Perkins Rebutted By A Fellow 1-Percenter

Click here for a rebuttal to Perkins' "Kristallnacht" letter in the Wall Street Journal (the post below). It's from a Digby piece on Hullabaloo entitled "Even the top 1% is disgusted by Tom Perkins," written by investor and technology consultant John Forbes. Some quotes from the article:

Mr. Perkin’s statements are part of a trend by wealthy investors and corporate executives to try and paint the people who are advocating more sensible and equitable economic policies in this country as a bunch of ignorant villagers waving torches and pitchforks, desperate to demonize those that they see as more successful than themselves. Perkins is not the first to take this position, with Stephen Schwarzman of Blackstone having made a similarly tone-deaf statement equating closing tax loopholes with the Nazi invasion of Poland. I assume in the coming days that we will see more of these breathless condemnations of those who dare to challenge the privileges that many of these people now enjoy, many of which are completely unearned and actually deeply damaging to our society.

Corporations and wealthy individuals have always lobbied for their own best interests, as is their right. But not since the Age of the Robber Barons in the late 1800’s have we seen the balance of power swing so far towards business interests and the wealthy. Our legal and tax systems have now been seriously corrupted by corporate lobbying, with business interests drafting hundreds of new laws that favor high net worth individuals and corporations over the interests of the overwhelming majority of ordinary Americans.

Stating that both Democrats and Republicans in Congress bear responsibility for "current policies that favor wealthy investors like Mr. Perkins at the expense of regular taxpayers," Mr. Forbes explains two of those policies:

The first is the absurd tax break that allows venture capitalists, hedge fund managers, and other wealthy individuals like Mr. Perkins to pretend that the salaries they receive to manage investment funds are not regular taxable income. The general public is easily misled by arcane terms like “carried interest”, but let me assure you as somebody who has worked in this industry for a quarter of a century that this loophole has no justification, and no relation to what capital gains tax rates were originally created for. It should be an embarrassment to every taxpayer and elected official in the United States that this loophole continues to exist. I should note that I am joined in this opinion by such well-known financial commentators as Jim Cramer, who is hardly an enemy of Wall Street. This tax break alone is costing the country billions of dollars every year in lost tax revenue.

The second policy is the institutionalized tax dodging of America’s largest corporations, which has now risen to a truly pathological level.

He elaborates on "the second policy," and states:

It is important to understand that large US-based corporations are now using these artificial structures to pay tax rates that are so low that they are effectively destroying the corporate tax base of this country.

When you combine these issues with the fact that many highly profitable corporations are paying their employees wages that are so low that they have to rely on welfare and food stamps (the costs for which are then shifted to taxpayers and local municipalities), you have the makings of a perfect storm. When you combine these issues with the fact that many highly profitable corporations are paying their employees wages that are so low that they have to rely on welfare and food stamps (the costs for which are then shifted to taxpayers and local municipalities), you have the makings of a perfect storm.

He concludes:

We can be sure that we will see continued attempts to hide these facts from the American public, and we can anticipate that the stakeholders in the current system will mount increasingly sophisticated marketing campaigns designed to convince the American public that these unbalanced policies favoring the wealthy are key to our shared success. In fact, nothing could be farther from the truth, and Americans from all economic classes need to join together and apply their best efforts to reform the regressive economic and tax policies that are currently doing so much damage to our country.