Let us bend our yogatrained bodies into the Salute to the Sun pose. We are praising Charlie Rangel’s tax reform proposal. The New York Democrat wants to get rid of the alternative minimum tax, modestly cut taxes for most people and modestly raise them for the super-rich.
The Rangel bill does the right moves: It simplifies the tax code and makes it fairer. But no one expects it to go anywhere this year.
The plan already has Republicans hyperventilating about “the mother of all take hikes” – even though it’s actually revenue-neutral. That means it neither adds to nor subtracts from total tax collections. The bill would take back some of the Bush tax cuts for the tippytop earners, but not all. Even taxpayers making over $1 million a year would still pay less tax than they did before 2001.
But not paying their fair share of taxes has become the sport of kings for many leading moneybags. Some tycoons especially dislike the part that would raise taxes on a privateequity fund manager’s $500- million bonanza to a rate more in line with what the chauffeur pays on his take-home.
So they quietly launched a thousand lobbyists to kill the Rangel bill. Being old regulars in the boudoirs of the super rich, the Republicans instantly vowed to stop the grave “injustice.” But it appears that even some key Democrats are pounding on the door, so eager are they to please the fat wallets.
Wall Street lobbyists recently entertained Senate Majority Leader Harry Reid, who immediately went into Downward Dog pose, with surprising ease. The Democrat reassured them in a closed meeting that plans to subject equityfund managers to the same tax rates as everyone else would not see the light of day in the Senate this year. He reportedly told them that the Senate was too busy to raise their taxes.
Stay calm, progressives. Breathe in. Breathe out.
House Speaker Nancy Pelosi refuses to bless the Rangel bill, and instead expects fellow Democrats to “have our usual exciting, dynamic give-and-take on the subject.” The spokesman for presidential contender Hillary Clinton, meanwhile, says the Democratic senator “welcomes his (Rangel’s) leadership” and leaves it at that.
Democrats do know the gusto with which Republicans will take a tax hike for millionaires and fool the public into thinking it hurts chicken pluckers and bus drivers. They did it with some success after the 1993 tax reform, which raised taxes only on the top 1 percent, and not by much.
The conservative but virtuous Tax Foundation criticizes such efforts to deceive the yahoos. In its Tax Policy Blog, Gerald Prante writes, “Regardless of whether one supports Rangel’s bill or not, calling it a tax hike is somewhat dishonest.” Rather, he explains, it shifts taxes from one group to another. “Overall, the bill does not raise the average tax rate on the U.S. economy,” Prante adds. And if Republicans want to condemn the bill, they should “call it class warfare rather than attack its revenue neutrality.”
Class warfare?? Not even touch football. Billionaires would barely notice the sort of tax increase Rangel is talking about – and the bottom fifth of earners would see on average only a 1 percent increase in after-tax income.
It appears, alas, that doing the Sun Salutation before the Rangel bill will bring us more exercise than tax reform. But the splendid idea is out there for meditation.
In the meantime, do not expect the super rich to join us in the “asana.” The rich can apparently stop taxation of themselves from rising. In any case, they have private trainers. ©2007 The Providence Journal Co.