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A Progressive Tax: It's Not Socialism, It's Correctionism
People don't want to talk about taxes. Most of us are afraid that a tax increase will impact ALL of us. The media shies away from such a controversial topic. Certainly the rich don't want to talk about it. And even lower-income people seem to have this sense that they will be wealthy someday, and government shouldn't interfere with their plans.
So on we go with the cutbacks in train and bus service, and the loss of teachers, the cancellation of after-school programs in low-income areas, reductions in library hours and park services. Plus, of course, increases in state income taxes, sales taxes, property taxes, gas taxes, cigarette taxes, utility costs, license fees, parking meter rates.
The public rarely hears about one of the major causes of this assault on the middle class.
From 1980 to 2006 the richest 1% of America TRIPLED their after-tax percentage of our nation's total income, while the bottom 90% have seen their share drop over 20%.
That's a TRILLION dollars a year, one-seventh of America's total income, that went to the richest 1% while 90% of us went backwards.
But, many people ask, don't the very rich pay most of the taxes? Just federal income tax. And they pay less than 23% of their incomes in federal income tax. If state and local taxes, social security tax, and excise taxes are included, the lowest-earning half of America pays 24% of their incomes in taxes.
But isn't taxing the rich a form of socialism? Since 1980, if the average working family had received compensation based on its relative contribution to America's prosperity, it would be making an average of $45,000 a year instead of $35,000. Through 30 years of deregulation and financial maneuvering, the richest 1% have taken $10,000 a year from every American family. That's socialism in reverse.
But doesn't "income mobility" explain and mitigate the apparent inequities? In his book, "Intellectuals and Society" (Basic Books, 2009), Thomas Sowell claims that statements about inequality are "confusing statistical categories with flesh-and-blood human beings."
Sowell relies heavily on a 2007 U.S. Treasury Department report about income mobility that states "Among those with the very highest incomes in 1996 – the top 1/100 of 1 percent – only 25 percent remained in this group in 2005." But he ignores the fact that nearly 9 out of 10 of those in the top 1% remained in the top quintile of earners over those ten years. They may have dropped out of the most elite 1% group, but they remained close. The apple doesn't fall far from the tree.
But that isn't even the main point. More significantly, our economy allows a tiny percentage of us to take an inordinate amount of money from society, at an increasing rate. Some people may have dropped out of this elite group, but those who have moved in are making even more! The result is a system in which one man (hedge fund manager John Paulson in 2007) can make more money than the total of the salaries of every police officer, firefighter, and public school teacher in Chicago, while another man stands hungry in the cold. And any attempt to fix the system is called socialism.
So what's the solution? Several states have implemented more progressive tax systems. And they have apparently not caused wealthy people to transfer their fortunes out-of-state. A 2008 study by Princeton University determined that "the 'half-millionaire tax,' at least in New Jersey, appears to be an effective and efficient revenue-generation mechanism, having little impact on migration patterns among half-millionaire households." [1] Similarly, little adverse effect of higher taxes was found in Maryland or Oregon. [2] A study by the California Budget Project revealed that the number of high-income households actually grew during periods of higher income tax rates for top earners. [3] Oregon recently passed Measures 66 and 67, which impose modest income tax increases on the wealthiest residents and raise the corporate minimum tax for the first time in 80 years.
President Obama is right to seek a progressive federal tax structure in which the very rich will return some of the money derived from years of deregulation and shrewd financial strategies. We need Congress and the media to support this way of thinking.
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78 Comments so far
Show AllYou just said everything I've been saying for years. Good job. Is it unfair to progressively tax 'the rich'? I will leave that to the 'how many angels can fit on the head of a pin' crowd. There's nothing right about people sleeping in the streets, but somehow that unfairness doesn't faze them. Life isn't fair, I guess. But people CAN be. So if you leave it up to 'life', unregulated, then 10% live with far more money than they could spend in a thousand lifetimes, and millions sleep on a grate. Call it socialism, but people can do better than life, they can make a fairer system, where the rich are still comfortably rich, and the poor are taken care of better. Its not pie in the sky, either. We did it for 50 years, between 1930 and 1980, and built a much better America than the flat busted slave plantation Reagan turned it into.
T Boone Pickens wrote a book: "The first billion is the hardest". That title unintentionally tells the truth: it is much easier for money to make money, than for labor to make money. And the pileup of excess wealth, 'idle wealth' as I call it, in this country is money looking for trouble. Pickens used his billions to fund the Swiftboat attack ads against the Kerry campaign: those highly damaging ads were hardly educational. Instead, they took the public discourse to a new low. But Faux News is the ultimate example of the damage that idle wealth can do. Idle wealth is the devils playground, and no where is that more true than in modern America.
This article needs a sequel that addresses corporate taxes.
