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PRESS BRIEFING BRIEFING.
I may try to do this semi-regularly, may not. But there were some interesting nuggets buried in yesterday's press briefing. As you might expect, the basic frame of the questions was something like "OH NOES! TAXES!" One particularly odd exchange centered around the White House's proposal to raise money for health care by limiting itemized deductions for the rich. Limiting itemized deduction affects, among other things, charitable deductions, leading one reporter [Update: Chip Reid of CBS, according to comments] to argue "charitable groups are not going to get the kinds of funds they need, particularly when people are suffering."
Charities do good work, but is there some charity out there providing universal health care -- or the actuarial equivalent -- and I just missed it? And if not, then predicating this question around the plight of the needy is a bit of a strange approach. People are, as Reid says, suffering. Would they prefer guaranteed health care or university endowments?
I'm also going to excerpt this sharp exchange between Robert Gibbs and, well, someone (the transcripts don't identify reports by name), arguing whether the upper-income tax increases kill jobs. Bit of a long quote, but worth reading in full:
Q On jobs, which is the big complaint up on Capitol Hill right now from Republicans, that this plan is a job killer, I mean, the $787 billion plan was all about jobs more than anything else, and now you've got a plan in place that -- how can you possibly tax people making over $250,000 something like $667 billion over the next 10 years and not have a downward effect on jobs?
MR. GIBBS: Well, Chip, how did it work in 1994 and 1995 and 1996 and 1997?
Q I guess their argument would be, imagine if they didn't have those -- those taxes, how much better it would have been?
MR. GIBBS: Isn't it interesting that there's always some little slip? Again, you know -- again, I don't do this by happenstance. There isn't a member of Congress, if they were to file a single taxpayer form, that makes above $200,000 a year.
Q Well, Congress. There's a lot of millionaires up there.
MR. GIBBS: Well, that's true. But it's on their income. I mean, I think it's interesting, as people listen to those complaining about some aspects of the budget, I think it's just interesting to note -- I think the President was pretty clear on Tuesday -- we're talking about people that earn in excess of a quarter of a million dollars a year.
Q And a huge percentage of those people are small business owners.
MR. GIBBS: Some of them are, sure. Some of them are big business owners. Some of them are home-run hitters in major league baseball. Some of them run kickoffs back for a living. Some of them are the President of the United States.
Q But a lot of them create jobs.
MR. GIBBS: Some of them -- certainly, some of them, that's what their job is. But I would reject this overall premise that when we're asking for tax fairness from the American people, that we're -- that this is going to kill jobs. I guess if I follow the logic of the Republicans on Capitol Hill, how do you explain last month's unemployment figures? Current tax rates, 550,000 jobs -- what happened?
Q This is a unique moment. (Laughter.)
MR. GIBBS: Apparently, it always is.
COMMENTS (18)
Evidently the reporter was Chip Reid of CBS.
Posted by: BrklynLibrul | February 27, 2009 9:32 AM
Not interested in this as a regular post. At all.
Posted by: Anonymous | February 27, 2009 9:35 AM
Actually, the correct answer was "only 2% of small businesses would actually be affected by this." The small business hit by the tax increase is one of those right-wing myths, kind of like the family farm that has to be sold to pay the estate tax. The numbers are grossly inflated.
Posted by: Sanjiv Sarwate | February 27, 2009 9:38 AM
Oh, Anon9:35, you little scamp. For the record, Ezra, I am. I don't have time to trawl briefing transcripts, and I am fascinated by the GOP mantra that high marginal tax rates for top earners kills job creation. I use the religious phrasing advisedly, since it isn't just the 1990s you have to explain, but the 1950s.
Posted by: wcw | February 27, 2009 9:38 AM
I would be interested in this as a regular post. Reminds me of the "Ari and me" posts in Common Dreams a few years ago (though those were for humour and "gotcha" moments where your angle will be more educational)
Posted by: scott | February 27, 2009 9:42 AM
Okay so I've heard this small business point before -- but this tax increase is on personal income, right? Not on the business.
So I don't really see the connection between raising taxes on people with high incomes and job losses. Maybe someone who knows about Math can explain it to me?
