh and Robin Broad, It's the New Economy, Stupid, The Nation, December 17, 2012. To secure a better future, efforts to create jobs and curb inequality need to also address threats to our environment and democracy.
new and notable
Why Do We All Feel So Suspicious? Eric Uslaner, Income Inequality in the United States Fuels Pessimism and Threatens Social Cohesion. A working paper from the Center for American Progress, December 2012. The widening gaps in income that divide Americans, notes this sobering new study from political scientist Eric Uslaner, are tearing away at our social fabric. Growing inequality, his data show, leave people “less likely to believe that what affects me affects you,” a dynamic that drives “greater polarization” and “makes finding common ground on policy issues more difficult.” One memorable study stat: The share of Americans who feel that “most people can be trusted” has dropped since 1968 from 56 percent to just 34 percent. Inequality, notes Uslaner’s data analysis, accounts for “almost all of this drop.”	Web Gem Population Health Forum/ A stellar jumping-off point into the research that links inequality and life expectancy, both in the United States and around the world.