In Latest Bout Of Class Warfare, Multi-Millionaire Harry Reid Seeks To Replace Buffett Tax Proposal With 5% Millionaire Surtax

Tyler Durden's picture

Confirming that one has to be a billionaire or at least a multi-millionaire to be an applicant for the Tax Czar position under the Teleprompted Wealth Readjuster, is the latest sheer class warfare idiocy out of tax expert du jour Harry Reid, who has proposed an overhaul of the Obama tax bill with one in which millionaires end up paying a 5% surtax. National Journal reports: "Senate Democrats will replace tax increases proposed by President Obama to pay for his $445 billion jobs bill with a more politically popular tax increase on millionaires, Senate Majority Leader Harry Reid, D-Nev., said on Wednesday. “When Democrats bring this common-sense jobs legislation to the floor, we’ll ask Americans who make more than a million dollars a year to contribute a little more,” Reid said in a morning floor speech. He said he hopes to set up a vote on the revamped jobs bill "within the next few days." That means he will seek action after the Senate passes a China currency bill and before Senate action on three free trade bills. Reid and Democratic aides have said they planned to alter the pay-fors proposed by Obama to win support of Democrats wary of the tax increases. Reid and other Democrats noted that raising taxes on millionaires polls well, even among GOP voters." Why yes, Harry, please go ahead and create some more class hatred. You should even bring your agenda down to Wall Street and threaten to occupy Wall Street if your demands are not met. But before you do, please make sure you create a poster which highlights not only how much money you have raised from corporate interests during your career, but specifically how much has come from the "Securities and Interest" industry. We are sure you will fit right in with your sincere populist demands.

Wait, class warfare? How dare we. Ok, we don't have a Ph.D., and don't want to come off as racist.... so we will just leave the allegations to these hard core Obama fans:

Robert Johnson (left), business magnate and founder of Black Entertainment Television (BET), has joined the mounting list of CEOs and business leaders who are questioning President Obama’s incessant demagoguing of America’s wealthy. On "Fox News Sunday," Johnson suggested that the President "recalibrate his message," so as not to "demean" or "attack" the achievements of so many hardworking Americans. "I’ve earned my right to fly private if I choose to do so," he declared, "and by attacking me, [Obama] is not going to convince me that I should take a bigger hit because I happen to be wealthy."


Although Johnson did not directly address President Obama’s "Buffett Rule" (a proposal that would allow millionaires to pay a lesser share of their income in taxes than middle-income earners pay, such as Warren Buffett's secretary), he grimaced at the notion of raising taxes on the wealthy, as he described how he joined the business world to "create jobs and opportunity [and] create value for myself and my investors." Raising taxes and alienating America’s job producers would only suppress such ambition, he implied.


Another wealthy businessman and previous Obama supporter, former AOL executive Ted Leonsis, attacked the President’s new tax proposal in a Sept. 25 blog, titled, "Class Warfare — Yuck!" "Economic success has somehow become the new boogie man," Leonsis writes, adding that "some in the Democratic Party are now casting about for enemies, and business leaders and anyone who has achieved success in terms of rank or fiscal success are being cast as a bad guy in a black hat."


During an interview last week with CBS News, the BET founder took a broader tone with the federal government, arguing that the political process is too polarized, and thus has taken a toll on the economy. "I’ve been in business for over 30 years [and] I’ve never seen a time when there’s been more zero-sum game mentality in the United States among political parties," he told CBS’s Scott Pelley during the interview.


Johnson expounded the idea that from a business standpoint, if one saw two parties arguing so relentlessly, one would not want to conduct business with either of them, but would find other parties with which to work. "And you know what you find, the Chinese who want to do business. You find the Vietnamese who want to do business. You find the Brazilians. You find the Indians want to do business with you."

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Nascent_Variable's picture

Real, effective tax reform would not paint in such broad strokes.  The way to generate revenue, level the playing field, and stimulate the economy at the same time is to punish the cheaters, while encouraging investment.  Cut top rates and reduce or eliminate most, if not all, deductions and credits at the same time.  Make a move toward a progressive flat tax.

