Blog Roll
Who's My Legislator?

Virginia Blogs
All Things Education
Augusta Free Press
Crew of 42
Dixie Pig
Greater Greater Washington
Loudoun Progress
Ox Road South Blog
Pilot on Politics" blog
Power for the People
Richmond Sunlight
RVA Politics
Shad Plank
Vivian Paige

Find more about Weather in Arlington, VA
Click for weather forecast

Advanced Search

Warner's Gutsy Call: Will It Pay Off?

by: Goldmanusa

Sat Jul 09, 2011 at 13:04:54 PM EDT

by Paul Goldman

If Howard Dean had said it, the usual suspects would have called the former DNC chair an anti-business/socialist/pinko/anti-American/love-it-or-leave-whatever. They would have successfully used their 24/7 noise machine to drown out the message. But when Mark Warner says it, these same suspects smile politely and move on to another politically correct but factually incorrect position hoping to get Warner to fall for a different canard. They dare not call Warner all those silly names; they know he has too much of a pro-business image to turn him into a pinko/commie whatever.

Of what do I speak? Namely the urban legend, mostly recently repeated by none other than former President Bill Clinton, claiming the current corporate tax burden makes our corporations "uncompetitive" and has to be relieved as part of a "grand deal" on debt/taxes/economy/whatever.

Senator Warner had to set Bill et al straight, showing the real corporate tax burden has dropped dramatically since Bill Clinton began running for Governor of Arkansas. Indeed, let me go further: when Clinton was just a boy from Hope, the corporate tax burden, as a percentage of federal tax revenue, stood 300% higher than it is today: and as we know, Mr. Clinton grew up in the golden age of American business in terms of national policy (What's good for General Motors is good for America, famously said the Eisenhower Administration)

Senator Warner could have also said that, contrary to current claims from the usual suspects, corporate profits are at a record high, hardly a statistic supporting the view of corporate America being uncompetitive in the world. Truth is, the S&P 500 make more than half their profits outside of America!

Fact: Corporate profits are soaring despite the worst unemployment/underemployment situation for working families since the Great Depression. Why is no one at the "debt-ceiling" talks insisting on a job-creation part to an agreement when the GOP is ready to agree?

Goldmanusa :: Warner's Gutsy Call: Will It Pay Off?
Warner himself isn't even pushing a proven initiative he backs, along with the state's top Republicans, Tim Kaine and Jim Webb, that they all know could create 1,000,000 jobs over the next few years, based on the state's own sponsored study likewise backed by Governor McDonnell.

President Biden's top economic advisor wrote yesterday that school modernization is far better than road building in terms of jobs in a relative capital investment basis.

Eric Cantor put in the bill to fix the anti-business "rule" in the IRS code stopping it. So did Webb and Warner. It can be done fast.

So I say: Give Warner some major credit here. He was being intellectually honest, rejecting political correctness, and instead hoping to have a real discussion of real issues.

Should the tax code be simplified for corporations and individuals? Of course it should; only a tax lawyer like Michelle Bachmann would disagree, since complexity is why she got hired.

But don't confuse means and ends: A simplified tax code is a means to the end we want, presumably a fairer system of allocating the "rent" we pay for being Americans.

Warner had it right: Claiming that the "rent" paid by business over the years has somehow made them "uncompetitive" - to use Clinton's word - or unfair in terms of debt-ceiling mega deal, is simply not true.

It might be more than our society thinks business should pay, or it might be less. That is a judgment we must make. But at least let's have an honest discussion on the matter.

My suggestion: Warner should move from generic analysis to making specific suggestions that can create jobs right now -- small initiatives, yes, but they proved hugely successful for President Clinton, who left office with very high approval ratings on an historic basis.

Warner was early with his "Gang of Six," but they couldn't come to an agreement. So, he should pivot to specific suggestions, based on his idea from last year for target job creating tax-credits.

That is the part of the political spectrum open right now to Warner in a big way, with a big potential payoff down the road.

Now, it does need to be said that Warner's recent Washington Post OpEd may have been counter-productive, as it put him in the position of scolding everyone else. I know what his colleagues are going to say: "Warner voted for the Bush tax cut extensions, and the like, now he complains how others talk a good game but act differently. Who is he kidding?"

