Sharing The Burden of War and Taxes
TAX DAY is coming. For most Americans, it’s merely a reminder to get that paperwork done. But for many years, tax day reminded Americans that war means sacrifice.Since Sept. 11, 2001, President Bush has often invoked a spirit of sacrifice and dedication to the greater good. Yet this call to sacrifice has not made it into the administration’s economic and tax policies.
In past wars, those who could most afford to pay did so. During World War II, marginal tax rates on the wealthy reached over 90 percent. During wars in Korea and Vietnam, and throughout the Cold War, the most fortunate among us contributed almost as heavily to the national effort, paying at marginal rates of over 50 percent. Economic sacrifices were shared.
But now the Bush White House insists that those making $300,000 and up — already paying the lowest tax rates in 50 years — needn’t bother to pay a penny more toward national needs. This, despite stepped-up national security needs, active wars in both Afghanistan and Iraq, and the devastation of Hurricane Katrina.
In fact, since top tax rates were cut to 35 percent in 2003, millions of fortunate families, including our family, now pay many thousands of dollars less per year in taxes than we did before Sept. 11. Where’s the sacrifice in that? (You can estimate your own savings using the Responsible Wealth online tax cut calculator at responsiblewealth.org.)
Those fighting and dying in Iraq — and their families — are already sacrificing daily for all of us. Many have given their lives or their health in this war, but that’s not the only sacrifice these families are making.
It is no secret that families in military service are overwhelmingly of modest means, many barely getting by economically. Most military families have benefited only marginally from the tax cuts, while the sons and daughters of those who consistently reap the most economically from our system are, by and large, absent from the field of battle. It was once a truism that some fight, some pay. Yet because of our president’s policies, the same Americans end up fighting and paying, while most well-off families do neither.
This is not just shockingly unfair; it is unsustainable for a democracy. If the well off don’t pay their share, the burden falls on everyone else. A voluntary option is available: Well-off taxpayers can easily estimate their Clinton- and Bush-era tax cuts and redirect those savings with a donation targeted to efforts to help fix the problem. But given the massive scale of the shortfall, this will only go so far.
For six years, we have seen the erosion of service after service relied on by the average American. Schools are gasping for resources; infrastructure is crumbling; losses in benefits for the poorest and most vulnerable have been dire. Borrowing to cover essential spending is up as well.
The result is mounting national debt on top of rising personal debt. The current approach burdens not just this generation, but also everyone in the next generation. Yet once again, it is those of modest means who will experience the greatest suffering.
As we debate the course of the Iraq war on the eve of tax day, it is time for a different approach — one based on returning to shared sacrifice. If we do not plan to draft soldiers regardless of their economic class, then at the very least every American should bear his or her fair share of the economic burden.
Let’s bring back a 40 percent marginal tax rate on high incomes (over $500,000, perhaps) until this war is over. If the burden is borne broadly and fairly, the wealthiest Americans will have a powerful incentive to consider whether the costs of war outweigh its benefits. Only then will all of us have a personal stake in the discussion of how and when our exit from Iraq should proceed.
David Abromowitz and Joan Ruttenberg are lawyers and members of the group Responsible Wealth.
© Copyright 2007 The Boston Globe
This has been known by the public for sometine now - that the wealthy are not doing their part in sharing the burdens of this war that never should have happened.
I for one am outraged and perhaps if the wealthiest of this country had to kick down a few bucks, they just might feel outraged also. But why should they question or complain if it doesn’t effect their wallets?
I’m willing to bet if the marginal taxes on the rich were increased to 90%, this war would end very fast. However, without national conscription and taxes to support the cost of the war, we aren’t going to see widespread unrest and anti-war stances by the majority of the wealthy.
Could this also be a part of the overall evilness of this administration? We certainly need to begin a draft if Bush is going to get the bodies he wants for all the wars he has going. But a draft would begin to send home the bodies of the wealthy, and they wouldn’t want that. And by keeping the rich quiet through lower taxes, he knows his “base” isn’t going to turn on him.
Bush is a moron at best, but those around him are sharp as tacks.
Nice ideas. Don’t hold your breath.
DON’T SEND IT IN!!
Time for the Boston Tea Party Dance. Stop Bush and his neocon oligarchs from using other people’s children to pull the trigger for him, and his errant ideology. DON’T SEND IT IN!!