The lower rates decrease capital flight, while the closed loopholes keep companies like GE from paying an effective rate of <10% with billions in revenue.  As an added bonus, the government's ability to conduct social engineering through the tax code is greatly reduced.

Gold Man-Sacks's picture

"Make a move toward a progressive flat tax... ?"  Do you realize the absurdity in what you just said?

Nascent_Variable's picture

Flat in the sense of unmoving, i.e. top rate and effective rate are virtually the same.  Progressive in the sense that the tax rates adjust up with income.  I have a hard time getting on board with a tax that isn't progressive.

The key to a plan like that is that you can greatly reduce the tax burden of everyone by eliminating the system that punishes those who cheat the best.  People who work for a living aren't the ones who pay a small fraction of their top rates.

Bicycle Repairman's picture

If tinkering with the tax code is about feeding Leviathin or social engineering, forget about it.

bid the soldiers shoot's picture

Forget about it, If tinkering with the tax code is about "feeding the Leviathin." Especially at Maison Blanche, Tour d'Argent and the other tony restaurants.

I accidentally junked you. You'll get make-goods.

traderjoe's picture

Why tax at all? Bring back the United States Note and eliminate all national debt. Then you have no need to tax...

eureka's picture

Why bother at all?  Let the unholy US Federation & Empire disintegrate.

Let each state and or region form its own little country.

US'ians hate each other. 


mayhem_korner's picture

 I have a hard time getting on board with a tax that isn't progressive.

Are you advocating getting rid of lotteries, toll booths, sales taxes, and FICA?  Curious minds want to know...

Grinder74's picture

15% of $50,000 income = 7,500 in taxes

15% of $1,000,000 income = 150,000 in taxes

150,000 is greater than 7,500 (2000% greater in fact)

How is that not already paying their "fair share"?

Nascent_Variable's picture

I'll admit you make a good point, but the problem is less on the 50K - 1,000K spectrum than it is on the 10-15K.  If somebody is not making enough to cover basic expenses even after slashing them to the minimum, imposing a flat tax on them creates an incredible hardship, more so than anyone in the higher income ranges.

People making that little (assuming no government entitlements) aren't the ones reaping the rewards of the system.

Old Poor Richard's picture

15% of $50,000 income = 7,500 in taxes

15% of $1,000,000 income = 150,000 in taxes

150,000 is greater than 7,500 (2000% greater in fact)

How is that not already paying their "fair share"?


Almost there.  Create modest personal exemptions for earners and non-working dependents to cover basic living expenses, and it's a fair and progressive flat tax.

( $50,000 - $8,500 - 4 * $3,700 ) = $26,700 * 15% = $4,005 in taxes

( $1,000,000 - $8,500 - 4 * $3,700 ) = $976,700 * 15% = $146,505 in taxes

Now fair.


Banjo's picture

The richest people earning 1million pa use many schemes, trusts, investment loans etc... to ensure they earn whaterver income they want to declare. I have generally found rich people to be pretty intelligent people and if they don't know how to work the books themselves they hire someone who can make it happen.


I read recently the big corporations want a tax holiday on overseas profits. All for the good of the average person of course just like the bailouts :)


I would like to see someone model an economy that uses the flat tax you describe and a capital tax with corresonding national dividend. These rates should flucutuate depending on the level of participation less participation lower taxes and therefore lower national dividend.


Irving Fischer also proposed abolishing fractional reserve banking after the great depression, I also think this would be an idea worthy of developing.

tmosley's picture

What happens when you through slow but persistant inflation into the mix, pushing ever more people into those higher percentage tax brackets?

blunderdog's picture

How about we worry about that if wages ever start to increase again, eh? 

Gold Man-Sacks's picture

Why stop with progressive income taxes, then?  I mean, how about progressive prices at Pizza Hut?  The more money you make, the more you pay for that medium pizza.  The unemployed guy with five kids not only pays nothing, but actually gets a credit when he gets the extra-large. 

macholatte's picture


There has been little the Progressives have done that I have seen as good for America. However, I support a tax  surcharge and would scold the wealthy whinners who are indignant because Barry didn't say "Please".  Fuck 'em! 

