… but my question is, how does someone this politically tone deaf ever get elected to public office in the first place?
Seriously – if Obama had said this during a recession the right would have b**ch-slapped him into next Tuesday, and rightfully so.
Tod Kelly
Tod is a writer from the Pacific Northwest. He is also serves as Executive Producer and host of both the 7 Deadly Sins Show at Portland's historic Mission Theatre and 7DS: Pants On Fire! at the White Eagle Hotel & Saloon. He is a regular inactive for Marie Claire International and the Daily Beast, and is currently writing a book on the sudden rise of exorcisms in the United States. Follow him on Twitter.
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In his defense, he spends most of his time around people who make 30 to 40 times that.Report
That’s a good point, people define their level of wealth or poverty by comparing themselves to their immediate peer group so he may genuinely feel like a poor cousin.
That doesn’t mean he shouldn’t a little more circumspect of course.Report
It’s only “politically tone deaf” if you assume we live in a society in which a man who creates businesses is expected to feel bad about keeping the fruits of his entrepreneurial effort.
Oh wait, we live in America where people are exactly like that, so I guess you have point.Report
Oooooh, burn! I suppose those people can take small comfort in the fact that those people basically run the place, and so have set things up so that they not only keep their fruits, but get ever more fruit. It must be tough being wealthy, with such small comforts, though.Report
“those people basically run the place”
Good grief.
Yes, I’m sure Rep. Fleming, owner of a chain of Subway franchises, is indeed trying to not only keep his “fruits” (i.e., the money he earned) but is trying to “get ever more fruit” (i.e., earn more money). Isn’t this what all normal hard-working people do?
We really should stop complaining about unemployment in this country. Since we absolutely despise anyone who has the gumption to take the risk to create non-govermental jobs, we should prevent them from doing so. No more job creation, otherwise the rich may get richer and have the audacity to expect to keep some of the rewards of their labor. And we can’t have that, now can we?Report
sounds like there is damn good money in non-governmental strawman creation.Report
… most intelligent entrepreneurs figure, like Mr. Ford, that the more money their customers get, the more money they’ll make. Ergo, striving to keep every penny in their pocket actively costs them money (because money swirls into “investor” pockets, from whence it never returns to the marketplace).Report
Pet peeve time. This notion of Henry Ford is sorta true (in that he sorta said the same thing himself) but misses a big picture of what he did.
Sure he paid unskilled labor something like a then unheard of amount of 5 bucks a day.
But he did it by continuously refining his assembly line and production practices that got eventually rid of almost all the skilled labor that used to be involved on Ford’s line when it first started. And who getting paid a lot more than 5 dollars a day.
Today we call that ‘outsourcing’Report
Fleming is one person, and I’m pretty sure you made a generalization (we won’t get into how much money a chain of fast foot franchises might bring in, and how that compares to, say, most people). So who do you think runs this place? Labor or capital? The answer is one of those two. If you think it’s labor, you can’t be helped.Report
. So who do you think runs this place? Labor or capital? The answer is one of those two.
False dichotomy.Report
James, I didn’t mean it as a dichotomy, though I did express it that way. I just meant that the answer is in that pair, even if that pair doesn’t exhaust the possibilities. Capital definitely runs the place, even if the bulk of influential capital now resides with corporations rather than robber barons.Report
Chris,
I think there’s a falseness in singling out that pair as the answer to who runs the place. Not that they aren’t tremendously important actors (it’s not dumb to highlight them), but it’s a very simplistic view of American politic. At an absolute minimum you’ve ignored the influence of Christians–is it labor or capital that determines that the U.S. will oppose Palestinian statehood? Less obviously environmentalists–it is labor or capital that has kept drilling out of ANWR (money + jobs!)?
