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Tuesday, November 20, 2012

Taxes, Republicans and and obedience to Norquist

Posted By on Tue, Nov 20, 2012 at 6:39 AM

Is it dawning on some Republicans that budget solutions must include some new tax money, preferably from those best able to pay?

Maybe. Looks like some Republicans are starting to chafe at the pledge they made to Grover Norquist never ever to vote for a tax increase.

By Mr. Norquist’s count, 219 House members — enough for a majority — and 39 senators have committed to the pledge. But some of those members who signed on, many of them years ago, have started to back away, apparently leaving him several votes shy of the majority he would need to block any tax increase.

No indication that any Arkansas Republican has gone wobbly. Poor though we are, Arkansans understand that if the poor bear a disproportionate burden long enough - and the wealthy are sufficiently comforted - we'll all eventually be trickled upon.

ALSO: If your sympathies lie with the 2 percenters that President Obama has targeted for a tax increase, the New York Times has a sympathetic accounting of the plight of families making more than $300,000 a year should taxes rise. A key issue is whether rates will change on unearned income - capital gains and dividends. The article contains a useful scrap of information worth filing away for when the Republicans, now in the Arkansas legislative majority, make their run to again comfort the rich with a capital gains tax cut, already taxed at two-thirds the rate of earned income. If anything, these numbers are more pronounced in Arkansas:

An analysis by the Tax Policy Center found that in 2011, people in the top 0.1 percent of earners saved an average of $356,000 in federal income taxes because of the preferential rate for capital gains. Middle-income Americans were spared an average of just $23 because of the lower taxes on capital gains, the study found.

“Capital gains are extremely concentrated by income,” said Len Burman, a former Treasury official who has written extensively about taxes on investment income. “There’s no source of income more focused on the very, very wealthiest. A lot of people own stocks indirectly through their 401(k)’s. But most Americans can’t afford to own any shares directly.”

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