Billionaire Warren Buffett contributed to the latest dialogue when he made the rare assertion that he should pay more taxes. President Obama, a vigorous foe of the Bush tax cuts, is seeking to promote a Warren Buffett Rule in which secretaries don't pay higher rates than billionaires and millionaires.
Unless you live in a cave (a cave without CNN or Fox News or MSNBC) you have no doubt heard the arguments on both sides, and perhaps even engaged in them.
Between the outrage of Occupy Wall Street and the rage of the Tea Party it doesn't take a weatherman to see that the wind is blowing our Ship of State into some rocky shores. But between the extremes of the tax debate, when America experienced unequaled growth & prosperity in the 1950s and '60s, people often forget that back during the 8-year term when Republican Dwight Eisenhower was President, the top tax rate averaged roughly 90%, hitting mainly individuals making $200,000 a year or couples making $400,000 per year - which in today's terms, would be the equivalent of millionaire status.
On the other side of the fence, people respond to the Buffett argument by saying that nearly half of American workers pay no federal income tax at all; mostly people who make less than $30,000 and/or get the Earned Income Tax Credit. Their position is that everyone should pay at least something, especially if they make use of government services, even if it's only $100.00 or so.
Anti-tax advocates are also asserting that if Buffett wants to give more money to the government, he should feel free to do so, and that nearly half of all American workers pay no federal income taxes because of credits received on their low or low-middle incomes.
As the back-and-forth continues, we at Review felt it would be instructive to survey a sampling of prominent people in local business. But perhaps most surprising of all - or perhaps not so surprising - a whole lot of prominent people involved in the local commerce of selling things turned our invitation down to partake in this roundtable discussion.
They were fearful, possibly with justification, that by expressing their views they might turn away potential customers. This demonstrates the fever pitch demonstrated nowadays with the taxation issue and with politics in general. Welcome to the Brave New World of America in the year 2012 - a time when our most valued freedom of expression is eviscerated by the knife of self-censorship out of fear of economic repercussion.
Hence, this brief roundtable has been two months in the making; and The Review is thankful to the following three individuals (we were hoping to get six) that consented to speak their mind and in the process prove that public discourse is not something to be relegated to the antiquated pages of American history.
Herb Spence has been successful in business contracting, Jimmy Greene in small business advocacy, and James Piazza in the profession of law. In no way do we mean to imply that any of these individuals are in Buffet's league when it comes to rolling in the dough balls, much less within the top 1 percent of income earners.
But they have done well for themselves, and the following is a taste of what they think.
Herbert A. Spence III
President/CEO (fourth generation) Spence Brothers construction
Political Leaning: Republican/Independent
Jimmy Greene
Regional President/CEO
Associated Builders and Contractors
Political Leaning: Republican
James F. Piazza
Criminal Defense Attorney
Former Saginaw County Assistant Prosecutor
Political Leaning: Democratic
Review: What is your reaction to Warren Buffett saying that people with wealth should pay more in federal taxes?
Spence: I do not believe anyone should pay more in taxes. I truly believe the country cannot tax our way out of our economic problems. The more taxes small business owners pay, who are often those in the upper income brackets, the harder it will be to hire more people. Government should be making it easier for business to succeed if they want to help create jobs, which is the only feasible way out of economic downturns.
Greene: I have a different perspective than most of my Republican peers. I'd like to see the Bush tax cuts eliminated. They were positive at the time (in 2001 and 2002) because there was a surplus, but unfortunately we engaged in a war that chewed up that surplus. To continue the tax cuts while we were at war and entering budget deficits was not very patriotic. When President Reagan encountered deficits, he had no problem acknowledging that he had overreached, but many Republicans nowadays have trouble doing the right thing.
Piazza: The upper echelon has enjoyed the lowest taxes and rates since 1976. Personally, I don't think it's a fair distribution of the tax code. The upper class should pay a fair share and they're not doing it. The Republicans keep saying we have to give tax breaks to wealthy people because they create jobs. That is a myth. The rich are not rich because they create jobs. They are rich because they keep their money.
Spence: Nobody wants to pay more taxes than they have to, but they are a necessary evil. If we're going to have some level of government services then we're going to have to pay some taxes. I believe the vast majority of people understand this and they accept the current structure. I believe that I - as with the vast majority - are probably somewhere between those two extremes: the Tea Party on one side and Occupy Wall Street on the other.
Review: When you say "current structure," are you saying to keep and maintain the Bush tax cuts as part of the current structure?
Spence: The Bush tax cuts are only part of a bigger picture. Through the years, depending who has been in power, there have also been various increases or decreases in many rates, and also all sorts of phase-outs of exemptions and deductions and the alternative minimum tax, all of which make the effective tax rates of upper income people even higher.
Review: Why do you believe that we now are seeing such strong feelings, pro and con, on this issue, with people accusing one another of class warfare and socialism and vulture capitalism and so forth?
Greene: We used to be a country in which people on either side of the aisle could work together. People thought of themselves more as Americans than as Republicans and Democrats. I commend people such as Ronald Reagan and Ted Kennedy. They may have disagreed, but there was no question about their love for their country.
When Clinton came in with his ideology, Republicans held him in check, but compromises still were made. Then we started to compartmentalize in our politics. No doubt the web and cable news had something to do with it. I don't watch Fox News; why would I want to drum into my head what I already believe? It's similar to why would a liberal only read The Huffington Post? People who do this aren't well rounded or open-minded. Nobody talks about issues anymore.
Review: So basically the most noisy people on both sides - the people who shout and protest - are getting the attention in comparison to people who share your attitude and do not express major grievances?
Spence: Some people obviously feel very strongly, and then there are people who are paid to organize and to demonstrate. I'm talking about people on both sides. They have their agendas and then the media feeds on it.
Review: How do you respond when people say the tax issue is all about class warfare and envy?
Greene: I don't think there's class warfare so much as there's political party warfare. Don't get me wrong. Are there elements of class warfare? Yes. But this is born out of party politics. Is every Democrat poor or is every Republican rich? Everyone knows this is not the case.
Piazza: I don't think they are envious of rich people. They just want everyone to pay their fair share.
Review: Do you have any suggestions to end all of this divisiveness in our society and in our politics? Do you see any potential for compromise?
Spence: I believe too much attention is focused on things like national tax rates that local individuals probably cannot do much about. Fortunately, in our Great Lakes Bay Region we have many people working together across county lines, and lawmakers working across party lines, to really make a difference here. Many new jobs have been created and I truly believe our region can lead the state and the country to a better future if we continue to work together.
Piazza: At the rate we're going and with the political climate as it is I don't see any agreement being reached, unless voters are willing to go with one political party in control of both the Presidency and Congress. We might look at going to a Parliamentary style in this country. For example, if the Democrats keep the presidency and regain a majority of the legislature, then they can enact changes. The system we have now is set up for gridlock.
REVIEW: What steps would you suggest?
Piazza: Social Security could be made solvent. Why stop taking it out of taxes at a $95,000 cap? Why not make it $300,000? And in terms of creating jobs, people don't like the word 'infrastructure,' but work on our streets, roads and bridges is being delayed. There is enough work needed to cover the next 50 years. People forget how our interstate highways were built during the 1950s with federal taxes. We need to realize that in these areas, the government has to be in our lives.
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Mar 15, 2012
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