In an interview with CNN’s Fareed Zakaria, the billionaire investor George Soros said that he thought he should be paying more in taxes and took aim at Republicans who are trying to stop the “Buffett Rule” from becoming law:

ZAKARIA: What about taxes? Do you support President Obama’s proposal to increase taxes on the wealthy?

SOROS: Yes, I very much do so, because it’s the big boom, the super-bubble that resulted in a great increase in inequality. Not only do we have the after effect where we have slow growth one way or the other, but if you have better distribution of income, the average American will be better off.

Soros would be “one of the biggest losers” from Obama’s plan, he said, but he’s “willing to pay that” for the good of the country. Over the last twelve years, tax rates for the wealthiest 400 Americans were cut nearly in half, even as that group’s income quadrupled. In 2007, 150 of the 400 wealthiest Americans paid an effective tax rate between zero and 15 percent.

Polls have shown a strong amount of public support for the “Buffett Rule,” despite Republican resistance – although at least one Republican is aware of the inequality that exists in our nation’s tax code.

Christie has claimed that his plan is aimed at providing “across the board” tax relief. But as a new analysis of the proposal points out, those who will benefit most from the Governor’s plan would be the Garden State’s wealthiest residents, as its not income taxes, but property taxes that make up the bulk of the tax bill for Jersey’s middle-class:

A family earning $50,000 a year would save $80.50, and those making $100,000 would save $275, according to David Rosen, budget and finance officer with [the Office of Legislative Services]. Families who make $1 million would save $7,265, Rosen said.

The OLS analysis also examined a tax snapshot of 2004, the last time the Treasury Department married property and income tax payments by address. The data show that families in 2004 who made below $200,000 paid a greater share of their income toward property taxes than toward income taxes. For example, a family that makes $80,000 paid about 6 percent of its gross income for property taxes and about 1.6 for income taxes.

The opposite is true for the state’s wealthy, who pay a much higher income tax rate under the state’s progressive tax structure. A family that earned $500,000 in 2004 paid about 1.8 percent of its gross income for property taxes and 5 percent for income taxes.

The Newark Star-Ledger noted in an editorial that Christie’s plan “will primarily benefit New Jersey’s wealthiest class while doing little to ease the property tax burden on the middle class.” Already, according to the Institute on Taxation and Economic Policy (ITEC), New Jerseyans in the bottom 20 percent of earners — those making $12,400 on average — pay 10.7 percent of their overall income in taxes. Meanwhile, those in the top 1 percent — with an average income of $2,258,300 — pay 7.2 percent.

As Times of Trenton columnist George Amick noted, “it’s not the income tax that’s oppressing average New Jerseyans.” According to the ITEP data, property taxes in New Jersey are particularly regressive, while income tax rates are more progressive. Democrats have called for Christie to cut property taxes instead.

Christie’s plan is projected to cost the state $1.3 billion dollars by the time all of the cuts are phased in. In order to make up for that shortfall, some budget changes will have to be made, and if one of those changes is increasing property taxes, Christie’s plan could turn out to be even more regressive than it appears.

– Zachary Bernstein

After all, Romney made his fortune via investments made by Bain Capital, the private equity firm that he ran. And Bain’s investments between 1984 and 1999 “occurred when capital-gains rates were much higher than they are today. Yet Bain consistently attracted massive amounts of private capital, and thrived”:

Bain’s haul is further evidence that fair tax rates don’t hold back profit-seeking capitalists, at least until those rates reach a point that no one is proposing. From 1984 until 1999, the top rates on capital gains — the profit from investments as opposed to compensation for work — were often at 28 percent, and never lower than 20 percent. Indeed, in 1987, under President Ronald Reagan, the 20 percent rate rose to 28 percent — a 40 percent increase in potential taxation of Bain investment profit. (Yes, Reagan did raise taxes, even on capital.)

