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Why Not Really Tax the Rich?
WASHINGTON - March 3 -
GAR ALPEROVITZ
Available for a limited number of interviews, Alperovitz is co-author of the new book "Unjust Desserts: How the Rich Are Taking Our Common Inheritance and Why We Should Take It Back." He said today: "The Obama effort is positive, but it needs to be put in larger perspective to understand its limitations: The top marginal tax rate was 91 percent in the Eisenhower administration. During the Nixon administration it was about 70 percent. Now it's 35 percent and we're talking about going back to 39.6 percent.
"Obama also promised proactively to end the Bush tax cuts during the election. He now seems instead to be allowing them to continue until they expire in Fiscal Year 2011.
"Most important: In recent years the top 1 percent has seen its income grow dramatically from 9 percent to 18-20 percent of the total. The tax increases are tokens compared with this doubling of their share. If the share of the top 1 percent was maintained at a 'mere' 9 percent, the budget deficit in most years could be largely paid for.
"In any serious historic perspective the proposed tax cuts for working people are also token; $65 a month for a working family is very modest. For 30 years, working people in the U.S. have seen their wages do little more than keep pace with inflation.
"We are also seeing very little discussion of corporate taxes. Corporations at one point paid 35 percent of total federal taxes. Now, depending on profit levels, they pay as little as 7 percent and never higher than 15 percent.
"I think what Obama is doing is good, but there are huge gaps in his policies. Most glaringly perhaps is that there's no meaningful discussion of poverty. It was the same during the campaign; Obama's focus is almost entirely on the middle class. The word 'poverty' rarely if ever is mentioned.
"We know from modern economic research that most wealth derives ultimately from socially created knowledge and other societal contributions -- an inheritance that should be devoted also to the entire society. A just and fair tax system would reflect this reality -- something people like Warren Buffett and Bill Gates Sr. now also regularly urge."
The author of numerous books, Alperovitz is professor of political economy at the University of Maryland.
GAR ALPEROVITZ
Available for a limited number of interviews, Alperovitz is co-author of the new book "Unjust Desserts: How the Rich Are Taking Our Common Inheritance and Why We Should Take It Back." He said today: "The Obama effort is positive, but it needs to be put in larger perspective to understand its limitations: The top marginal tax rate was 91 percent in the Eisenhower administration. During the Nixon administration it was about 70 percent. Now it's 35 percent and we're talking about going back to 39.6 percent.
"Obama also promised proactively to end the Bush tax cuts during the election. He now seems instead to be allowing them to continue until they expire in Fiscal Year 2011.
"Most important: In recent years the top 1 percent has seen its income grow dramatically from 9 percent to 18-20 percent of the total. The tax increases are tokens compared with this doubling of their share. If the share of the top 1 percent was maintained at a 'mere' 9 percent, the budget deficit in most years could be largely paid for.
"In any serious historic perspective the proposed tax cuts for working people are also token; $65 a month for a working family is very modest. For 30 years, working people in the U.S. have seen their wages do little more than keep pace with inflation.
"We are also seeing very little discussion of corporate taxes. Corporations at one point paid 35 percent of total federal taxes. Now, depending on profit levels, they pay as little as 7 percent and never higher than 15 percent.
"I think what Obama is doing is good, but there are huge gaps in his policies. Most glaringly perhaps is that there's no meaningful discussion of poverty. It was the same during the campaign; Obama's focus is almost entirely on the middle class. The word 'poverty' rarely if ever is mentioned.
"We know from modern economic research that most wealth derives ultimately from socially created knowledge and other societal contributions -- an inheritance that should be devoted also to the entire society. A just and fair tax system would reflect this reality -- something people like Warren Buffett and Bill Gates Sr. now also regularly urge."
The author of numerous books, Alperovitz is professor of political economy at the University of Maryland.
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3 Comments so far
Show AllQ: Why not really tax the rich?
A: Because we already do! When the marginal rate was 90% it was a different nation, it was a different world. You cannot turn back the clock.
Q: What portion of taxes do corporations pay?
A: Zero percent! Corporations don't pay taxes! Taxes are levied on corporate profits and since profits are a function of sales, those taxes are passed on to the customers of the corporation. Who pays ultimately? The consumer; no one else.
Q: "We know from modern economic research that most wealth derives ultimately from socially created knowledge and other societal contributions -- an inheritance that should be devoted also to the entire society. A just and fair tax system would reflect this reality -- something people like Warren Buffett and Bill Gates Sr. now also regularly urge."
A: That's because we've exported the portion of the wealth-making that used to come from production! So that make's the quote just another meaningless statement -- a twisting of the facts to suit an agenda.
Support the FairTax!
Since Bubba Clinton and the Bush Family have outsourced our industrial base
to China, we produce nothing. We cannot tax "nothing". The super rich who are
still making money from the transfer of their money making products to China
are the only ones making money, it is only fair that they pay higher taxes to
make up for the loss of our industrial base in this country.Why is this so
difficult to understand? Because of this transfer of wealth to China our
small businesses are not only suffering, they cannot afford to advertise in the
local newspapers that has become the reason for the loss of the press.
Why is this so difficult to understand? Where is Pat Lamarche? Is she outsourced
to that new Casino in Bethel again?
LeeAnnG
I've heard it said many times that the wealthy already pay the bulk of taxes in this country. I'm not sure of the figures, but the percentage is high. However, when it becomes clear that the top 1% of the population owns about 20% of the wealth, and also that the top 10% owns perhaps 90% of the wealth, the amount paid by the rich doesn't seem so "unfair."
Corporations not only pay low percentages in taxes, most of them pay none at all. By moving headquarters to locations outside the US, they avoid income taxes. I don't know how this works, but it appears to be true from many articles I have read.
There is a point to be made that corporate taxes are taxes on the customer. If I buy a $10.00 item and the seller makes a $5.00 profit out of which $1.00 is paid in taxes, of course that money originally came from the buyer. However, if an employee gets a paycheck for $2,000 and pays $250.00 in federal taxes, the money originally came from the employer. But no one says with any credibility that the employer is paying the employee's taxes.
The amount a person or corporation pays out of profit or salary is that individual's taxes, not the entity it came from. (One can argue this point philosophically, of course.) The only way it would make a difference is if, for example, the employee were paid less if there were no taxes. Then, the employer would save that money. It doesn't seem to work that way. And yes, corporations do raise the price of their products to cover the taxes, so perhaps there needs to be some kind of regulation concerning this issue.