In 1970 corporations paid 29% of the US income tax bill. Today they pay 6% and within a decade they will pay zero.
During that same 40 year period corporate welfare increased exponentially.
Every dollar corporations are not paying in taxes is another dollar that the government must extort from you and I.
Aye.
The short version of Raygun's accomplishment: he shifted the burden of U.S. taxation from wealth to labour.
Now the wealthy get all the fruits of others' labour.
The end.
Isn't that the way it is supposed to be?
Raygun? Who controlled Congress at the time? What about the D Congress under Carter?
I believe the Republicans controlled Congress when Raygun was making his 'supply-side' tax changes.
From January 1981 until January 1987, Republicans controlled the senate.
Democrats controlled the house, and then regained the senate in Jan 1987.
Thank you, now can someone tell me how the legislation passed without support from Ds? If I recall correctly the top tax rates were cut under Carter and it was a D Congress. How can one blame it all on Raygun?
I heard that Kennedy actually started the process of reducing the max marginal income tax bracket from the really high rates they were for the prior 30 years. And, as predicted, this helped stimulate the economy and INCREASE tax revenues. But, there's a reason they call it the 'Reagan Revolution'. It was a tax revolt, really, he SLASHED taxes and never looked back, not even when the nat'l debt TRIPLED before he left office (That should've been a clue that tax revenues DIDN'T increase as they had before). I don't blame Reagan for the tax revolt: if its what the people wanted, then, fine. I blame him for the nat'l debt. The gov't owed the people some fiscal responsibility: the other shoe Reagan needed to drop after slashing taxes was to slash spending. Instead, he RAISED spending. Sorry, but so many trillions of dollars of debt later, its hard not to hate him for that. If he'd slashed spending, the American people would've gotten a short, quick dose of just what it was their taxes were paying for, and they might have altered course. But Reagan let them have their cake and eat it too, and now this generation of Americans is going to have to pay for BOTH.
I hear you loud and clear ubrew, however when so many Ds in Congress go (went)along with R policy it is difficult to simplistically blame it all on Reagan and the Rs. All I am pointing out is that so many policies that are conveniently blamed on Rs had massive support from the Ds. The same goes for Bush policies, when so many Ds went right along and continue the Bush policies under Obama.
We had a great country when our tax rates were much more progressive than now. Why does anyone want a country where only a few control nearly all of the wealth and income? The low tax rates on the rich just makes them more greedy, not any happier. No, we do not want pure socialism, or sharing the wealth equally, as that does not work either because it kills the incentive to work to better oneself. Our tax rates were about right when Reagan decided the rich needed to be pampered and Bush just had to hand them another basket of goodies. We will pay for generations for the actions of the last two decades. Starting an endless war and not paying for it was really a wonderful idea for the selfish rich people, who are now in control of this country.
For most of the last 30 years, my main beef with people who want low taxes is 'when are you going to pay for them'? (ie in the form of lessened government spending)
Cutting taxes may be Republican, Raising spending may be Democratic, but what is putting $11 trillion on the tab for your children to pay called? 'A*sh*le?'
Like it or not, our $11 trillion debt (as handed off to Obama a year ago) is 100% the cause of the 'lets cut our taxes' crowd. They may have called themselves Republicans, but that is NOT Republican behavior, its way too fiscally irresponsible. Yet, they did it anyway. I have absolutely NO patience for such people when they throw the 'socialist' label at me for wanting to raise taxes.
How is getting your granchildren to pay for your government services NOT socialist?
If the government services benefit society as a whole, they MAY be defined as socialist. If the government serviuces are corporate welfare, the ARE defined as fascism.
basic economics states that an economic system that gives ALL the gains of the economy to one segment of society is by definition "fixed" and corrupt.
THAT is what we now have - productivity goes up and up and up and the real wages go down. In layman's terms we work longer and harder and make the same or less.
The other main point that is not addressed is that the top income bracket has been lowered and lowered until most people say "ONE good year and I'm at the top rate, we need to lower the rate".
Historically the Top Tax Rate was not reached until someone made around 2-3 million in todays dollars. Not 40-50k. Then the top tax rate was 70-90 % - but only on millionaires incomes.
People making a few hundred thousand a year were NOT in the top tax bracket.
SO when Obama talks about raising the top tax rate he needs to say we are making a "new top tax rate" you don't hit til 3 million a year. Sure there aren't many people in that bracket - SO WHAT!
Tell the STORY that the rich have to pay - even if it only hits a few fatcats - it tells the story that we are interested in the poor and middle classes and that enormous wealth is a BAD THING.
But Obama has now turned to taxing the middle class in health care, raising taxes on those making 250k per family.... That's a BAD STORY.
republicans know what that means and it is a huge part of why they are successful and have peple vote against their own interests - their STORY is better than the democrats.