Also, I propose a new Minimum Tax of $1,000 ($1,500 for married couples filing jointly) on EVERYONE. Including the parasites. That would raise another $50B-$70B per year.


A corporation's primary goal is to make money. Government's primary role is to take a big chunk of that money and give it to others.
Larry Ellison

The politicians say "we" can't afford a tax cut. Maybe we can't afford the politicians.
Steve Forbes

When you consider that a steelworker who’s making $40,000 a year has virtually the same tax burden as someone who’s making $400,000 a year, you see that there are inequities. This administration has used the tax code to accelerate wealth to the top. Most of the tax breaks have gone to people in the top bracket.
Dennis Kucinich

 Everyone wants a more simple tax system. But if this means that certain tax breaks have to be cut, people are no longer so enthusiastic.
Angela Merkel

The tax which each individual is bound to pay ought to be certain, and not arbitrary. The time of payment, the manner of payment, the quantity to be paid, ought all to be clear and plain to the contributor, and to every other person...

The Wealth Of Nations, Book V Chapter II Pt II, p. 825, para. 4.

Rick64's picture

I have a another suggestion. We get rid of all the rich politicians who are colluding with their paymasters (corporations and banks) while the taxpayers pay their salaries, expenditures, pensions, and health insurance. Are these rich politicians are more in touch with big business or the common citizen?

Grinder74's picture

Let's start with a surcharge on Unions who receive hundreds of millions every year tax-free.

Banjo's picture

One thing Adam Smith failed to see back in the days of gold and silver being base money. Is the distortion available to a government when they can print unlimited amounts of reserve currency.

This means that difficult decisions do not have to be taken with regards how to pay for current spending as you can create as much money as you like. How this gets paid back in the future well no one is really sure except for the idea of default (deflation) default (inflation)

blunderdog's picture

"I propose a new Minimum Tax of $1,000 ($1,500 for married couples filing jointly) on EVERYONE."

Why in the hell would you want government subsidizing MARRIAGE, for fuck's sake?

Old Poor Richard's picture

Not absurd at all.

The fix for that is a flat tax with exemptions for the earner and for non-working dependents, and no others.  It is a flat tax with one rate, but that personal exemption is fixed and so provides less proportional relief for higher incomes.  

Progressive flat tax.  File on a post card.  No shelters.  All income treated equally whether interest, dividends, wages, capital gains, gambling winnings, inheritances, life insurnace payouts--if it's NEW TO YOU, it's INCOME, and thus it's taxed at the same flat rate. 


MillionDollarBonus_'s picture

These disputes could all be solved by doing away with free market wages, and introducing a minimum wage that provides Americans with a luxurious standard of living comparable to the highest members of society. For example, if we set the minimum wage at 1,000,000 dollars per year, we would have far better income equality and upward mobility. I suggest people refer to Alan Krueger's paper which PROVES the benefits of wage-controls beyond any reasonable doubt ( Alan Krueger is rated as one of the 50 BEST ECONOMISTS in the world by REPEC (, and will go down in history as one of the great pioneers of centralised price controls.

Rothbardian in Cleveland's picture

Why 1,000,000?  I mean, a house and a Bently and what not, takes a bit out of that right quick.  Why not 5,000,000 or 10,000,000.  That would be so kick ass!!!



MillionDollarBonus_'s picture

I appreciate the suggestion but 10000000 dollars a year is slightly too high and could discourage or prevent employers from hiring more workers. I hate to say it but this kind of comment demonstrates a serious lack of economic education, which is one of the reasons we are in this predicament in the first place.

Pure Evil's picture

As a famous cartoon wabbit was fond of saying:

What a maroon!   ~Bugs Bunny

I think it's your's and Washington's lack of serious economic common sense that is the reason we are in this predicament.

Exactly how are small buisnesses that don't even generate income in the millions but might have one or two employees supposed to come up with the money to pay each employee one million a year. Are they supposed to go out and borrow the money. What happens if  after everyone at the small company gets there million dollar salaries and the company still generates income that is less than a million a year?