We must STOP refering to this invasion as a War. It is nothing more, nothing less than a Congressionally sanctioned ‘Police Action’ for purposes of plunder subjugation.
Peace, Best Wishes and Hope
http://www.youtube.com/watch?v=Tk1vEuhBuEU
Now yer talking zeitgeist . We havenèt come to that point in Canada ;we still have high taxes and enviable social services ,yeaah. Fed govt is leaning in Bushès direction but we will refuse to send it in before things digress that far. Funny,you had a revolution ; we only had two minor rebellions.
Ron - I almost wish I was a Canadian. But, alas, I’m not ready to give up on America.
Zeitgeist is right AGAIN! But I’m not going to risk having the IRS on my butt! Joan Biez already tried that during Viet Nam and it didn’t get too far. And with the new bankrupsy laws, you don;t have a fighting chance.
Anyway, I thing Hibridoma is on the right track. CANCEL the tax breaks. Return to a MINIMUM of 50% tax rate for the rich. And, close the damn loopholes. Further, take the cap off of Social Security and Medicare contributions. And don’t forget the “Other Income”. You know, that passice stuff. TAX the shit out of that over $500,000.
The point is that those earning over $500,000, no matter how they came by it, are benefitting more that any of us regular folks from sending our children off to war to protect their collective asses. If they won’t pay with the blood of their children, at least make them pay their fair share!
Rich man’s war; poor man’s fight.
Never ever changes. How about instead of reinstalling the higher tax rates for the rich we say that they can have their 35% tax rate IF they serve a tour in Iraq or ‘Stan? The option if they don’t is a 90% tax rate - no exceptions, no write-offs. I would pee my panties laughing at them jumping over each other to avoid either. Conscription for millionaires - after all they have the most to lose surely from “our way of life being under attack”?
Rebel Farmer…
Your right, if only a handful of tax revoltees were to protest their displeasure in this fashion, they would no doubt end up in Gitmo minus habeas corpus and all the other ambiguous benefits that accompany a status of enemy combatant. What is needed is organization into a massive ‘Shock and Awe’ tax revolt.
Ron…
Watch out Canada and Mexico, American refugees coming your way!
Peace, Best Wishes and Hope
http://www.youtube.com/watch?v=Tk1vEuhBuEU
Nobody never said nothing about making sacrifices when the decision was made to invade Iraq. I have never heard of a person of any real consequence who was morally opposed to paying lip service to supporting the troops for the purpose of bringing liberty and freedom to the muslim countries. It is true that a small minority is affected due to deaths and injuries caused by this adventure. This war has generally been good for business. Unemployment is at record lows and growth is up. Who knows the post war boom may be just around the corner. What more do you want?
zeitgeist April 9th, 2007 10:24 pm
“What is needed is organization into a massive ‘Shock and Awe’ tax revolt.”
Indeed, but highly unlikely to happen. Our best hope of overcoming a destructive government would be with the help of intelligent and patriotic military officers, both present and former, who understand that their “first” duty (by oath) is to support and protect the Constitution and the people….against ALL enemies, foreign and domestic.
There are many former and present military intelligence officers and other military personnel (just look at some of the top-brass whistleblowers in recent years) who are not buying into a corporate-led New World Order that will enslave future generations, including people from their own families.
If our politicians don’t shape up and start running this country for the people and not international corporations and their shareholders, direct intervention by the military will be our only hope of preserving the Constitution of the United States.
When push comes to shove, all hell will break loose in this country. Too many are suffering; millions of children in the U.S. go hungry every day and their health care needs are not being addressed. Millions of adults are losing good paying jobs along with their homes and health insurance. How much more injustice can the human heart and mind tolerate before an explosion takes place?
Gail April 10th, 2007 12:23 am…
I hear your cries and I wonder too!
Peace, Best Wish and Hope
America is fighting this war precisely to keep taxes low.
Low taxes create deficits but ‘deficits don’t matter’ if oil is traded in dollars - the world needs dollars to pay for oil and the US can just keep printing them.
Saddam wanted to trade oil in Euros. If this were to have happened, the unsustainable US economy would have collapsed - hence the invasion. Iran is mooting the idea of a bourse trading in Euros - hence America’s bellicose reaction.