There is no such thing as a rising tide lifts all boats. IT"S BS. If the economy grows more than 3-5% per year the FED will raise rates thus slowing growth. Hence the economy an wages in general are FIXED in the short term - where we all actually live. The more the wealthy have the less evryone else has.
During the Eisenhower administration the top income tax rate was nearly 90% on incomes in excess of around $250,000 (over a million dollars in today's value) Was Eisenhower a socialist? The top tax rate now is around 33% and there are more loopholes and shelters than ever before.
"In a two party system, if BOTH parties ignore public opinion, there is no place voters can turn. And in the matter of taxation, it has been clear that Americans have wanted taxes that are truly progressive"
(Zinn, H. "The Peoples History..." p. 581)
Decades later, our tax rates are even more regressive. Contrary to popular myth, the dismantling of the progressive tax system is the result of Congress and WH controlled by BOTH parties. The Ds blame Ronny Raygun, however who controlled Congress? The two-party mythology is indeed hard to unseat, even with hard evidence.
socialist
True about rates in Eisenhowers time, of course there were very, very few people that made that amount.
There are many today that do. Inflation, depreciation of currency and many more people that can make more accouint for it.
"And in the matter of taxation, it has been clear that Americans have wanted taxes that are truly progressive"
Are you advocating we remove the earned income credit? That everyone pay taxes?
Caligula,
True, but the rate topped out at 90% and was steeply progressive even at lower income levels. The rates have been gradually made more regressive over the decades. Crudely put, the steeply progressive rates of that era ought to be restored (adjusted for inflation of course). For that matter a complete overhaul of the social security and income tax laws is needed.
socialist
Cannot disagree with that! Can only applaud the sentiment. Kudo's.
As a Libertarian-sympathizer, let me sketch out an argument they make: If someone earns the money, legally, then society has no right to take it (except for limited uses like defense - ha, I know, I know). This Noble Individual has mixed their labor with property and transferred its ownership unto themselves. Let's take Bill Gates, as an example.
What this model overlooks, and Gates readily demonstrates, is that the ability to earn wealth is often predicated on the existence of a large population with disposable income. Gates would not have become rich if only a hundred people could afford his invention. A football player can make millions only because millions watch on television. The individual and their money-making scheme, whatever it is, owes a piece of its success to the existence of all the customers who support it. Gates, like Henry Ford, needs customers to be successful, and a nation of 300 million can provide them.
Now suppose Gates had instead invented Air, Inc., a company that everyone needed in order to get air to breathe. Suppose his invention was not just profitable but vital. Current rightwing thought does not recognize the need for limitation on profitability when the potential for profit becomes harmful to the whole. Let's say though that Air, Inc. exists under GOP rules of trickle down and they do nothing to limit its profits (unlike previous eras where the concept of monopoly was fresh). Air, Inc. keeps raising its rates until the poorer populations begin to die off. With fewer customers, it raises its rates more, and so on until only a few are left who can pay the ever higher rates. Air, Inc. owns the Congress and the airwaves (so to speak) and those left have no choice. Soon, the rest of the economy and the people collapse, leaving only Gates and his Air, Inc., which shortly goes under because there is no one left to buy his product and there is no one left to provide all the other services that Air, Inc. had actually relied on all along - no food productions, shipping, basketballs, etc..
If you're still with me, the point is that the current concept of individualism and its rights overlooks the context of society. Those whose great success is partially due to the size of our society owe in proportion. The product doesn't exist in a vacuum. I think one can believe in both the right of individuals to keep the fruits of their labor and of the right of society to say, yes, but there is a natural limit beyond which an individual's success cannot become harmful to the society which provided everything that made that individual's success possible - from his schooling, feeding and housing right down to his customers.
And as long as I'm at it, I'd also like to say that the rightwingers and corps have a point when they say corporations are over taxed. They call it double taxation. The corporation is supposed to pay 35% and then the individual pays another tax on dividends (currently only 15%) or as regular taxable income. This has partly fueled both the move overseas and the tax dodging in offshore accounts. Both of these things are bad for our economy. We should look at a way to incentivize businesses to stay here if we want jobs. I think a progressive tax rate much closer to what we used to have can be justified along the lines of my above scenario, but the instrument that produces those earning shouldn't be chased overseas. Donning flame suit.
Pitch Fork
Seems a reasonable argument in the main. It does you no good to have a 90% tax rate if there is no one there to pay it.
"If you're still with me, the point is that the current concept of individualism and its rights overlooks the context of society"
To darn right. There did exist in our contry a "social contract" between business, giovernment and our citizens (i.e. society. This was broken when business stArted their "Golablist" sell, their "all one world" mantra to jettison their own workers for at first illegal labor, then later foreign labor brought in legally (H1B's and many other programs)to drive down wages and get rid of citizen workers, then moving the actual facilities overseas, thus depriving communities of both jobs and tax base.
