Sickening. That was my initial, and is still my ongoing, reaction to a front-page Observer story last week. I was sickened when I read it, and I'm still sickened, thinking about it days later. You can probably guess the story I'm referring to: the group of wealthy Charlotteans who, with the notable exception of former Bank of America CEO Hugh McColl, expressed their high and mighty rejection of paying higher taxes to help reduce federal deficits — why, the very idea, hmmph.
The local moneybags were reacting to a column published a couple of days earlier in The New York Times by billionaire Warren Buffett, in which the world's most famous investor called for higher taxes on America's super-rich, calling them (including himself) "coddled." Approximately one minute later, the super-rich and the regular rich, as well as their fan clubs in the conservative media, started howling "socialism." The Observer apparently thought Charlotte's uppa crus' should be given an opportunity to weigh in on the topic, and boy, did they ever. Such combinations of whining and arrogance haven't been seen in print since Donald Trump got on his "Obama's birth certificate" kick.
Ever the charmer, Speedway Motorsports honcho Bruton Smith said of Buffett's proposal, "He should sit down and shut his mouth." He also proposed that since so much money is "tied up with corporations," the way to produce more incentive for new investments and job creation would be to, you guessed it, lower corporate taxes.
Felix Sabates, car dealer and longtime successful businessman and wheeler-dealer, said, "For him [Buffett] to say what he said I think is full of crap ... So you're going to squeeze the rich guy and create more unemployment?"
Now, a few observations and comments. First, boo-hoo-hoo for the poor little rich boys who are so put upon by the Help, i.e., the rest of us.
Second, Buffett was referring to the super-wealthy, top one-half percent of income earners, none of whom live in Charlotte, so the Observer's story was a bit bogus to begin with, but that's nothing new.
Third, Smith's and Sabates' assumption that lower taxes for the rich equals more jobs for the rest of us is simply wrong. It sounds logical, but recent history shows that it doesn't work, despite Republicans' recent craze for calling all wealthy people "job creators." Honestly, you wonder where they get the nerve to use that phrase. Think of the Bush tax cuts. Everyone got a cut, but the great bulk of the cuts went to the top 1 percent of American income earners. Soooo, the question begs to be asked: Where are the jobs? We all know where they are: sent overseas or eliminated. And the extra money the super-rich got from the tax cut? They sat on it and sat on it, and sit on it still. In fact, companies today are holding all-time record levels of cash, while unemployment is through the roof. To put this as simply as possible for Messrs. Smith and Sabates and all others who have drunk the corporate Kool-Aid, it's a nice theory, but no matter how many times you repeat the theory ... It. Doesn't. Work.
Lots of things can effect corporations' investments and job creation, but apparently the tax rate isn't one of them. Need more convincing? Think of the Clinton years, when the corporate tax rate was about a third higher than it is today; now think of the flood of investments American companies made during those years of economic rocking and rolling. Once again, tax rates had little to do with "job creation." For that matter, think of the 1950s when the U.S. economy boomed like no one had ever seen before — and corporate tax rates were at around 52 percent.
Fourth, most Americans don't realize just how badly they're getting screwed by the super-super-wealthy, that is, the top one-tenth of 1 percent. This mega-elite bunch hold tens of trillions of dollars in wealth, with the result being that the U.S. now has the most severe wealth inequality in our entire history. As David DeGraw, an investigative journalist who specializes in economic issues, sums up the situation, "Not even the robber barons of the Gilded Age were as greedy as the modern-day economic elite."
DeGraw and colleagues surveyed Americans' knowledge of the country's current wealth disparity. They asked people to estimate how much of the national wealth is owned by the richest 20 percent, and how they thought an ideal division of wealth would look. DeGraw found that Americans greatly underestimate the degree of wealth disparity in the U.S. They generally believe that the richest 20 percent own 59 percent of the national wealth; the actual figure is 84 percent.
Keep in mind that recent national opinion polls repeatedly show wide and deep levels of voter support for higher taxes on the country's wealthiest 1 percent. People feel in their gut that they're getting screwed. If they ever realize just how badly they're getting screwed, don't be surprised if British-style "street actions" jump across the Atlantic.