It is hard to be but so pure once in office. By definition, a "grand bargain" is a huge compromise by another name. Warner needs to keep having the guts to speak out for an honest discussion.

Of course, the Post OpEd will be taken personally by some people even though he didn't name any names. That's not his usual strategy. He has to be careful not to let frustration get him off his game.

Tags: , , (All Tags)
Print Friendly View Send As Email

Excellent diary, Paul. Just one quibble: The huge deductions .... (0.00 / 0)
One thing that is never really mentioned as a primary factor and should be in any tax reform discussion is the fact that businesses' tax bite is on their net profits after they have accounted for all the generous deductions they have always received. And the tax credits businesses have always received is no less than a "tax rebate" after they have taken all the deductions. Why not have an Alternate Minimum Tax (AMT) for businesses just like the AMT for individual tax filers ?

Too many voters think businesses pay taxes based on gross profits rather than net profits after all the deductions and tax credits have been subtracted out of their gross profits before taxes paid. Not so. That's why a hugely profitable company like General Electric can claim on their Fed. income tax forms that they have no taxable income: their net taxable income is in fact zero, because their and other corporate business lobbyists have written the complex tax laws to make it so.

Personally, I'd like to see the Fed. income tax code "reformed" and simplified to completely eliminate all deductions and tax credits with one flat tax rate for all income (including what's presently called "unearned income"). Most taxpayers would be amazed at how low that flat rate would be, with no way to avoid taxes by hiring very highly paid tax accountants and lawyers. But of course, that is certainly not the major tax reform the Speaker of the House is taling about, nor even what Obama or the Congressional Dems. mean. Their ideas of "tax reform" are different only in which special interest groups, including their favorite bribe-offering lobbyists, prefer (and that last comment includes some of the most corrupt labor unions in the country).

I'm not sure where this leaves us, other than with a bad taste of cynicism. But we can keep trying for a reasonable compromise that has at 50/50 chance of passing.

Thanks for the well-worded and thought-provoking diary,Paul. This is one of your very best.


Excellent Observation (3.00 / 1)
You are quite right that elimination of all deductions and tax credits would allow an extremely low tax rate. To avoid harming the working poor, we could keep the earned income tax credit and exempt a certain level of everyone's taxes from any income tax (say, the first $8,000 or so).

[ Parent ]
The power to tax is the power to kill (0.00 / 0)
so be careful what you wish for. I do not myself really care for a flat tax rate across all incomes of all types, especially when you realize that 2 percent of a $15,000 income represents a much heftier personal burden than 2 percent of a $3 billion income. Since our social-political infrastructure has enabled some of us to earn/otherwise accrue extraordinarily high incomes or wealth, it is only fair that such fortunate ones return something to that society, in proportion to their favored situation. (They probably would not be in such a comfortable position in any other place; there are plenty of good entrepreneurs in 3rd world countries who, lacking the infrastructure, can never so easily build a fortune).

I do think everyone should be made a stakeholder in America, and pay some kind of income/personal federal tax, even if it only amounts to $50-100 a year--- not only are too many corporations exempted from taxes, but so is a surprisingly large percentage of plain Americans.


Make a New Account



Forget your username or password?



Donate to Blue Virginia

The purpose of Blue Virginia is to cover Virginia politics from a progressive and Democratic perspective. This is a group blog and a community blog. We invite everyone to comment here, but please be aware that profanity, personal attacks, bigotry, insults, rudeness, frequent unsupported or off-point statements, "trolling" (NOTE: that includes outright lies, whether about climate science, or what other people said, or whatever), and "troll ratings abuse" (e.g., "troll" rating someone simply because you disagree with their argument) are not permitted and, if continued, will lead to banning. For more on trolling, see the Daily Kos FAQs. Also note that diaries may be deleted if they do not contain at least 2 solid paragraphs of original text; if not, please use the comments section of a relevant diary. For more on writing diaries, click here. Thanks, and enjoy!

P.S. You can contact us at and you can subscribe to Lowell's Twitter feed here. If you'd like to subscribe to Miles Grant's Twitter feed, click here. For Teacherken, click here. For Kindler, click here.

P.P.S. To see the Blue Virginia archive, please click here. To see the Raising Kaine archive, please click here. To see the Blue Commonwealth archive, please click here.

RSS Feed

Subscribe to Blue Virginia - Front Page

Powered by: SoapBlox