Exploding their profits while still exploiting our protection and our market with the help of government.
Time to recognize their game and reinstall that concept. Time to stop the silly talk that "nationalism" is dead as every other country in the world is practising it as hard as they can while laughing at people foolish enough to believe such drivel as business and their shill's have been spouting for years.
THE EXPLANATIONS ARE excellent...especially if people need to hear the "how" - as in the examples above.
I have always put it in the most simple of terms:
the RICH are NOTHING unless they live WITHIN a society.
they are only rich as a result of social order ALLOWING them to be rich .
without PEOPLE there is no society. and the rich are rich because they SKIM OFF the wealth from the collected wealth created BY people and a society.
the RICH do not CREATE wealth - they only GATHER MORE of it to themselves.
it has NOTHING to do with a person "inventing" something.
if Albert Einstein was so greedy like the mega-billionaires - he could easily have demanded, and used his brain to manipulate "legalities" - demanded contracts for "dividends", "copyright". etc. etc. --
so that the RESULTS - in countless trillions of daily use everywhere - of his E=mc2
gave him not just Tens of Billions but QUADRILLIONS of dollars by the time he died.
"richness" is nothing but a RESULT of the existence of people creating a society and its "agreed upon" contracts..which, as we know, the rich MANIPULATE to their advantage.
but to put things above short:
There is NO such thing as a "selfmade" person who became Rich by his LONE RUGGED INDIVIDUAL SELF . the rich exist IN society and DEPEND on society to make them rich. PERIOD.
if there were no society IN WHICH and OUT of which to "become rich" the "rich" would be nothing but Mewing, lonely, frightened, sick, cold, tired individuals who can't even carry a bucket of water for themselves day in day out without creaking in the knees before WOLVES surround them for FOOD! much less to "prospect" for GOLD and DIG it out all by themselves and CARRY it to their cave and COUNT how much it is worth and ENJOY their "wealth".
they'd DIE of starvation and illness long before they can say "I"m rich".
one can also put it this way:
the PYRAMIDS were not built by the PHARAOHS -- they NEEDED millions of people across generations WILLING and/or coerced through social and cultural beliefs and contracts to AGREE to bend their backs and haul stones!
the GREAT WALL of CHINA was not built by the "RICH EMPERORS" only -- they needed the PEOPLE to do so - to agree to be RULED by "the emperors" because of social and cultural and law mores.
the EMPIRE STATE BUILDING did not rise up because some rich folks are superhuman that can lift big steel up in the air and put it all together after dragging the iron ore out of the mines in pennsylvania --
by their lone -- oh-so-productive selves. they needed PEOPLE who agreed - because of social , cultural, legal contracts to BEND themselves silly so they can eat bread and for their families, and put their collective labor so a Tall building can rise up with elevators.
the RICH are the PARASITES of the earth....as the people are the SALT of the earth.
that's all there is to it.
another way of putting it is:
if - especially from the standpoint of capitalists and "libertarians" :
bad economic systems (they say about socialism, communism) produce and impose systems that turn out POOR populations (castro, china, soviet russia, etc., they also say) ..
THEN - it also follows that "good" economic systems - they ALSO say -- create and produce RICH folks. such as in capitalism.
BUT THE PROBLEM is :
IF capitalism and "libertarianism" CAN CREATE RICH PEOPLE...how come they ALSO create POOR people FROM which the RICH and the CREATION of "rich people" TAKE their wealth? -- as the ESSENCE of capitalism and libertarianism?
and: IF capitalism is so good at creating wealth , then how come it is also so good at creating even more massive poverty?
teddy
Ah! But Teddy, if you want to see massive REAL poverty, you'll have to leave our country. Real poverty has no car, no TV, no food stamps, etc.
But I'd like to say in my opinion we haven't had "capitalism" since Bill Clinton signed the bill to remove Glass-Stegall. That let the dam burst. And it had been under assault by big business since the late seventies for sure.
Caligua,
Teddy is a Philippino. So, I'm sure he has seen poverty.
Ther are lots of poor people in the US who have no car (but some well-off poeple too - owning a car is really just an inconvenience in a properly-functioning urban area). As far as a TV, considering that one can found used for free or nearly so - probably even in the Philippines, it is hardly a measure of wealth.
Yes, I bet the Chinese and Indian governments don't sit around thinking about ways to outsource jobs to America. It always bothered me that the proponents of globalization never had to answer how any American job could compete with a foreign worker whose cost of living was so much less than ours. Example, two computer engineers, one in America needing to make $75K and one in India who can live nicely on $7K. Until the one in America has the cost of their housing, food, transportation and social costs collapse, he or she is not going to be "competitive." The GOP said that cost difference was all the result of regulation and set out to get rid of it, and drown what was left in the bathtub. When they finally achieve the collapse of our living standard and our social contract, we will be competitive with peasants the world over. The economy, here, will be a smoking ruin.