Is the government going to give everyone one million a year, if so then what is the incentive to work?

Your new idea is stupider than your last one. Doesn't the AolHuffPost have a section you can spread this illiterate tripe on.

tmosley's picture

I think you need to present this proposal to the president.

ElvisDog's picture

I must admit I do enjoy the absurdity of MDB's posts.

Pure Evil's picture

Wow, pure genius.

I fail to comprehend why ZH has yet to offer this illuminute his own space to post his brilliant thoughts.

Let's see, exactly where have wage and price controls been applied in the past?

Hmmm, Cuba maybe?, the Soviet Union?, how's North Korea lookin'?, can anyone remember Communist China?, Communist Vietnam? Care to look south of the border into central and south America?

Ah yes, didn't we dally with price and wage controls during the Nixon/Ford/Carter administrations?

I'm all for everyone making one million a year, just see if you can maintain supply while keeping prices down, or is that working for Chavez in Venezuela.

One suggestion, don't quit your day job.

But with your line of reasoning I'm sure you'll be quite the attraction on Worlds Dumbest Economists, they'll devote a whole hour long show just to you.

Banjo's picture

The reason I like your post so much it clearly demonstrates a fundamental issue is how do we equitably distribute a portion of wealth, that is then able to re-circulate within the economy, to form a robust middle class with adequate incentive to produce.

One suggestion is we do it as a percentage of turnover, higher turnover and or productivity = higher wages. This means in a bubble inflation or growing economy wages are rising in a deflation or contractionary economy wages are falling AND criticaly related to the turnover of the business you are associated with. (I know this is a dream because accountants would hired to show no turnover or significantly reduced turnover in the business)

This almost shares the Marxist concept of "who owns the means of production" you see someone who actually owns productive plant and property unencumbered and not intermediatd by tranches of claims on said real productive capacity (as in common stock where there are numerous other creditors that have claim to company assets ahead of stock holders) is not worried about deflation or inflation because if you need to buy cars, airfares, energy, toothpaste, bread and other items, the owner of productive capital will always be able to make money at a price point that makes relative sense.

What we have now is something that has individuals contribute their labour and depending on what role you land in the economy you may not obtaine a fair share (however we define it) based on your input. We only need to look at someone who say cleans your hotel room or picks up your trash and juxtapose this against a banker selling loans.

I am not arguing that a banker should earn less money I am suggesting that perhaps under our current system structurally that the cleaner for example is possibly not receiving an equitable distribution of wealth compared to our banker who I suggest may be earning excess compared to their input.

Pure Evil's picture

This is ignorance at its best.

If a janitor is unhappy with his annual income, and envious of a bankers annual income, then he should stop being a janitor and become a banker, or an athlete, or a hollywood movie star, or whatever it takes to make the amount of money he feels he is entitled to earn.

At least the mob doesn't sit around griping about how so and so makes this much while so and so makes that much per year, they go out and steal as much as possible instead of sitting around pontificating about how everyone is entitled to one million a year in annual income.

So, stop whining about how much someone else makes and go out and start making your own millions or billions.

Ahh, you don't know how to go about making a million or a billion dollars in annual income a year? Too bad, I guess that's why you sit around expecting someone else to give it to you for nothing.

It seems we have a lot of envious monetary warfare turds patrolling the webpages of ZH.

Either that or Obama has created a butload of webots designed to go out and extol the virtues of government mandated wage levels.

I guess the trolls are supposed to think that if everyone makes a million a year that a measly 5% tax would be insignificant.

It just don't work that way. They may give you a million a year annual income but they'll turn around and tax you at 90% of that income.

Then you'll be bitchin' that you don't make enough money and you need two million a year, then 5 million a year, or ten million year.

nedwardkelly's picture

Sounds OK to me.

My guess is you don't earn that much. What about when they tweak the law, lower this 'surtax' down to a level that does affect you, THEN will it still sound OK to you? What about when inflation takes you up to the level that it affects you... THEN will it still sound OK?