Posted by: Ilya Lozovsky | February 27, 2009 9:57 AM
I'm trying to figure out if the "new taxes" on upper income people is just the expiration of the Bush tax cuts-- which will happen without anybody doing anything-- or is something else. I think it's just that, and to me it's crazy to put that all on Obama as his tax increase.
Posted by: Doh | February 27, 2009 10:06 AM
You're being a bit parochial there, Ezra. Charities might not be providing universal health care, but they are providing essential care in regions in the world where there is currently none- on top of providing other essential services. To dismiss charitably donations as simply university endowments is misrepresentative and glib.
Posted by: Erin | February 27, 2009 10:07 AM
I wonder how much Chip makes. Wanna bet it's more than $250,000 per year? And that he thinks making that much is "normal" or that he is "middle-class?"
Posted by: CJ | February 27, 2009 10:08 AM
I thought the purpose of charitable donations was, you know, charity. You'd have to be pretty selfish to be upset that your tax deduction on charitable donations would be reduced.
Posted by: Matt | February 27, 2009 10:15 AM
Glib? Sort of. But university endowments are actually the single largest recipients of charitable giving (after religious organizations which, rightly or wrongly, I consider tithing more than charity). So though I agree the line is a bit glib, the point is not: Not all charity goes to benefit the needy. In fact, the majority doesn't. The vast majority of the new money in health care goes, for better or worse, to cover the uninsured. So which is more focused on the needy?
Posted by: Ezra | February 27, 2009 10:19 AM
The best thing about being a Repuke is that your beliefs are non-falsifiable.
Posted by: Gore 08 | February 27, 2009 10:31 AM
Ezra, I'd say - though I'm probably pushing my envelope today - this is probably not worth the effort: the press briefing dialogues are often in the weeds of the debate, and your time is better spent evaluating the big ideas, not the back and forth of press repartee. On charitable giving, I'd say the "glib" part of your comment is not where the giving goes, but that are choices are so either/or: this is where I get especially upset, because people dismiss arts funding - which is sinking rapidly - as a kind of "charitable" giving that does not matter like the others "universal health care... or an art museum?") and make both things smaller than they should be. I want good health care; I also want a civilization that cares about its culture. If we're going to adversely affect charitable giving to a host of causes... yes, I'm concernd about that, too. The point is, this a complex issue and we shouldn't spend time calling "helping the needy" the only good or appropriate act. Our universities are as good as they are, yes, because of endowments; our museums and performance halls thrive because people support them. We should encourage that... and we should do healthcare. I'm more in favor of a kind of liberalism that sees all of that, and doesn't force a false choice.
Posted by: weboy | February 27, 2009 10:39 AM
Ilya---this is on personal taxes, not business taxes. But my understanding (I am not an accountant) is that if a business flows their income through a personal return (eg my wife's S-corp income is reported on our personal return), then Obama's proposal essentially raises taxes on that business.
The point made by the administration is that there are not many small business owners doing this. Yes, I know I just said we are, but the income from this business is quite small.
Posted by: scott | February 27, 2009 12:26 PM
But Scott, following up on Ilya's point: taxes (whether business or personal) are a product of profit, which is a consequence of revenues minus costs. A small business's wages and salaries are a cost of doing business - and therefore reduce the revenues on which one pays taxes.
So the notion that raising taxes on high earners will affect job creation is entirely a red herring and a zombie lie of the highest order.
Posted by: McKingford | February 27, 2009 1:45 PM
the Universal Declaration of Human Rights doesn't mention art museums I say we work on what is covered there and then expand to vibrant culture
Posted by: revolt of the elites | February 27, 2009 1:56 PM
I'm all in favour of changing the laws regarding tax deductibility in the US, but I think a cap is the wrong way to go about it.
Tightening the restrictions on what constitutes a tax deductible organisation is a much better way to go about it. I go on a bit about the way we do things in Australia, but I do think the restrictions we've imposed on tax deductibility are a good model and limit, to some extent, the transactional nature of charitable donations.
I agree health care reform is essential: I'd just hate for organizations who do vital work in developing nations have their capacity to do that work limited by this reform.
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