I grew up thinking leftist politics was populist. Now it is being defined as anti-nationalist, i.e., America and capitalism are the problem, and some here say if we get rid of both then all problems are solved. I'm still thinking both are salvageable. But I find it interesting that the desire to destroy both on the left serves the multinational corporation's aim to make the world one big sweat shop under totalitarian rule by the 1%, enforced by CIA drone and surveillance oversight. And, it's the totalitarianism that scares me, not whether it comes from left or right.
Yes, we used to have a national identity and a social contract, a public good. It is a measure of how much it has been lost that it sounds so quaint to even say it. That's why I use those subversive terms all the time, so that younger people will hear them.
Pretty cool that we can have these conversations. Nice talking with you about it, Caligula.
Pitch Fork
"I grew up thinking leftist politics was populist. Now it is being defined as anti-nationalist, i.e., America and capitalism are the problem, and some here say if we get rid of both then all problems are solved"
As a liberal from way back, I have trouble understanding that myself. Every single piece of anecdotal evidence refutes the anti-capitalist mantra. As to America, I'd stack our record up against any country ever. People forget or refuse to acknowledge others flaws.
"But I find it interesting that the desire to destroy both on the left serves the multinational corporation's aim to make the world one big sweat shop under totalitarian rule by the 1%, enforced by CIA drone and surveillance oversight."
That is the most amazing part of all, because you are exactly right. And I'm darned if I can understand the mindset that refuses to see reality. That wants to believe what the corporations are selling.
I see people here favoring proposals put forth by the left that any fair minded person would be screaming bloody murder about if put forth by the right. They would be calling it what it was, coersion, unfair, dishonest, etc...but put a feel good name on it and say its for the benefit of all and bingo!, its for the benefit of mankind!
"Pretty cool that we can have these conversations. Nice talking with you about it, Caligula."
Its past cool, its the difference between America and most of the world.
Keep "pitching"
I'm sympathetic to the conservative mantra that gov't spending could be made more efficient and hence smaller. However, the less taxes corporations pay, the more taxes people pay. We don't want to chase away corporations, but I don't think our corporate taxes are unusually high compared to the rest of the developed world. Trying to be like China and India is a race to the bottom.
An argument can be made that corporations hire people, hopefully educated people, and that educated people don't live where government services, like education, are minimal due to low taxes. So if they want low taxes, they can put up with low education in their workforce. Its a situation similar to Air, Inc.
I ran across a bumper sticker: "This is America, We don't redistribute wealth, we EARN it!" What people earn for an hours work, however, is the problem. As long as Bill Gates can 'earn' in an hour what you won't make in your entire working life, to say people 'earn' their 'fair' compensation is ludicrous. It may be fair to capitalism, but it isn't fair to society. Hence, lets keep our earnings scales as ridiculous as they are, since this is of some importance to capitalistic decisionmaking. And, for a fairer society, lets 'redistribute the wealth', via taxation. This allows us to keep both worlds: high compensation for capitalistic 'fairness', and an inclusive society for community 'fairness'.
The bumper sticker should read: "This is America. We EARN our wealth! And then we Redistribute it, for the commonwealth!"
"..the ability to earn wealth is often predicated on the existence of a large population with disposable income."
Actually, the ability to earn wealth is predicated on having wealth to start with, and with any incremental increase in wealth, earning more wealth becomes progressively easier. Same exponential-rate-of-change physics as a runaway chemical or nuclear reaction.
Good for Obama. But since the rich make the rules, it will be very difficult to establish a fair wealth tax. It could also be undone by a change in administration.
A best solution would be to have a cap on personal net worth decided by yearly referendum. It could be high enough to keep the profit motive, but low enough to prevent extreme concentration of wealth/power.
Wealth cap excesses should have to be given away to individual persons, not to organizations, foundations, governments, churches, corporations or institutions of any kind.
Of course, this idea is too far out for most of us to legitimize. We may think we don't follow the establishment, but most of us do.
"...corporations are over taxed. They call it double taxation. "
?!?!?!?
Unwind this. Double taxation for the owners of the corporation, the shareholders.
The Corporation itself is a consumer of the commons. As you point out above, the product has to have a public to sell to. And roads to deliver the goods on and a justice system to protect them et cetera.
That consumption is nowhere to be found in their ledgers. There's no line for environmental depletion, it's not taken out of their bottom line. What they do pay in taxes doesn't come close to covering.
The Shareholders are not the Corporation itself. They don't receive all of the profit as dividends, the Board of Directors sets a level of profit disbursment and retains the rest within the company's accounts as "reserves". And much of their bottom line is debt service, which in turn are the real profits of their investors.