I dont care who they propose it on, any new income based tax is dead in the water for me. Consumption based tax I can live with.

Even then, unless they start talking about reducing spending, it's all just a discussion on how fast the titanic is taking on water.

kubrick007's picture

how about a 90% tax above $1 million on all income derived by working at a bank, equity firm, hedge fund, FIRE sector, trading, etc...that way if u r an entrepreneur that actually adds something to the economy u can still make $10 billion and pay only 20% or so.


that would be fair as it would target those individuals who screwed the system over. i would like to add that tax to anyone who stupidly bought a home that was 5 or more times their avg annual income but those people generally have no $ to give back.


i am fedup with the b.s. out there about the tax arguments. the middle class is not rallying against steve jobs or the restaurant franchise owners. no one has a problem with that (or at least very few do). i would venture that over 90% of the population is extremely pissed & rightly so, though, at those who make $1 million to $4 billion a year, simply stealing money from the govt via $2 trillion+ kickbacks so that they can buy 8 balls of cocaine, hang out drinking bottles at 1 oak (ok i don't go out any more so not sure what the spot is now), and paying for hookers....(perhaps also a tax on cocaine & hookers as that would also help recoup much of the kickbacks to the banks). 

Grinder74's picture

Don't forget to include all the idiot pension funds that gave billions to your list of culprits so the culprits could "[screw] the system over".

prophet's picture

Picking up on BAC idea of $5/month.

GeneMarchbanks's picture

Moonbats Gone Wild!

I saw Johnson on CNBC yesterday, unenlightened self-interest doesn't impress me and it should be clear to everyone that the "race" issue in America is going to be exploited ad infinitum.

Corn1945's picture

I'm convinced that our elected officials serve only to waste our time.

SheepDog-One's picture

Our govt is now nothing but professional cornholers.

GeneMarchbanks's picture

That's nonsense, they're not professional.

Grinder74's picture

I am Cornholio!  I need TP for my bung-hole!!   Yaaaaaaaaaaaaaaaaaaaah!!!

GeneMarchbanks's picture

If you get junked I'll be... surprised.

NotApplicable's picture


The idea that Corn owns any politicians is sheer lunacy.

AmericanFUPAcabra's picture

Douglas Adams - 
- One of the many major problems with governing people is that of whom you get to do it; or rather of who manages to get people to let them do it to them: It is a well known fact, that those people who most want to rule people are, ipso facto, those least suited to do it. Anyone who is capable of getting themselves into a position of power should on no account be allowed to do the job. Another problem with governing people is people.


Douglas Adams - 
- Anyone who is capable of getting themselves made President should on no account be allowed to do the job.


theres more, but eh

economessed's picture

If the Federal government needs money, have the Bernank print-up whatever they need.


"They pretend to lead the country, and we pretend to pay taxes."

kaiserhoff's picture

How about an unearned income tax on all of the government desk jockeys, and an end to free housing for the permanent parasite class?  We could balance the budget in 15 minutes.

i-dog's picture

How about we just get rid of the Federal Government? They are the enemy of the sovereign states of the Union ... and therefore the enemy of every sovereign American citizen.

It's not like there aren't already enough politicians and bureaucrats in each state to sort out the roads and water supplies, FFS!!

SilverIsKing's picture

Wonder if Warren B supports a tax upon wealth rather than income.  Big talk from guys who've already made their money.  That's the question that needs to be put to him.

As for Harry Reid, creepy dude.

DoChenRollingBearing's picture

You see that a lot (I do) from Old Money.  They LIKE the Income Tax, it help keep the Rich Man's Club nice and small.  Better seating at the nice restaurants in town and all.  I have not heard any Buffetts or Gates talking about a Wealth Tax...

Besides, they all have it in trusts or other wise protected from their self-serving tax proposals.


ghostfaceinvestah's picture

Agreed, a wealth tax would be better, it is too easy to hide passive income.

johnnymustardseed's picture

About time... if he is so rich then he is taxing himself. I am cool with that