President Obama finally has his Piketty moment

[applegrove]

President Obama finally has his Piketty moment

by Matt O'Brien at the Washington Post

http://www.washingtonpost.com/blogs/wonkblog/wp/2015/01/17/president-obama-finally-has-his-piketty-moment/

"SNIP....................


Okay, that's a little bit of an exaggeration, but not a huge one. Obama's State of the Union, you see, will call for $320 billion of new taxes on rentiers, their heirs, and the big banks to pay for $175 billion of tax credits that will reward work. In other words, it's fighting a two-front war against a Piketty-style oligarchy where today's hedge funders become tomorrow's trust funders. First, it's trying to slow the seemingly endless accumulation of wealth among the top 1, and really the top 0.1, no actually the top 0.001, percent by raising capital gains taxes on them while they're living and raising them on their heirs when they're dead. And second, it's trying to help the middle help itself by subsidizing work, child care, and education.

Here's what it would do exactly.

1. End the step-up basis for capital gains. Unless you've inherited money, you might not realize that there's a pretty big loophole that lets heirs avoid a lot of capital gains from ever being taxed. It's called "step-up basis," and the Congressional Budget Office (CBO) estimates it will cost the government about 0.3 percent of GDP the next decade.

Here's how it works. Now, imagine you bought $1 million worth of stocks that are worth $10 million by the time you pass away. That's a $9 million capital gain you'd owe tax on, which, at the 23.2 percent rate, works out to a little more than $2 million check for Uncle Sam—unless you leave the stock to, say, your kids.

Then it's like your capital gain never happened, at least from the taxman's perspective. That's because the capital gain your heirs are taxed on isn't based on the original price, or basis, that you bought it at. It's based on the base that they receive it at. So, in this case, your kids would only owe taxes on any gains above $10 million. This, as you could guess, helps the people who have the most money to leave to their families the most. Indeed, you can see that in the chart below from the liberal Center for American Progress. The top 1 percent of households got 21 percent of the total benefits from stepped-up basis, the next 4 percent got 28 percent, and everybody else got the other half.



.....................SNIP"

[MannyGoldstein]

1. He should propose a jet pack for every American, too

Why not? That would have no less of a chance of passing.

These proposals should have been made in the first two years of his administration. Instead of saving banker bonuses and working to cut Social Security when he had majorities in Congress, Obama should have worked to prevent the population of homeless students from doubling and all of the other stuff that's been inflicted upon the 99% by his beloved Predator Class.

[Sopkoviak]

2. You have it all wrong

Obama had to wait until the Democrats lost the Senate and more seats in the House so he can really jam it to the rethugs.

Multi-dimensional chess doncha know.

[RufusTFirefly]

13. Yes! Multidimensional chess masters sometimes call this the "DiFi Gambit"

Named in honor of the senior Senator from the Golden State, who waits until the Endgame to speak out publicly in favor of certain progressive positions that she's been privately undermining for months and even years.

[JDPriestly]

22. So true. But I still back the proosals, paltry as they are.

[rhett o rick]

3. Damn you! You take the fun out of everything. Rhetoric is better than nothing. Jeez. nm

[MannyGoldstein]

4. Wouldn't it be cool if he proposed the jet pack?

And maybe ponies? Then the damned Left would STFU already.

[rhett o rick]

7. You still don't get it. The promise of a pony is better than nothin'. I am surprised

that he hasn't said that he is really mad at the war criminals. Or that he wants to close down Gitmo and supports single payer health insurance.

[Major Nikon]

12. You can't do this with a pony

[RufusTFirefly]

19. There'll be spandex jackets, one for everyone!

What a glorious time to be free!

[840high]

14. ....x10

[ND-Dem]

6. I find it odd he proposes this now too. why not when he first came to office and was riding a wave

of popular support, with people who would have laid down and died for him? I personally think a lot could have been done in those heady days.

instead we got weak tea like lily ledbetter; fine as far as it goes but it doesn't go very far at all.

[blkmusclmachine]

16. Obama didn't do it because he didn't want it done. No other excuse is believable.

[pnwmom]

20. It wouldn't have passed in the first two years. But proposed now it pulls the rug out from under

Mitt, Jeb, and the other wanna-be born-again populists, whether it passes or not.

[gratuitous]

8. I tend to agree with the cynical response

Yeah, great timing; right after you don't have a majority in any house of Congress, let's get all liberal now.

But, why don't we on the left take advantage of this? We complain plenty (and with good reason) about how liberal issues get no air time. Well, here it is: A chance to - at least - talk about wealth redistribution in the United States, this time away from the overrich and toward the rest of us. Can we take advantage of that, or is it more satisfying to carp?

[ND-Dem]

18. it's certainly what we hear here at DU. 'gotta move to the center cause nothing to the left

is popular'.

[sendero]

27. All Obama has ever been...

... is talk and now that talk is at it's cheapest why not go for broke.

What astounds me is that anyone cares what any of these politicians have to say. It is 100% bullshit, right down the line.

I personally have had enough of getting my hopes up for no reason whatsoever, I watch what they DO and barely listen to anything they SAY.

[ND-Dem]

17. with organization, maybe. without it, not so much. I doubt many of the mainstream

democratic organizations are going to be organizing people, either.

which means it would have to come from the grassroots.

[applegrove]

10. So their brains will be extra receptive when Hillary & other Democrats campaigns on

it in a few months. Nothing wrong with that!

[djean111]

28. Hillary is not going to SINCERELY campaign on that. Campaign blather. n/t

[blkmusclmachine]

15. Just what Obama was waiting for..a Republican controlled CONgress.

[JDPriestly]

21. Great. But not nearly enough.

The childcare credit should be much, much larger.