An analysis by the Wall Street Journal of 77 Bain deals in that time period showed that the firm “produced about $2.5 billion in gains for its investors,” on about $1.1 billion invested. Clearly, even with capital-gains rates almost double those today, fund managers such as Romney didn’t lack investors.

As billionaire investor Warren Buffett put it, “I have worked with investors for 60 years and I have yet to see anyone — not even when capital-gains rates were 39.9 percent in 1976-77 — shy away from a sensible investment because of the tax rate on the potential gain.” It’s worth remembering that it was conservative icon Ronald Reagan who completely equalized the tax treatment of investment and wage income, rejecting the argument that a lower capital gains rate was necessary to incentivize investment.

As Nobel Prize winning economist Paul Krugman has noted, the case for a lower capital gains tax is dubious at best. “Nothing in our history or experience says that unearned income has to be taxed this lightly,” he wrote.

Instead of finding commonsense solutions, the Republicans are talking about things that have nothing to do with middle-income taxes — like the Keystone pipeline, rolling back regulations to keep our air safe and our water clean and pure. These tactics are stalling — more evidence the Republicans don’t want to extend this tax cut. They talk about extending it but simply are unwilling to do anything to make it a reality.

Sen. Chuck Schumer (D-NY) agreed. “So we say to Speaker Boehner, instruct your conferees to drop the issue of Boiler MACT.”

Today, on what would have been Reagan’s 101st birthday, his former economist published an editorial — titled “Why the GOP should stop invoking Reaganomics” — in the Washington Post telling the candidates to stop it with the name-dropping. Bruce Bartlett, who served under both Reagan and George H.W. Bush, outlined the differences between today’s economic circumstances and those of the Reagan years, positing that while curbing inflation was the biggest issue in the Reagan era, today’s economic policies must be focused on boosting demand.

The result of those differences, Bartlett wrote, is that Reagan’s policies “can’t — and shouldn’t — be replicated today”:

Judging from the candidates’ tax proposals, they seem to believe that the most Reagan-like candidate is the one with the biggest tax cut. But as the person who drafted the 1981 Reagan tax cut, I think Republicans misunderstand the premises upon which Reagan’s economic policies were based and why those policies can’t — and shouldn’t — be replicated today. [...]

All of the evidence tells us that the economy’s fundamental problem today is not on the supply side but the demand side. According to a recent study by Credit Suisse, two-thirds of the difference in growth at this point in the business cycle, compared with previous cycles, is due to slower consumer spending. And low inflation — as well as widespread unemployment, vast stocks of unsold houses, empty factories and other indicators — tells us that money is tight, not loose, as was the case in the late 1970s.

Bartlett isn’t the only one noting the weakness of the GOP’s plans to bolster the economic recovery. Multiple economics professors told Reuters that the Republican plans wouldn’t pass an Econ 101 class. The candidates’ economic proposals will explode the deficit, expand income inequality through massive tax breaks to the rich, and hurt the poor and middle classes if enacted, but the GOP continues to ignore evidence that today’s situation is different than Reagan’s.

“Economic conditions are entirely different today than they were in Reagan’s era, and different conditions demand different policies,” Bartlett concluded. “Those who say otherwise are simply engaging in cookie-cutter economics — proposing whatever was popular and seemed to work once, without regard to changing circumstances.”

If you’re a tax geek, I’ve got a job for you. Help the rest of us non-tax experts out by contributing to a new wiki designed to track the broad range of subsidies going to the energy industry.

The Institute for Policy Integrity just rolled out an “energy tax breaks wiki” that will attempt to log every tax subsidy provided to the fossil and renewable energy industries. With all the political hand-wringing over permanent tax credits for oil companies, short-term tax credits for clean energy that are set to expire, and the differences between the government support provided to both sectors, this is a very important resource for helping uncover the opaque world of energy tax law:

The truth is, estimates range widely. With the federal deficit still a hot topic, and energy tax breaks playing a recurring role in budget negotiations, it seems important to have a handle on exactly how much energy producers get from the government. To gain a more precise accounting of these de facto subsidies, we are marshaling the expertise of lawyers, economists and tax professionals and compiling the information here in the Energy Tax Breaks Wiki. We are looking for any tax code section that specifically provides tax relief to energy producing companies.

