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A group of two dozen millionaires stormed Capitol Hill on Wednesday, demanding lawmakers raise their taxes.
"We want to pay more taxes," said California millionaire Doug Edwards, a former marketing director for Google (GOOG, Fortune 500). "If you're fortunate, and you make more than a million dollars a year, you ought to pay more taxes."
The millionaires want Congress to allow the tax cuts passed during the George W. Bush administration to expire. Some want higher taxes generally.
They planned to push lawmakers to reject any deal that the so-called super committee delivers that doesn't raise taxes on millionaires. The 12-lawmaker panel has until next Wednesday to agree on $1.2 trillion in savings over the next 10 years or risk automatic spending cuts.
Only one American in every 100 can be considered a millionaire, the status enjoyed by half the members of Congress. At the other end of the spectrum, one in seven Americans is officially poor. Last week's revised estimate from the Census Bureau put the number in poverty at 49.1 million.
The government's revised poverty line for a family of two adults and two children is annual income of $24,343 or less. Members of Congress make seven times that. Certainly, a high income does not preclude a senator or representative from being sympathetic to the hardships of the working poor and middle class. But the gap is wider than ever; if the nation is polarized politically, it is super-polarized economically.
The Congressional Budget Office confirmed recently that income disparity has grown to historic levels; incomes of the top 1 percent nearly tripled between 1979 and 2007, while incomes of the American middle class grew by about 40 percent. I'll add another statistic, from "The Price of Civilization," Mr. Sachs' latest book: At the start of the 1970s, the average pay of the nation's top 100 corporate executive officers was about 40 times that of the average worker. Three decades later, it had reached 1,000 times, and it continues to grow. In 2010, CEO pay went up, on average, 23 percent, while wages for everyone else rose only a half-percent, according to a study prepared for The New York Times.
We got here, Mr. Sachs says, on the force of Ronald Reagan's anti-government message and the Republican faith in supply-side economics, as well as the Clinton-era embrace of financial deregulation. Republicans have sold out to Big Oil, he says, and Democrats, including those in the Obama administration, have sold out to Wall Street.
Greed and shortsightedness rule: Politicians can't see past the next election, CEOs past the next quarter.
Originally posted by v1rtu0s0
Sure this group doesn't speak for everyone, but they are part of a growing group of individuals that includes billionaire warren buffet who believe their taxes should be increased.
n the wake of the $700 billion TARP bailout, Warren Buffett apparently shaped a plan to clean up toxic assets that Treasury Secretary Tim Geithner later adopted–resulting in massive profits for Buffett.
According to Schweizer, after the bailout bill’s passage, Warren Buffett sat down and wrote then-Treasury Secretary Henry Paulson a four-page private letter laying out a plan to clean up the toxic assets plaguing numerous financial institutions. Buffett proposed something he called a “public-private partnership fund.” For every $10 billion the private sector invested, Buffett said the government should put up $40 billion.
After Paulson’s exit, incoming Treasury Secretary Tim Geithner tweaked the plan and rolled it out in March 2009. But according to quarterly reports from Buffett’s holdings company, Berkshire Hathaway, between the time the billionaire crafted his plan and Geithner adopted it, Buffett quietly purchased 12.4 million shares of Wells Fargo stock and 1.5 million shares of U.S. Bancorp. Once the government unveiled its “Public-Private Investment Program,” bank stocks jumped, resulting in large profits for Buffett.
How much Buffett profited is hard to calculate, since there’s no way to know what his purchase price was. But prior to the government adopting Buffett’s plan, Wells Fargo had been trading at roughly $20 a share. In the weeks after Geithner’s announcement, the stock jumped to $30 a share. Likewise, U.S. Bancorp went from $8 in February 2009 to more than $20 a share by May.
Behind closed doors, however, Buffett had become a shrewd political entrepreneur. With his Goldman bet in place, the billionaire exerted his considerable political influence in a private conference call with then-Speaker of the House Nancy Pelosi and House Democrats. During the meeting, Buffett strongly urged Democratic members to pass the $700 billion TARP bill to avert what he warned would otherwise be “the biggest financial meltdown in American history.”
Buffett had a strong financial interest in the bailout’s passage, says Schweizer. “If the bailout went through, it would be a windfall for Goldman. If it failed, it would be disastrous for Berkshire Hathaway.”
When the TARP bailout passed, Berkshire Hathaway firms received a staggering $95 billion in bailout cash from U.S. taxpayers. In total, TARP-assisted companies made up almost a third (30%) of Buffett’s entire publicly disclosed stock portfolio. The payoff: by July 2009, Buffett’s Goldman bet and his congressional jawboning had yielded profits as high as $3.7 billion.
Incredibly, in a breathtaking public relations move, Buffett publicly complained that the government bailouts had put his company at a disadvantage, because funders “who are using imaginative methods (or lobbying skills) to come under the government’s umbrella–have money costs that are minimal.” Rolfe Winkler of Reuters best captured Buffet’s audacity: “It takes chutzpah to lobby for bailouts, make trades seeking to profit from them, and then complain that those doing so put you at a disadvantage.”
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