Memo to Senator Whitehouse: Slogans Aren’t Solutions

The Rhode Island and American middle class can be forgiven if they are head scratching and feeling a glazed over sensation in their eyes lately as they listen and watch the political class do battle over one of the most confounding documents of the U.S. government.

The mind-numbing minutiae and complex computations of the U.S. tax code are having their moment this spring and it’s clear the politics of “who pays what” will be with us for the duration of the 2012 election season.On the national level, no one would dispute that it’s a complex, confusing, loophole-ridden and yes, under certain calculations-- unfair---application of tax rates onto a broad spectrum of earners and payers.

On the state level, though one can certainly make the case that the RI tax code has been misguided for many years, it’s not been misguided in the direction that current progressive voices would have one believe.

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But what put Rhode Island at the center of the Washington battle over tax policy has been the voice of its own junior Senator Sheldon Whitehouse, sponsor of the now defeated “Buffet Rule” measure, allegedly designed to bring more tax rate fairness to “ordinary people”.

The “Buffet Rule” legislation, born out of billionaire investor Warren Buffet’s now famous observation that he pays a lower tax rate than his secretary, has catapulted Senator Whitehouse not only into the national spotlight on this rhetoric heavy debate, but also into the Obama reelection campaign’s strategic clutches.

The Buffet Rule bill, which would impose an across the board, few deductions, 30% minimum tax on households earning $ 1 million or more, is now facing an uncertain fate since losing a key Senate rule vote a few days ago. However, passage or no, it clearly gives Team Obama an easy to digest class warfare argument going into the summer of the re-election, thanks to their buddy Senator Whitehouse.

There are many sides to the layers of debate on display this weekincluding the counter argument about the maze of deductions and other tax shelters built into the tax code, which not only have the effect of lowering the rate for the highest income earners, but bring benefit to many earners, including small business owners and those generally considered to be within the middle class. But the very partisan Senator Whitehouse, seeking the easy sound bite, pitted the “RI truck driver” versus the “hedge fund manager”, as if there’s few constituencies in between, and didn’t seem interested in acknowledgingthat more comprehensive efforts to overhaul the tax code have been the subject of several bi-partisan supported reports and efforts as he went after the Republicans with great relish.

The point that seems to elude Senator Whitehouse is that he would have more credibility as a potential champion for tax fairness if he consistently displayed equal outrage over the squandering of tax dollars paid by the middle class as he does about the rate they pay in the first place.

It’s too bad Rhode Island’s media seeking Senator can’t get as equally worked up and sound bite loaded up over the shameful recent tax injustice thrust on the very modestly earning people of Woonsocket for example. It was widely chronicled that school department financial mismanagement, if not outright deception, is the underlying cause to a $ 10 million dollar deficit that sent the city perilously close to bankruptcy in recent weeks. Adesperate measure 13% supplemental tax is now hitting property owner taxpayers who have a median household income that falls just under $40,000 dollars a year, among the lowest in the state. Where is the Whitehouse outrage for these ordinary and tax weary constituents? Where is his call for an investigation into how the fiscal mismanagement, manipulated and/or hidden from the School Committee was perpetrated, and where is his demand that there be consequences for public employeeswho mismanage the taxpayers’ money?

I suppose it’s understandable that the aging confines of Woonsocket City Hall, which are not visited by network news crews and national political reporters, has not generated the same kind of interest for Rhode Island’s upwardly mobileBuffet RuleSenator.

The Buffet Rule bill does indirectly attempt to address the burden of the property taxpayer because it would exempt tax-free municipal bonds from a new tax rate. Cities and towns rely on the bonds for borrowing as a way to avoid raising more property taxes. But critics this week argued that the municipal bond exemption is among the many reasons the bill would not really add much to national coffers for deficit reduction or assist with paying for needed programs. The wider point is though it sounds impressive to say $47 billion could be raised over the next decade with the legislation, the projected wider loss in business investment and thus-job creation- would clearly outweigh the gains in fairness the Senator is allegedly seeking.

Just in recent months we’ve seen “taxing the rich”; the “war on women”; “the other side likes to protect billionaires”; and now, “the truck driver versus the hedge fund manager.” Unfortunately, slogans aren’t solutions and pandering to voters isn’t actually leadership. If they were, could just end the campaigns tomorrow, because Obama and Whitehouse win hands down.

Donna Perry is a Communications Consultant.

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