"Let me just be very clear: I do not love you. I value you as a potential customer, and we have rigged the economic system in a way to destroy my customer base."Raz and Hanauer then discuss the various ways in which the rich avoid paying taxes. Most of the rich don't earn salaries (income tax, top tax rate of 35%), but get money from stocks and bonds (capital gains tax, top rate of 15%). There are also ways to "sell" investments at low rates to avoid paying any capital gains taxes on the sale.
A business man does two things: create sales and contain costs. A business only creates jobs when the sales require it -- when the middle class generates enough sales.
Because of the form the rich receive their income, raising the income tax rates won't make much difference. The way taxes are raised makes a difference and that means tax reform.
Hanauer says starting a big business in Africa doesn't make much sense -- there would be nobody to buy the product.
"The difference here is the American middle class, which is by every measure the most extraordinary economic achievement in the history of the world — and there is only one of those."
It is that American middle class that Hanauer calls "incredibly precious," not just for the American economy, but for the world's economy.
Terrence Heath looks at the latest GOP tax proposal and claims it stinks. The rich don't spend their money and don't create jobs with it. He then tackles the idea that the rich could simply donate money for deficit reduction.
The government should hold telethons to convince the 1% to contribute? Even the millionaires who want higher taxes find that idea laughable. Government, say the Patriotic Millionaires, is a shared responsibility. The "1 percent wouldn’t have its wealth without the benefit of the social contract that the rest of us support.
What’s needed from them is not a 'donation.' It’s payment due."
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