Is the president's plan basic fairness or class warfare?

As with too many other media debates, an absurd proposition--that returning tax rates for certain wealthy people to levels seen in the 1980s and 1990s is a declaration of war--is treated as one of the two possible answers to a question. Gregory manages to make things worse by getting the only answer on the show from billionaire New York mayor (and media tycoon) Michael Bloomberg:

GREGORY: Does that trouble you?

BLOOMBERG: It does trouble me. You can't define what's middle class, what is wealthy, what is poor. Every time you have a jump, people play games to get on one side or another. And I think it's not fair to say that wealthy people don't pay their fair share. They pay a much higher percentage of their income. They have a higher rate than people who make less. The Buffett thing is just theatrics. If Warren Buffett made his money from ordinary income rather than capital gains, his tax rate would be a lot higher than his secretary's. And, in fact, a very small percentage of people in this country pay a big chunk on their taxes.

Bloomberg's response is incoherent. Of course definitions of what makes someone  "wealthy" or "poor" differ, but there's no reason people can't make such distinctions.

And Buffett's tax burden has nothing to do with "theatrics." Bloomberg says, "If Warren Buffett made his money from ordinary income rather than capital gains, his tax rate would be a lot higher."

Well, yeah. THAT'S THE WHOLE POINT of Buffett's argument.

If Meet the Press is going to actually engage this discussion, it might make sense to invite some guests who know something about the issue--perhaps even a non-billionaire.

In explaining why it was OK to sock a new 5.4 percent tax on the highest earners in this country--to pay for healthcare reform--President Obama’s press secretary, Robert Gibbs, said this:

"The president believes that the richest 1 percent of this country has had a pretty good run of it for many, many, many years."

Ah. So that’s it. The old "You’ve had it good enough for long enough" policy. That’s why a family earning a million dollars a year should now cough up $54,000 of that--in addition to all the other taxes it pays--to cover healthcare for people who may not pay a penny of new tax themselves.

But a family making $1 million a year wouldn't pay an extra $54,000 in taxes from the proposed 5.4 percent surcharge--because that surcharge would only apply to income beyond the first million dollars of income. A smaller surcharge would kick in at $350,000, and increase at $500,000--but the total tax increase for a couple making $1 million would be $9,000, or one-sixth of what Albom claimed was a "grossly overweighted tax."

This is how taxes generally work, with marginal tax rates that apply to income over a certain level. You'd think that Albom, who has an MBA from Columbia University, would be familiar with the concept. But media outlets have been known to trip up on this subject, even when their stories are prepared in conjunction with tax experts (FAIR Action Alert, 9/22/08).

Albom's charge that the Obama administration is "engag[ing] in the worst and most destructive form of politics: class warfare" is also a familiar corporate media trope (Extra!, 1-2/01). Given that for the media, "class warfare" is almost always waged by the bottom against the top, it's perhaps not surprising that Albom has trouble figuring out what Gibbs means when he says that " the richest 1 percent of this country has had a pretty good run of it for many, many, many years." (Albom speculates that he's "suggest[ing] that the top 1 percent are a bunch of Bernie Madoffs, that they’ve been scheming their way to riches, evading the system, hiding their money in complicated offshore deals.")

Gibbs is presumably referring to data compiled by the Congressional Budget Office (CBPP, 4/17/09) showing that income for the top 1 percent has climbed by 256 percent from 1979 to 2006, while the take-home for middle-income households has grown by only 21 percent; for poor households, growth was just 11 percent. The share of all after-tax income that's gone to the top 1 percent has more than doubled since 1979, from 7.5 percent to 16.3 percent.  You might say they've had "a pretty good run."