The Marie Antoinette Factor

Jared Bernstein on Mitt’s investment income and the “bitter politics of envy”:

Ordinary income, like paychecks, is taxed at a top rate of 35%, going to about 40% if the sun should ever set on the highend Bush cuts.  The average effective rate for federal taxes these days is around 20%, about five points higher than Mitt’s.  Basically, he’s paying what a middle class family—average income, around $65K, pays in federal taxes.

Is this a problem?  Well, the fact that our tax code favors assets over wages is one factor behind the rise in income inequality.  It’s also one reason we’re starved for revenues—this new report from the Joint Committee on Taxation shows that the favorable treatment of cap gains and dividends will cost the Treasury about $450 billion between 2011 and 2015 (that’s the whole American Jobs Act, right there!).  Then there’s basic fairness…(whoops, straying from the numbers!)

And for what?  The evidence doesn’t support the view that favoring asset-based income raises investment, productivity, or job growth.

Frankly, I doubt many people are envious about the above.  I suspect few begrudge the wealth.  What I think bothers people is the tax breaks on the wealth.  And that’s more anger and disgust than envy. Just to be clear.

And then there’s the Marie Antoinette factor, which also infuriates people (emphasis is in the original):

“I got a little bit of income from my book, but I gave that all away,” Mr. Romney told reporters after an event here. “And then I get speakers’ fees from time to time, but not very much.” Financial disclosure forms that candidates are required to file annually shows that Mr. Romney earned $374,327.62 in speakers’ fees from February of 2010 to February of 2011, at an average of $41,592 per speech.

Oh Mitt, you really are the gift that keeps on giving. A smarter candidate would say, “I’ve been very fortunate to make significant amounts of money from giving speeches.” But Mitt describes $374,327 in speaking fees in one year as “not very much.” If you put that amount into the Wall Street Journal‘s handy calculator, it turns out that if those speaking fees were the only income Mitt had, he’d still be richer than 98 percent of Americans. But those speaking fees, apparently, are “not very much” to him.

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