The problem is in the belief that somebody “runs” the place, rather than recognizing that the place may not actually be “run” by anybody, but that the output of the state is the messy mix of competing interests. Some are more influential than others, but in the end it’s not necessarily a logical conclusion that anyone–even multiple interests in conjunction–are actually “in charge.”Report
Absolutely. Someone who truly believes in the free enterprise system actively encourages the wealthy to whine about how hard they have it.Report
Sure, it’s the only way politically to protect the market system!
(Just joking, sort of…the joke may have an unfortunate degree of truth to it.)Report
… not really. it just encourages things like Reagan’s ponzi scam of 401ks and inflating the stock market.Report
You honestly think this kind of thing helps? It makes him look like someone who deserves a 90% tax rate.Report
Joe:
Anyone who is talking about making $600,000 a year, of which he is spending $200,000 a year “feeding his kids” (his words), and then only has $400,000 a year left “to reinvest in business” is really not too much in touch with what the average Joe makes, or how the average Joe feels like he’s running faster to lose ground more rapidly. “Dude, you’ve got $400,000 in discretionary income a year? I can’t hardly pay to feed my kids on the $N I *bring home*, after paying for rent!”
That’s pretty much the definition of tone-deaf, if those average Joes are the ones who cast votes to get you elected. If I was this guy’s political adviser, I’d be drinking heavily after seeing that interview.Report
First, if his version of how he handles his money is true, it sounds like he needs a better accountant. His businesses gross $6,000,000, so he pays himself (it would appear) @$1,000,000, pays @$400,000 in taxes, supports his lifestyle to the tune of @$200,000, and then reinvests the remaining $400,000 of his personal income in his business ventures. That is, if his story is to be believed, he’s unnecessarily incurring about $200,000 per year in income taxes on money he could reinvest from within the business without incurring the tax obligation.
Based upon the information shared in the video it seems more likely that he pays himself the considerably larger salary not because he wants to reinvest money, but because he actually spends the @$600,000 on his home and lifestyle.
Second, let’s say his tax burden goes up about 3% on his income above $250,000 per year. So he gets a @$1,000,000 salary, pays @$430,000 in taxes, spends @$200,000 ‘feeding the kids’, and has… $370,000 left to invest instead of $400,000? Wow… talk about depriving him of “the fruits of his entrepreneurial effort”.Report
Spoken like a true idiot who will never make the kind of money in the video.
Here is the reality. The congressman owns a corporation which is structured as a sub-chapter S corp. Therefore, ALL corporate income shows up as PERSONAL income on his taxes. His accountant advised him to do this because it is the most intelligent way to SAVE money that would otherwise go to paying taxes (needlessly). The full delta is on the order of 15% less in taxes, which supports at this rate about 80 additional employees.
The truly tone-deaf in this discussion are those who have NEVER owned a business and if they did in fact own one, would soon find themselves dead ass broke like the liberal icon George McGovern did.Report
Wait, so we’re supposed to feel bad because the most tax-advantageous structure for his particular business will end up somewhat less so after a change to the tax code? Either it will still remain the best structure for him financially, or it won’t and he’ll form an LLC or something.Report
Dude, the LLC is STILL a subchapter S equivalent. So is a proprietorship, partnership and anything else like it.
The US has the highest corporate tax rate in the industrialized world. There’s a good reason corporations decide to base elsewhere (such as Bermuda), otherwise they are at a competitive disadvantage. Also the corps that are earning money overseas must LEAVE the money overseas, investing elsewhere, helping foreign economies and hurting ours. Our tax code is fished up because our politicians are idiots. This should come as a surprise to no one.Report
Great subject change there, but pretty off-topic. If the dude is really making $400,000 in capital investments out of $6,000,000 in sales, he’ll find a way to get deductions, maybe only through depreciation or tax credits for particular investments.
I’m not a tax accountant but the LLC I do have a stake in seems perfectly capable of managing it.