Shareholders, by and large, don't actively participate in the company beyond buying or selling blocks of stock, yet they "earn" much more of a corporation's income than the people who actually create the value for the company. The fact that they pay a greatly reduced income tax because it is classed as capital gains is obscene.
Corporations are taxed on their net, on the profit, not the revenue. Income taxes on workers are on their gross income. If corporations had to pay 35% of their GROSS, or even 24%, they might have a legitimate gripe, but since the figure they are taxed on has already had the cost of doing business, every dime of every expense, including debt service, removed, that money has NOT been taxed, it was written off by the corporate "person", hence no double taxation when the Human Person pays CG.
Capital Gains is also a tax on net, not gross, so investors can not be faced with a tax bill that exceeds their margin (no gain, no tax), wage-earners often are.
Good points. Heck, I was listening to Larry freakin Kudlow talking about double taxation. Pick a CEO, any CEO, and the poor thing pays first on the money the corporation earns, then on his salary, and then on his stock option sales and dividends. It is, as you say, the shareholders who are double taxed. So, the CEO hires a CFO to come up with a brilliant scheme to take the profits offshore. On paper, the corporation is supposed to pay 35%, and the Kudlows scream it's more than anywhere else. Thus the corporation moves operations overseas and pays us no tax and provides no jobs.
It would be better to say we'll only charge a corporate rate of X% but demand they pay it, i.e., arrest them if they don't.
And your point about the net for the corporate tax versus the gross for a worker is a very good one.
The incentive for them to keep operations in this country ought to be trade agreements that bring the floor up. That is, if they want to sell into our market, they have to conform to US payscales, working conditions, environmental and product safety regs, et cetera, so there's no advantage to offshoring.
That would not prevent the companies from going overseas, but they would either raise the standard of living for their offshore workers or only sell into that offshore market, what's made in Asia is sold in Asia...
And the same standards should apply to foreign companies that are applied to runaway American firms, so Kia might have to bring it's level up, while BMW is probably already in compliance.
"..pays first on the money the corporation earns, then on his salary, and then on his stock option sales and dividends"
But even that isn't double taxation. The money the corporation earns is the Corporations' money, not the CEO's (no matter WHAT he thinks). His salary and dividends (and bonuses and perks...) are his regular income and that's taxed once. And the stock options are other money, separate from the Salary, and those are taxed as capital gains.
When they say double taxation, they are trying to claim that the Corporations' income IS the income of the Executives and Shareholders as if the Corporation was not a separate entity but was actually their collective presence. That once the Corporation has paid (or dodged) it's taxes then the people of that Corp should be tax free.
Nice try, no fly.
The greatest middle class the world has ever known was built when the top marginal tax rate was between 70-90%.
During WW2 Roosevelt cranked the top marginal rate up to 95% and even suggested moving it to 100%, thereby making a "Maximum Wage".
The fact is there's more wealth in our country than ever before.
All we need to do is find it, and TAX THE LIVING HELL OUT OF IT.
With the revenue raised we could EASILY have a single-payer healh care system covering all Americans, build a new green energy infrastructure and put every kid through college for free.
30 years of offshore hedge fund operations is dedicated to hiding America's wealth from America. Many of the rich in America are, by that method, 'freeloading' in this country. But, your absolutely right: there isn't a single problem facing America, from healthcare, to green energy, to climate change, to wars in Iraq and Afghanistan, to corporate influence in Washington, to Faux News propaganda, that wouldn't be solved by hiking progressive taxation levels back to where Eisenhower had them.
'Idle hands are the devils playground' has a sister saying: 'Idle wealth is the devils playground'. 30 years after Reagan, there's a LOT of idle wealth in America, and its been doing, basically, EVIL for 30 years now. It's hopelessly corrupted Washington DC, corrupted our so-called 'news media', corrupted our finance sector, and the worlds finances. Its UP TO NO GOOD. It would be better off taxed into our public sector and spent on roads, bridges, green energy, levies, parks, healthcare, poor people, etc, etc, etc. The money is there: put it to work. Quit, in the dazzle of 'free market' capitalism, insisting that its best, highest use is to let Paris Hilton decide on the Porche or the Lambourgini, or some other bloated ego decide on a sail or engine for his third yacht.
Absolutely, the whole point of capitalism is that capital creates the means to produce wealth for the good of us all. Capital has become detached from that purpose, which was used to justify its accumulation. It ain't even trickling down anymore. With what is euphemistically called the bailout, it is taxing the real economy instead of providing growth for it.