Around 44% of government spending on energy in 2010 came through preferential treatment in the tax code. However, as CAP’s Richard Caperton recently pointed out, these expenditures do not often receive the same scrutiny as direct spending:

Both companies and the government have an established system for paying and processing taxes, so providing investments through the tax code provides for efficient delivery of incentives by tapping existing infrastructure and rules. More cynically, however, tax expenditures are an expedient that may be at cross-purposes with good government practice because they are held to different budget standards than direct spending. This means that working through the tax code is less transparent and therefore far easier to pass through Congress with reduced budget scrutiny.

Therefore, you have tax subsidies on the books for the oil and gas industry that have been in place since the early 1900′s. And because tax expenditures are treated differently than direct expenditures, the government doesn’t evaluate the effectiveness of these credits like it should. (See America’s Hidden Power Bill: Examining Federal Energy Tax Expenditures.)

With a little crowd sourcing, perhaps energy tax experts can help us pull back the curtain on tax expenditures through this new wiki.

ROMNEY: It was a mistake. I misspoke. I’ve said something that is similar to that, but quite acceptable, for a long time. And you know, when you do I don’t know how many thousands of interviews, now and then you may get it wrong. And I misspoke. Plain and simple.

RALSTON: What did you mean to say?

ROMNEY: Well, what I said was that my focus, my primary focus, is on helping people get in the middle class and grow the middle class. That we have a safety net that cares for the poor, I want to keep that safety net strong and able. The wealthy are doing just fine. But we really need to focus on the middle income people in this country. And you know what, if people are going to go after me when I make a mistake — when I slip up on a word I say, even when I say I got it wrong, sorry, that’s not what I meant — you know that’s part of the political process and I understand that.

Watch it:

However, Romney’s claim that he misspoke flies in the face of the fact that he’s used similar language before to explain his lack of concern for the poor. “The people who need the help the most are not the poor, who have a safety net,” Romney explained during an Oct. 20 town hall at Morningside College in Sioux City, Iowa. “The very poor have a safety net, they’re taken care of,” he said in an October debate.

According to the latest data, the percentage of Americans qualifying as “very poor” — meaning that they live in a household with an income of less than half the federal poverty rate — has hit a 35 year high, so they are decidedly not taken care of. And Romney’s economic plan wouldn’t make them any better off. In fact, Romney would raise taxes on 20 percent of households making between $10,000 and $20,000, because of his less generous tax credits.

Not only that, but his plan would cut critical safety net programs like food stamps and Medicaid, and limit the ability “to leverage federal resources to provide necessary social services to assist people in need.” As the Center for American Progress Action Fund’s Desmond Brown wrote, Romney’s plan “would provide $2.24 trillion in tax breaks to the superrich while cutting $2.17 trillion from critical health care services for poor and elderly Americans.”

Florida state Rep. Rachel Burgin (R) reads to children

Funded almost entirely by large corporations, ALEC produces “model legislation” favorable to industry that state lawmakers can introduce as their own bills. Usually, the legislators tweak the language of the bills to make them state-specific or to obfuscate their origins. Usually, but apparently not always.

In November, Florida state Rep. Rachel Burgin (R) introduced a resolution (PDF here) that would officially call on the federal government to reduce corporate taxes, but she apparently forgot to remove ALEC’s mission statement from the top of the bill, which she seems to have copied word-for-word from ALEC’s model bill:

As the government transparency group Common Cause reports, “Burgin quickly withdrew the bill hoping that no one had noticed and then re-introduced it 24-hours later, with a new bill number (HM 717), but now without the problematic paragraph.” Apparently no one noticed until this week.