I think they also want an artificially constructed higher oil price (one caused by their war) because it forces China to spend its foreign exchange reserves on oil and thus weakens their economy. A very typical, short-sighted capitalist economic plan. And of course they knew the war would bring huge profits for their oil companies and their allied service providers
I recommend we re-frame the issue. Instead of calling it the “Iraq War”, we should now refer to it as the “Republican-backed Occupation.” And since it is only Republicans who wish to continue the occupation indefinitely, it is only fair to impose taxes that fall exclusively on Republicans.
I hear the discussion; but at the same time, I also know that the 500K+ crowd does take a good percentage of that wealth and generates businesses and economic growth that create jobs for others. You can’t just dismiss the idea that the wealthy are there to be shorn like fat sheep; but also consider the implications if you confiscate their assets. What is the short and long term outcome? When is the last time you saw a hand-to-mouth person offer a job to someone? The concepts surrounding the redistribution of wealth have a long history, and we would be well served to consider them well. The successes of tax reduction measures of various administrations cannot be ignored. Why does this prove itself to be true time and time again? That is something to be considered before wholesale change is made.
Yep, and they are the people who do most damage to the environment, push up the house prices for the poor and semi-poor, create the instabilities in global markets and colonise wealth rather than share it. It is a phoney argument. No one gives me a tax break for buying sliced bread. The majority of people who buy sliced bread are poor or middling. Therefore they support the entire sxliced bread industry. Can I have my huge tax break now please? They also do all the work the rich won’t, fight all the wars and suffer all the unemployment.
They are happy to poison children, employ people for less than minimum wage, break the law with impunity and bribe to get the laws they want. So let them keep their corruption - I just want their tax breaks.
Again and again studies show that Reaganite policies do not cause investment in America by richer Americans. Reagan subsidised American industry and agriculture with such Soviet style investment that the rich were basically printing their own money. It was not simply that they reinvested wealth that tax breaks afforded them. It is just a myth the rich love you to believe.
I like this example from Britain. In The UK the government spends over $2billion a year on trying to catch $4 billion worth of welfare fraud (people claiming welfare money they shouldn’t). They have TV campaigns and posters about it and spend like crazy. Meanwhile business fraud against the government is virtually ignored even though it is worth - get this - $170 billion per year! Yes those poor rich businesses, my heart bleeds for them
Other than not being able to find a single shread of evidence to support your claim; I think you make a good argument!
In the 1920’s, as well as the 1960’s ~ and again under Reagan, marginal tax rates were lowered. In each case, economic growth resulted. Don’t know where you are getting your data, but if you look at the congressional record, you can clearly see the effects:
http://www.house.gov/jec/fiscal/tx-grwth/reagtxct/reagtxct.htm
Look Andrew, I actually want to actually BE one of those over-taxed wealthy people someday. I’m tired of being one of the under-paid oppressed at the low end of the scale and I’m working hard to improve my standing in the food chain and I want to make sure that I, along with millions of others, are able to make that climb, and pay those add’l taxes.
I’m looking forward to it actually!
“Look Andrew, I actually want to actually BE one of those over-taxed wealthy people someday” - That kind of says a lot. I am not sure where think wealthy people are over-taxed. Not in the USA. Maybe if you continue to get all your information on the economic benefits of Reaganite economics from Congress then all will appear rosie to you.
Many of the economic indices for the western world show that these kind of tax breaks do not help the economy - see the 1980s in both Britain and the USA boom and bust cycles. Meanwhile, the economic gap between rich and poor grew. Wages for workers in many industries over the last 40 years are shrinking in real terms. For example farm and food processing service industries where in real terms wages have decreased by a third.
It is important to not see economic success in terms of the wealthy. I am very happy for you that you intend to be one of these “people”, but I think you will find that if you look beyond the propaganda of the establishment that a) businesses did well because of subsizies, and b) their workers do not benefit from those companies doing well.
PDFee: As written in the article, during WWII, a 90% Marginal tax rate was placed on the wealthiest. After WWII, that rate dropped.
If you think that the US economy is doing well, then I suggest you do some investigating. Snce Reagan and Thatcher, real wages have been stagnant at best, and over the past 25 years the middle class has been diappearing. The trickle down theory of economics has been shown to be a sham. It never happened.
As for the jobs that have been ceated here in the US, these jobs tend to be in the service sector, with low wages and little if any health coveage. If you plan on having a family and make under 35K per year, then both parents will need to work. And very soon, the housing bubble will burst and then the economy will really begin to nose dive.