We should be subsidizing early childhood education for working families. It is an investment that will pay off in lower prison costs, better mental health and better schools (children who are better prepared for school do better in school).

Also the credit for education should be more generous.

[Oilwellian]

31. Lack of full day services for Head Start parents

hindered their ability to go back to school or work. We only had two Head Start centers that offered full day services for those parents who were in school or working. We needed all of our centers to offer full day services for those parents who WANTED to go to school or work. Lack of affordable child care is the number one hindrance for those who are trying to work their way out of poverty.

[SMC22307]

23. Not really, but it makes a nice headline. (n/t)

[eggplant]

24. OFFS.

Instead of bitching about what he "could have done" way back in the magical "before time", how about considering that the conversation is now changing. There will be a new POTUS in two years. Let's talk *now* about the things that we want to be the issues in *that* election.

Or is this just one big circle jerk because if he didn't get it done already, what's the point? It's like nobody remembers the last six years.

So yes, I'm glad to hear this sort of thing. Progress is victory. It may take a lot longer than I want, but it's a shitload better than the only very real and dangerous alternative. I lived through that, and I have to say, I'm a lot better off now than I was when assclown W was in charge.

It's been a hell of a clawback. Let's keep going.

[ladyVet]

25. Powerless lame duck proposes pointless changes.

Yay.

[ladjf]

29. The "powerless lame duck" is on the verge of

laying out it concise language the most important, high priority piece of legislation in the modern history of the U.S.
It deals with the gravest problem facing America, namely the inflow of wealth to the top 1%.

The President is a "lame duck" as the say. But, he is not powerless. Regardless of disappointing moves he may have made during his tenure , he is still the PRESIDENT, and because of that , he does have power. In this instance, the power to clearly state to the joint Congress a clear plan of what needs to be done to stop the devastating wealth distribution problem.

Regardless of the whining of the many Republicans, oligarchs, big businesses and other disgruntled people, millions are going to have access to his proposals. True, there is almost zero chance that the Republican Congress will pass such reasonable legislation.
Those who will oppose it, will launch a stunning array of propaganda initiatives which, in the short term, will succeed in convincing good Americans that such legislation is not needed because it would be "bad for business". Rank and file Americans will once again vote against their own best interests.

But, the challenge will have been laid out in terms that will greatly help define the simple good strategy for solving this monumental problem. There is no guarantee that the needed tax reform will ever be enacted. If not, the American economy will simply collapse, wrecking all hope for our financial future. Needless to say, that a collapse of the American economy would render similar disasters
around the World.

I'm disappointed to read in this string of posts, a majority were negative, sarcastic and petty. One would think that on a board for people who profess to support the principles of the Democratic Party, there would be more approval of the President when he decides to put out on the table a proposal of cardinal importance when he addresses Congress.

The President is not powerless. You and I are powerless.

[djean111]

33. We have been clamoring for "the principles of the Democratic Party" for years.

And while he is grandly proclaiming these wondrous um, what were we Progressives/liberals told to call them....oh, that's right - glitter-pooping unicorns, he is also campaigning mightily for the corporate coup TTIP and TTP.
So, forgive us for our cynicism, please. Also, if Hillary is the next anointed one - she has a hand in the TTP and TTIP, a big hand, and so I won't believe that she will actually have a Piketty moment, either.

You are admonishing people who have heard campaign rhetoric before, that is what is happening.

[ladjf]

35. You make reasonable points.

It's difficult to be any more cynical about American politics in general that I am. I've heard it all.

However, the wealth shift problem continues to get worse. My point, which I might not have expressed very well, is that
perhaps the time has finally come to lay this proposal out and fight like hell to get in enacted.

It doesn't matter what the history on this topic has been or how disappointing Obama has been, the President is about to say something to Congress that needs to be said. So far as "campaign rhetoric" is concerned, his proposal might be negative for the Democratic candidates. We might find them running from it.

[rogerashton]

26. Two points

1) Its about 2016. In 2012 and 2014, the Democratic party position was "We're not scary like Republicans." It didn't work in 2014 and, at the state level, not in 2012 either. By 2016, it can be "Here are these good ideas, and the Republicans have shown that they will oppose them if they can. Even the Republicans who are not scary oppose these good things. If you want these good things, you have to vote Democratic." (But free community college works better in that than "Tax the rich." The program should be "middle class tax cuts" -- and fiscal soundness: free community college, child care, and tax cuts for the "middle class" have to be paid for. We can pay for them by making the tax laws more fair.)

2) Why not in the first two years? Dealing with the recession and enacting Romneycare at the Federal level really did gobble up all the political resources the Demos had in those years. I think both of those could have been done much better, but there wasn't energy enough for a much longer agenda. I think many of us were mistaken about what the recession would permit -- we saw Obama as Roosevelt in 1933. Whether Obama is like Roosevelt or not, 2009 was not like 1933, politically.

[djean111]

30. TPP and TTIP do not equate to any Piketty moments. This is just rhetoric. n/t

[Oilwellian]

32. Indeed...think of TPP & TTIP

It definitely brings the true picture back in focus.

[librechik]

34. Kickety for Piketty

[QC]

36. This might be late but it's not really pointless.

It will at least get people talking about what needs to be done and maybe even pressure the Republicans a bit.

Probably the single thing that has frustrated me most about the president is his unwillingness to reshape the conversation. He has a lot of power in that regard, given his position and his obvious rhetorical gifts, but too often his approach has been, "Oh, well, Joe Lieberman (or whoever) won't like that, so no point in talking about it."

Yeah, I wish he had done this six years ago, but there's nothing we can do about that. Two years is still enough time to make things happen, so I give the president a thumbs up here.