While it’s no secret by now that conservative lawmakers in state capitals everywhere have used ALEC’s legislation to tear down environmental and labor regulations, curb voting rights, and coordinate a business-friendly agenda nationwide, it’s rare to see it on display so clearly.

In fact, according to the Michigan League for Human Services, Snyder’s tax reforms will “hit poor families 1,000 times harder than wealthy households”:

The League released a report that says the tax plan will hit poor families 1,000 times harder than wealthy households. Families making less than $17,000 a year would pay one percent more in taxes in 2012, while families making more than $334,000 would see their taxes go up by only .001 percent, the report states.

Gilda Jacobs, president and CEO of the League, wants to see a fair tax structure that doesn’t hit the poor harder than the wealthy.

“We want to be sure that we have shared sacrifice.” she says. “If you’re making $17,000 a year, this is going cost you about $100. That’s a lot of money to these people. That’s a car payment, that’s a winter utility bill. It’s huge.”

Indeed, state revenues will now rely more heavily on the middle class as the new tax code will generate $1.4 billion more from personal income taxes while dropping nearly $2 billion in revenue from businesses. And though Snyder insists that such corporate income tax cuts are sure to create jobs, the economic evidence proves otherwise. As the Center for Budget and Policy Priorities notes, such corporate tax rates fail to produce a net short-term stimulus, tend to cause a near-term drop in in-state economic activity because corporations are unlikely to spend the full amount of the tax cut, and actually creates “little or no added incentive for corporate investment in the long run.” At best, it produces a boost in economic productivity and jobs by only 2 to 3 percent.

But when it comes to programs that do provide a verifiable boost to the economy like unemployment insurance and food stamps, Snyder went straight for the ax. Indeed, he cut the Earned Income Tax Credit, funding for school districts, and vital aid for 11,000 low-income families and nearly 30,000 children. And with nearly half of Americans one financial shock away from falling into poverty, there’s no question that Snyder’s giving Michiganders a future that is 1,000 times more insecure.

“The President and his party’s leaders have fallen short in their duty to tackle our generation’s most pressing fiscal and economic challenges,” claimed House Budget Committee Chairman Paul Ryan (R-WI). “By contrast, the new House Majority has fought to put the brakes on the President’s spending spree.”

However, as Center for American Progress Director of Tax and Budget Policy Michael Linden noted, CBO was projecting a surplus for 2012 as recently as 2007, and plummeting federal revenue — not the GOP’s imaginary “spending spree” — is responsible for the lion’s share of the swing from surplus to deficit:

Most of that swing from surplus to deficit was the result of the Great Recession’s onset. Between September of 2008 and January of 2009 alone, economic conditions prompted the CBO to revise estimates of 2012 revenue collections downward by over $240 billion. [...]

The remainder of the deterioration did happen after 2009, but higher spending wasn’t even close to the main culprit. The real problem was lower-than-expected revenues.

In January 2009, the CBO forecast 2012 revenues at $3.1 trillion. Today, the CBO expects that this year’s revenue will be just $2.5 trillion, a nearly $600 billion difference. That revenue decline accounts for fully 48 percent of the swing from projected surplus to current deficit.

And while some of that decline has to do with continued economic weakness, the majority of it, about $335 billion, is the direct result of the tax cut deal signed into law in December 2010. That deal, which extended all of the Bush tax cuts, even those that exclusively benefit the very wealthy, is the legislative factor by far most responsible for this year’s deficit.

It was Republicans who insisted that the Bush tax cuts be extended for everyone in 2010, even during a time of record deficits. Not only is revenue the main factor behind today’s deficit, but it’s also the driver behind projected deficits:

As we’ve noted, a do-nothing Congress could virtually eliminate the deficit by simply not extending a slew of expiring tax breaks at the end of the year.