The current government has turned a budget surplus into a deficit in just a few short years. If it weren’t for China, Japan, and Korea buying government bonds, then we would be lost. Most of our financial support comes from communist China. Imagine that! A communist country keeping a capitalist county afloat financially.
I have nothing against the wealthy, but the truth is that the wealthy are the ones paying the least in taxes, while the rest of the country pays. The wealthy find ways to hide money from the IRS and use any loophole they can to avoid paying their fair share.
And they aren’t reinvesting here in the US. Their investments are creating jobs overseas - not here. Of course there are exceptions but overall, the wealthy don’t care about their country. They care about money and how to keep as much as possible.
Please do some reading. The evidence is overwhelming that the economy is growing, but only very slowly. And the new jobs that have been created are better suited to teenagers than families with children to feed, educate, and take to the doctor from time to time.
House foreclosures are at an all time high. Credit card companies are charging usuries interest rates on those who can’t pay. I can’t imagine how you have failed to hear about any of this.
What Hybridoma 2001 said!
(much more eloquent than I)
WmC April 10th, 2007 9:00 am
“I recommend we re-frame the issue. Instead of calling it the “Iraq War”, we should now refer to it as the “Republican-backed Occupation.” And since it is only Republicans who wish to continue the occupation indefinitely, it is only fair to impose taxes that fall exclusively on Republicans.”
Brilliant idea! We need people like you in the “think-tanks” around the country.
My hybrid friend ~ I’m sure you think what you’re expounding on is correct, but I respectfully disagree with your base concepts. Macroeconomics is certainly as much art as science, but thankfully we do have history to demonstrate its lessons. The Laffer Curve is one of the principles that I personally adhere to; but just plain common sense will also tell you that you will work harder when you work for yourself. If I knew that I was going to have 80% of my income confiscated through progressive taxation policy ~ then I certainly would NOT work as hard, would I?
The wealthy pay the least taxes? What a novel concept, but nothing could be further from the truth.
Here’s the reality, according to data from the Internal Revenue Service (Ref: Tax Foundation, “Distribution of the Federal Individual Income Tax,” Special Report No. 101) ~ The top 1 percent of income earners pay nearly 35 percent of the income tax burden; the top 10 percent pay 65 percent; and the top 25 percent pay nearly 83 percent. The bottom 50 percent of income earners, on the other hand, pay 4 percent of income taxes. So from those facts, you’re convinced that the “wealthy” pay the least taxes. Odd conclusion that.
During all of the 20th century, the expanding revenues of the federal government enabled the growth of both welfare expenditures and income redistribution. The Great Depression and the Second World War resulted in the adoption of wide spread welfare policies and progressive tax rates. When coupled with inflation and economic growth, the result has been a disproportionate escalation of tax revenues that have enabled income distribution schemes without voter recourse. While some Americans perceived welfare as social insurance against disability or loss of livelihood, it’s doubtful that the majority of voters would ever openly accept wholesale income redistribution. But in progressive taxation, they have.
As far as your dismissal of “trickle-down” economics, I’m afraid that history also has a differing view. Total tax revenues climbed by 99.4 percent during the 1980s, and the results are even more impressive when looking at what happened to personal income tax revenues. Once the economy received an unambiguous tax cut in January 1983, income tax revenues climbed dramatically, increasing by more than 54 percent by 1989 (28 percent after adjusting for inflation). Could you point to some evidence somewhere that supports the idea of regressive taxation can provide such revenue growth, I’d be interested in seeing it. I couldn’t find any when I looked.
I would suggest, Hybrid ~ that it is YOU that need to do not only some reading, but perhaps some considered and ponderous thinking also. If you take the time to read beyond your limited resources and politically motivated scope of thinking, you might have a different viewpoint.
Hence the 100 million people below the poverty line in the US today. Another great success story from trickle down economics.
i have done quite a bit of reading and I also like to include empirical evidence in my assessments. It is painflully obvous that trickle down economics simply does not work.
John Kenneth Galbraith, called them “horse and sparrow” economics: “if you feed enough oats to the horse, some will pass through to feed the sparrows.”
David Stockman, who as Reagan’s budget director championed these cuts but then became skeptical of them.