Well put: capital is trickling UP. Of course, it's defenders say its doing so in service to GLOBAL capitalism: your tax dollars are now supporting half-finished capital projects in Dubai, Thailand, Africa, India, and China. When those projects are finished in the long term, in a free market we'll all benefit. But, here's the kicker: 'in the long term'. And, as Keynes said: "in the long term, we are all dead" And here's the other joke: 'free market'. This is a horribly rigged market: you pay for globalization, and WallStreet reaps the harvest. See how that works? The best of all possible worlds...
ubrew12
"Of course, it's defenders say its doing so in service to GLOBAL capitalism: your tax dollars are now supporting half-finished capital projects in Dubai, Thailand, Africa, India, and China. When those projects are finished in the long term, in a free market we'll all benefit"
Here's the real kicker as I see it. Americans no longer are buying the Global Capitalism arrgument. Nor are they buying that they must compete with what amounts to slave labor in the third world any more.
You can feel the energy building, you can see bits and pieces of the rejection of big business, big government and the whole sordid betrayal of American workers.
They believe that like Henry Ford did, you must pay your worker's that $5.00 per day so they can buy your product. Henry would never have gone to cheap labor.
It's going to be an interesting 8 months.
Supposedly, Eugene V Debs toured Ford's plant and Henry, himself, took Debs around explaining the system to him. Ford was happy to point out the "labor saving" automatic machines that as he put it, "could do the work of ten men". By the end of the tour, Debs had heard the phrase so many times, he asked Ford if all those machines would be buying Ford cars.
Good comment, but history records Ford was right and Debs was wrong. Capitalism is a strange beast. Think of capitalism as the engine of a car: the car won't run without its engine. But, whoever ended a car with its engine? No place for a chassis? Seats? Lights, windows, glove compartment? And did you actually intend to place the passengers right there, on the engine?
There's a lot to society that isn't spending all its time wondering if the engine is working right. Unfortunately, a society is not as simple as a car. Here, you have WallStreet positioning itself just before the carbureator, saying 'if you don't take care of me FIRST, I'll shut the gas off to the engine, and you'll all stop dead' We should at LEAST recognize piracy when we see it. Ford would have.
A maximum wage, or even the 90% tax rate, was an acknowledgement that an individual's right to be rich has a limit. I always wonder at ball players who have to make 30 million instead of 25. Why? CAn you tell the difference? Nothing else (maybe other than the defense budget) is allowed to grow to the moon. I've never read the explicit argument made by earlier generations who limited wealth by taxation, but it has always seemed sensible to me that at some point rich doesn't need to be richer.
It becomes a competition among the already rich: that extra 5 million means a lot when the guy you hate is only making $25 million. Most 'capitalists' are highly competitive people and are constantly looking over to see what 'The Jones' are doing next door. Its a game, and the country at large needs to just tax these people, because the good their extra millions could do the country ISN'T A GAME. As regards universal healthcare, failure to interrupt their 'play' is quite literally killing 40,000 Americans every year. That's 40,000 families having their heart wrenched out because someone is playing a sophisticated version of 'who can urinate the farthest'. There's no question, though: capitalism harnesses that competitive drive, people will work pretty hard to be the 'farthest urinator' among their peers. You don't want to take it away, altogether.
But they aren't really working. They are just passing pieces of paper around and collecting fees for doing so. The derivative securities involved in the financial meltdown did not really provide anything except fees for sharks. The financial industry does not make things, it collects fees for nothing substantial.
One hundred or so years ago the robber barons were just as greedy by they produced steel, railroads, etc. What did Paulson do to make the incredible amounts he was given (not earned) at Goldman Sachs?
Well, now that explains why women make 78 cents to every male employee's dollar.....we just can't pee as far!~
You may enjoy this article on tax rates for the wealthy during the 20th century.
Shared Sacrifice, Shared Glory:
http://www.tompaine.com/articles/shared_sacrifice_shared_glory.php
Not to mention, Actual PROGRESS!
so many good explanations on why to tax the rich more, a LOT MORE.
we have to remember that OFTEN - those that are hurt in the long run , but support the system that gives the rich their welfare checks do not like "explanations"..but , just as they were/are sucked in by "simplistic" one-liners...they can and should also be kicked wide awake by equally strong one-liners, such as:
"TAXING the rich is not socialism...it is really just TAKING BACK what they STOLE to begin with"..
if people protest or ask about that:
simply say:
YOUR labor and that of millions others is worth FAR MORE than what the rich, the companies, the corporations, the banks, the US Government allows back to you...you weren't given in wages what every minute of human labor is REALLY worth..which is much, much more -- so that these rich folks, and their businesses can investments can skim THAT same thing you lost TO THEM .
TAXING THEM is the way to TAKE BACK what is OWED to you and your family. they DEPEND on YOU and others for labor to make things run for their wealth accumulation.
YOU - by supporting the tax cuts which YOU think benefits you - but is just the cover for the rich to get THEIR "tax cuts" countless times bigger than yours, you are really SUPPORTING the rich and putting THEM on welfare.
