Joe Scarborough: Cynical or Clueless?

Posted by Bob Lord

I really need to find something else to watch while I'm on the treadmill in the morning.

I'm watching the gang on Morning Joe today talk about the "fiscal cliff" negotiations, and Scarborough goes into a rant about how raising the top rate won't raise additional taxes from the super rich because they have high priced lawyers, but it will impact an "accountant in Poughkeepsie" making a quarter million a year who has to let someone go because of the higher rates. I've heard him make this same argument on previous occasions, so I didn't misunderstand him.

This demonstrates either incredible cynicism on his part to push a Republican talking point that he knows is flat out false, or an utter lack of understanding of how our tax laws work at the most basic, fundamental level. I actually think it's the latter, which is mind boggling considering that he served several terms in Congress, voting on federal tax legislation.

Taxes are imposed on net income, not gross income. Small business people hire and keep employees becasue those employees contribute to their net income. If an accounting firm owner pays an employee $70,000 per year and pays another $30,000 in beneifts and overhead costs associated with that employee, but realizes additional revenue of $200,000 from the employee's work, he'd be a moron to fire the employee, thereyb giving up $100,000 of net income the employee generates, simply because he's required to pay an increased rate of tax on the $100,000 of net income.

Yet when Scarborough speaks, it's clear that he believes (or at least wants the viewers to believe) that this hypothetical accountant in Poughkeepsie pays his employees out of his quarter million or so of net income, and that the increase of a few thousand dollars in his tax obligation would squeeze his finances, thereby forcing him to fire employees. Newsflash, Joe, that's not how it works. The accountant pays the employees out of his gross income, and pays income tax only on what's left. So the tax payments don't squeeze out employee compensation. They really don't.

It's ludicrous that Scarborough continues to make this argument, and pathetic that not one of the panel members ever questions him on it.

Of course, he's also flat out wrong about the super rich. Yes, they have talented tax advisors and, yes, much of their income is taxed at captial gains rates. But the expiration of the Bush tax cuts also will cause capital gains rates to increase. And many of the super rich (CEOs for example) make millions of ordinary income. Their high priced tax lawyers and CPAs do help them minimize their taxable income, but they don't wipe it out completely. If this were not true, then why the hell did Bush and Cheney work so hard to enact the Bush tax cuts in the first place, for the express purpose of helping their wealthy friends? If Scarborough were correct, that would not have been necessary.

It's just embarassing that MSNBC can't find a more capable host for its premier morning show. The guy's a moron. It's flat out negligent that MSNBC puts him in front of a huge audience. 

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