Speaking on the Senate floor in 1992, Sen. Hank Brown said, “Mr. President, the trickle-down theory attributed to the Republican Party has never been articulated by President Reagan and has never been articulated by President Bush and has never been advocated by either one of them. One might argue whether trickle down makes any sense or not. I do not think it does. To attribute to people who have advocated the opposite in policies is not only inaccurate but poisons the debate on public issues.”
For un unbiased look at the Laffer Curve, I include the following study.
First of all economics is an observational field of study. One gathers data and then tries to fit a model to it. It fails as a science because the models can’t be tested, except in the simplest micro-economic situations. Tax policy is not one of these cases. Economics is not physics. It is based upon human behavior not laws of nature.
Second the “common sense” observation that tax revenue falls to zero at tax rates of zero and 100% is a meaningless observation and doesn’t predict the shape of a curve which exists between them. When most people talk about the Laffer curve they mean to apply it to the income tax (or perhaps the corporate tax). That’s why they talk about a disincentive to work if the rate is too high. But in most advanced countries the income tax is graduated, so the Laffer curve wouldn’t be a single curve, but one for each tax bracket.
Let’s assume that the highest income tax bracket really was 100%. Does this mean that everyone would stop working? Of course not. Does it mean that those reaching the top bracket would stop working? No. Does it mean that they would even stop working when further income for the year would be zero? No.
Why not? Because there are many other reasons why people (even the super rich) keep working. They need to keep their business running, they need to plan for future, they like the prestige and perks that come with the position, they find the work intellectually challenging, or they like to see the firm grow. So even the basic assumption that work would stop if the tax rate reached 100% is not based upon any observational data.
During WWII many rich industrialists became “dollar a year” men. That is they worked for nothing to aid the war effort. Apparently there are other incentives besides money. But the miserly class thinks that their goals are the same as everyone else’s. Not everyone is a Walton who is worth $70 billion and constantly dreams of more.
Where is the objective data on the Laffer curve? Where are examples in the peer-reviewed, technical literature? Where are the hard numbers and predictions? Does the Federal Reserve refer to the Laffer curve when making policy? No. Even those who believe in the Laffer curve cannot say where we are on it. Are we on the left where increasing taxes would increase government revenue or are we past the peak where increasing tax rates lower revenue? They can’t say, because there is no Laffer curve.
The data speaks for itself. The rich are paying less and earning more than in prior periods. They are using fake economics to “prove” that this is a good thing. There is a curve alright. It’s the curve they have been throwing the public.
Moral: There is no Laffer curve.
As to the`share of taxes paid by the wealthy, here are some real facts
The wealthiest 5 percent have 59% of the wealth and pay 38.4 percent of federal taxes. The wealthiest 1 percent have over 38 percent of the wealth and pay 24.8 percent of federal taxes. These households have an average wealth of $10.2 million and pay only 3.5 percent of their wealth in taxes. By way of comparison, the bottom 40 percent of taxpayers have an average net wealth of $1,100 and pay 163 percent of their net wealth in taxes.
If all taxpayers paid the same 10.5 percent of their wealth in taxes as median income families pay, the taxes of the lowest 40 percent would be cut by 94 percent while the taxes of the wealthiest would triple.”
You can believe what you want but if you have been out walking the streets of any major city, it is plain as day what is happening in this country. As another person noted, we have more people living in poverty than at any recent time. And finally, look where the taxes are going. They are going to the military and prisons. So the people aren’t getting much for their tax dollars.
Even Bush 41 called it Vodoo economics. If you have any books you suggest I read, please tell me. But pesonally, the world needs more thinkers like John Kenneth Galbraith and less neo cons.
PDFee. One last thing. In biology this is the definition of Hybridoma: A cell hybrid resulting from the fusion of a cancer cell and a normal lymphocyte (a type of white blood cell). The hybridoma is immortal in the laboratory and makes the same products as its parent cells live forever. So we would use hybridomas to keep certain cell lines continually repoducing, rather than dying off.
In my biological reseach with Stan Prusiner, a recipient of the Nobel Prize fo his dicovery of prions, I was thinking of some odd name to use as my Yahoo Id. There were many bottles of solutions with strange names, but since we were studying Mad Cow Disease and using certain cell lines for research, I arbitrarily chose “Hybridoma.” So that’s why I have such a strange ID. Maybe you cn just call me a mad cow.