TAXING THEM is a way to make THEM PAY society for allowing them to get rich by using YOU and the labor of others.
but really -- the TITLE of the piece says it POWERFULLY.
"TAXING THE RICH...it's NOT socialism...it's CORRECTIVISM"...
that's the kind of line people need to be told.
so their attention can be FOCUSED on HOW --- regressive taxation is the how, among other things, such as suppressed wages, etc. -- hundreds of millions have been USED to enable a FeW to get rich.
I look at it a little differently. Rightwingers say that since capitalism is 'most efficient' in assigning value, clearly this efficiency applies to compensation as well. Bill Gates and Paris Hilton really ARE worth more, in an hour, than you are in a week (or year). They are worth more because capitalism says so: it is what they are getting paid for being a Gates and a Hilton, whereas the country is full of engineers, or cooks, or whatever you do. This is what rightwingers mean when they say they 'earned' their money. They worked, and capitalism put that together with what it says their work is worth, and they got paid.
Unfortunately, we don't live in capitalism, we live in America, a society of 300 million souls. And we DON'T ask capitalism what it thinks living in this society is worth. We are so adamant about NOT asking capitalism about our societal decisionmaking, that we invented an entire decisionmaking process, called democracy, to express our independence. That process DOES have something to say about wealth distribution (not compensation). And what it is saying is that high levels of wealth inequity aren't consistent with a vibrant community, society, democracy. The problem isn't the rich, its the filthy rich, people who need such poor returns on their investments (1% or so) to avoid working, that they are poor investors. The creation of so much 'idle wealth' is a pox on the society at large and is better used by appropriating it and giving it to the public sector to spend according to the dictates of our democracy. The DECISION to tax idle wealth and spend it on the commonwealth is NOT a decision left up to capitalism, but to DEMOCRACY. Hence, the 'fairness' of such appropriation is not an EVALUATION made by capitalism, BUT BY DEMOCRACY. 'Nothing is certain but death and taxes'. Taxes are always unfair, viewed from the point of the individual. But, since when was DEATH fair? They both happen, period. And the 'fairness' of taxes must be judged in the context in which taxes are made: in the commonwealth which organized itself as a democracy.
People have organized themselves against high taxes before and will again. It's important to note that, very often, these people still want to enjoy the same government services they enjoyed under high taxes. This is the best clue that they aren't viewing the 'fairness' of their taxes from the society point of view, but simply from their own selfish perspective. IE, they say they want 'small government', but they don't. As unfair as taxes may be, they aren't as unfair as rampant selfishness, as the Reagan legacy proves. It MAY be unfair to pay high taxes for your government services. But it is ABSOLUTELY unfair to pay high taxes for REAGAN'S government services: and that's exactly where this country is, thanks to the Reagan Revolution.
It is important to remember that only that income above the line (say we are using $3million) is taxed at the upper-most marginal tax rate. So if you earned say $5 million, the last $2 million would be the only part of your income taxed at this rate. And $250K per year is pretty comfortable for most families. Ask yourself this question, How many of my friends earn over a quarter-million a year? Do I really think that 90% of Americans will ever have to worry about being in the top bracket?
One reason that many major newspapers are still in print, despite the fact that they are losing money hand-over-fist is that their publishers are among the upper-bracket incomes, and would lose incredible amounts of money if the rates increased by only a few percentage points.
sl8ofhand
sl8ofhand....
you have made a SUPERB, BRILLIANT observation towards the end of your commentary:
how the upper class fund their media -- even with "losses" - since it can be thought of as "cost of doing business"...they have MORE money ELSEWHERE - and the print and other media that they keep alive, even with losses - BRING BACK TO THEM plenty of other "benefits" -- namely : to KEEP THE STATUS QUO in place, as they use the media they "keep alive" for propaganda, social control purposes.
in many ways -- you are very correct...the very rich and their class CAN afford the "losses" of keeping their media alive because the "dividends" - the keeping of the status quo, the control of framing the "national discussion" , the power to decide what is "normal" and "american" and "good"...
and of course what is "truth" - is well worth the "losses". cost of doing business.
but the REAL business is to KEEP the status quo - from which they get their REAL profits...and that is "STAY THE COURSE...CAPITALISM UNBRIDLED".
in other words - they can afford to "lose" money on their media - because they are profiting in much, much bigger ways elsewhere...which their "losing money" media promotes. they DON'T have to profit with their media, in reality. it is sufficient that they keep the CONTROL of the national discussion to protect where their TRUE profits lie...which is:
in all OTHER industries. the "losing money" media , is to them merely like the way a profiting businessman , who knows that by "losing" money on paying a few people to stand in the street corner to hand out flyers...he stands a good percentage, studied in advance, of getting "customers" who will be reeled in - for MUCH MORE PROFITABLE business.