Obama’s State of the Union speech offered the first concrete details about the oft-mentioned idea, as he called for a 30 percent minimum tax rate for millionaires. And according to the Washington Post’s Greg Sargent, Sen. Sheldon Whitehouse (D-RI) will introduce a bill this week that could make the Buffett Rule law:

Today, Senator Sheldon Whitehouse will unveil a new proposal — first reported on this blog — to bring the tax rate of millionaires paying less than middle class taxpayers up to 30 percent. While we don’t know if the Dem leadership will act on this particular proposal, the “Buffett Rule” will get some sort of Senate vote. Republicans are all but certain to oppose it, perhaps unanimously.

Whitehouse told reporters today that he plans to introduce the bill Wednesday, after it is scored by the Joint Committee on Taxation. As Sargent noted, Senate Republicans are likely to rule out the proposal unanimously. Republicans have, indeed, gone a long way to protect the low tax rates of the wealthiest Americans. They insisted on a one-year extension of the budget-busting high-end Bush tax cuts in December 2010 and their intransigence on taxes repeatedly took the government to the brink of shutdown and default in 2011, even costing the U.S. its first credit downgrade.

Up until now, Congress has tried to reduce the deficit through spending cuts alone, many of them to programs that disproportionately affect the poor and middle class. The one tax hike the GOP has supported, meanwhile, would primarily affect working class Americans. Whitehouse’s legislation, however, gives Congress a chance to ask the rich, who have benefited from falling tax rates even as their incomes have skyrocketed, to share in the sacrifice.

Gov. Dave Heinemen (R), however, seems to believe that the poor aren’t doing their part in his state. Despite saying his “highest priority” was “tax relief for Nebraska’s hard-working, middle class taxpayer,” Heinemen used his State of the State speech to unveil a tax proposal that would do next to nothing to help Nebraska’s poorest residents while providing sizable tax breaks to the rich, Citizens for Tax Justice found:

In his recent State of the State speech, Nebraska Governor Dave Heineman unveiled his three-pronged tax reduction proposal: income tax rate reductions and broadening of income tax brackets, a reduction in the corporate income tax rate, and complete elimination of the inheritance tax. [...]

Nebraska’s tax structure is already regressive and asks more of lower income families than better off families…The Governor’s proposal does nothing to reduce property taxes, does little to assist the lowest income Nebraskans, and would actually make this disparity worse.

As CTJ notes, Heinemen’s proposal wouldn’t replace the $40 million generated by the inheritance tax, just a year after his last budget eliminated state aid to local governments. In Omaha, the county board passed a resolution opposing Heinemen’s plan because it would “force” them to raise property taxes, thereby increasing the tax burden on lower- and middle-class Nebraskans.

Reducing the income tax rate, meanwhile, would have a similar effect, forcing the state to rely even more heavily on regressive property taxes instead of the more progressive income tax structure.

Billionaire investor Warren Buffett and President Obama

However, as a new analysis from Citizens for Tax Justice pointed out, the Buffett rule as laid out in the speech could raise up to $50 billion per year to pay down the deficit, while affecting just 0.08 percent of taxpayers:

Citizens for Tax Justice has calculated that President Obama’s “Buffett Rule” would, if in effect this year, raise $50 billion in a single year and affect only the richest 0.08 percent of taxpayers — that’s just eight percent of the richest one percent of taxpayers. [...]

To calculate the $50 billion figure, we assumed that there would be a minimum tax that applies to adjusted gross income (AGI) minus charitable deductions. (We’ll call this modified AGI.)

We assumed that a taxpayer with modified AGI greater than $1 million would face a minimum tax of 30 percent of modified AGI. The taxpayer would pay whichever is greater, their personal income tax under the existing rules or this minimum tax.

Obviously, $50 billion by itself won’t balance the budget, but it certainly doesn’t hurt. At the same time, the Buffett rule will aid in correcting some of the problems in the tax code — like one quarter of millionaires paying lower rates than millions of middle class families and some millionaires paying no income tax at all — that have helped drive income inequality up to a level not seen in the U.S. since the 1920s.