Upper-Class Warfare

By Frum, David | Newsweek, October 15, 2012 | Go to article overview
Save to active project

Upper-Class Warfare

Frum, David, Newsweek

Byline: David Frum

How Romney would screw the ordinary rich.

The Mitt Romney campaign has pledged that its tax plans--mainly cuts to the top income-tax rate combined with the elimination of loopholes and deductions--won't reduce the tax burden on "the rich." But who are the rich? Take a closer look and you see that even if the plan works exactly as advertised, Romney would transfer the tax burden from the plutocrats to the orthodontists.

You see, the top 1 percent has its own top 1 percent--the richest of the rich--and those lucky enough to count themselves within its ranks would be the big winners from a cut in the top rate of income tax to 28 percent--and they'd be even bigger winners from Romney's proposal to extend indefinitely the present 15 percent rate on capital gains and dividends.

Meanwhile the lower 99 percent of the top 1 percent--and the next 2 percent after them--will lose much more from the removal of the tax deductions than they will gain from lower rates.

Just ask Jeff Johnson, a successful businessman in a family-owned company in the D.C. area. He's no Occupy Wall Street type. He's as vexed by the many lower-income Americans who pay no income taxes at all as he is by the ultra-rich few who pay 15 percent rates or less. He agrees with President Obama: somebody has to pay for the roads and bridges that make America successful. But he wants to know why so much of the cost falls on him and people like him: not the fabulously wealthy but the ordinary rich. "Why am I slaving away at W-2 wages?" Johnson wonders. "The ultra-wealthy don't care about W-2 wages. They're working for stock appreciation, distributions, and so on."

"People who are multimillionaires or billionaires have enormous numbers of things at their disposal, within the law" to avoid tax, says Mike L., who works for a mid-size software company that bought the small company he started with some friends. But such techniques for tax avoidance are not practical for people like him.

It's no surprise that President Obama wants to raise the taxes of people like Mike L. and Jeff Johnson.

Here's what you may not know.

Romney adviser Martin Feldstein, one of America's most distinguished tax economists, recently crunched the numbers of the Romney tax plan in The Wall Street Journal.

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
Loading One moment ...
Project items
Cite this article

Cited article

Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited article

Upper-Class Warfare


Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

While we understand printed pages are helpful to our users, this limitation is necessary to help protect our publishers' copyrighted material and prevent its unlawful distribution. We are sorry for any inconvenience.
Full screen

matching results for page

Cited passage

Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.

Are you sure you want to delete this highlight?