I don’t think you’d find many folks here that wouldn’t vote to lower marginal corporate income tax rates significantly, preferably if paired with elimination of the majority of credits that result in relatively high marginal rates and relatively low tax collections, but have the fun side effects you mention which have almost nothing to do with personal income tax rates that are the actual subject at hand.
Unfortunately, the U.S. Chamber prefers to hold out for just lowering rates and keeping all the deductions and whatever distortions come with them.
None of that changes the fact that Rep. Fleming is a twit if he thinks he’s making a strong case to keep personal tax rates on the very highest earners low.Report
If you don’t want to pay taxes, simply don’t accept payment. It works out marvelously. Or So I’m Told.Report
I honestly don’t believe he is being tone-deaf. Fleming received 62% of the vote, so I think the question about tone-deafness is making assumptions about his electorate that are a bit dodgy. We do know that a large proportion of the American public responds positively to this kind of argument. Whether it’s mere Horatio Alger style fantasizing or whether they honestly admire businessmen who earn more than the average Joe is an interesting question, but not really the point here. The point is, many Americans respond to this kind of argument, so making this kind of argument in a district that has a majority of those types is not an example of tone-deafness at all–it’s just a tone that some people find grating, and that they have difficulty in believing that others don’t.Report
Whether or not they’re open to the argument, his tone-deafness comes from his self-pity.
It’s the self-pity in the abscence of any reason for it that comes across as childish and ignorant.Report
E.C.,
From my perspective, I agree with your second sentence. But I can’t agree with your first sentence because you repeat the claim of tone-deafness in response to my argument (about why it’s not tone-deafness) without providing an actual rebuttal to my argument.
Tone appropriateness is not an absolute value–it’s relative to the audience. If Flemming’s audience contains a large number of people who appreciate different tones than you, to them his tone sounds just fine, and “tone-deaf” is an inappropriate descriptor.Report
Actually, I said, he sounds tone-deaf because of the self-pity with which he delivers his argument.
He is part of the national deliberative body, his audience is, in part, a national one. If he doesn’t understand that, then he’s ignorant on two counts.Report
I’m not so sure I agree. I think you’re right that these kinds of arguments can be popular, but I think in order for them to be so they need to be more general and less specific. I think someone saying “I work hard for my money, and then the government comes and takes it away – I make a good living, and even I have a hard time getting by thanks to taxes!” works really well when your average voter has a family income of about $50K. I think complaining that you have to limit your food bill to $200K a year to those same people is more than a little risky.
Also, if he is a business owner… unless he works for a company very, very unlike any I have ever seen before, his entire staff just got a whole lot less productive, and will now be spending inordinate amounts of time by the water cooler bitching about how little they get paid.Report
RTod–good points. It’s an empirical question; now we just need to devise a test to see who’s right.
E.C., OK, I can see that. Not sure I’m persuaded, but the claim was there for me to see, and I missed it the first time around.Report
James – I think in general the fact that almost no congressman or senator is willing to say anything like what Fleming said is evidence of the macro. (Or maybe not? Maybe it just means that most pols are cautious, but you’re still right?)
On the micro – It seems if he is made to pay at the next election – either by losing, having to spend an exorbitant amount of $ he didn’t have to spend to get there in the first place, or groveling that he was misunderstood, then I think I will have been proven correct. If he stands firm and coasts, or if the opposition doesn’t even bother bringing this up, there will be no doubt in my mind that I owe you a huge “you were to totally right, dude.”
But the thing I said about his employees at the water cooler? I guarantee you that’s happening.Report
It’s not tone-deaf, it’s a dog-whistle.
Anyone with half a brain or who has ever done any business larger than a lemonade stand knows his numbers and his description of them are complete crap. Re-investment in his business (as an LLC) comes out of the other side of the ledger. His profit (and tax) is measured after that. That’s why you construct such things as personal LLCs. He either knows this or is a moron.
IMNSHO This is just a “I’m rich and you can be too. H8rs gonna h8. The middle class is unworthy” flag to wave in front of his base.Report