The vast majority of Americans can’t afford to pay more [taxes]. Despite an economy that’s twice as large as it was thirty years ago, the bottom 90 percent are still stuck in the mud. If they’re employed they’re earning on average only about $280 more a year than thirty years ago, adjusted for inflation. That’s less than a 1 percent gain over more than a third of a century. (Families are doing somewhat better but that’s only because so many families now have to rely on two incomes.)
Yet even as their share of the nation’s total income has withered, the tax burden on the middle has grown. Today’s working and middle-class taxpayers are shelling out a bigger chunk of income in payroll taxes, sales taxes, and property taxes than thirty years ago.This is all very true. I explained here how the elitists in playing footsie with government get away with not following the rules that the rest of us are coerced into following. Reich thinks it can be different this time for his proposal:
It’s just the opposite for super rich.
Yes, the rich will find ways to avoid paying more taxes courtesy of clever accountants and tax attorneys. But this has always been the case regardless of where the tax rate is set. That’s why the government should aim high. (During the 1950s, when the top rate was 91 percent, the rich exploited loopholes and deductions that as a practical matter reduced the effective top rate 50 to 60 percent – still substantial by today’s standards.)Oh, yeah, Bob, just as I was thinking. Obama is going to tax Mark Zuckerberg, Jamie Dimon, Barbara Streisand, Oprah and Lloyd Blankfein on 90% of their incomes so that the rest of us can chill on unemployment payments that make Saudi sheiks look like paupers. Great idea, Bob.
And yes, some of the super rich will move their money to the Cayman Islands and other tax shelters. But paying taxes is a central obligation of citizenship, and those who take their money abroad in an effort to avoid paying American taxes should lose their American citizenship.
But don’t the super-rich have enough political power to kill any attempt to get them to pay their fair share? Only if we let them.
In truth Bob, I suspect that you know the real truth, that this time, like any other time, a tax increase would fall on the most productive members of society, who aren't schmoozing with the president, and on the middle class. Yeah, there will be the usual talk about "taxing the rich", but then it will be about taxing the rich and others "who can afford to help out their neighbors", and pretty soon the average shmo down the street has to start paying attention as to what side of the line he is going to fall on when politicians start talking about increasing taxes on "the rich".
Taxing the rich is a bad idea because it takes away from those who can afford to save and invest, which is what increases the standard of living for all of us. Taxing the rest of us is about taking money we can dearly put to use in other ways.
If your central planning mumbo jumbo is about "taxing the rich," running the money through D.C. and passing out what is left, please leave the rest of us out of this. Go talk to the elitists Zuckerberg, Dimon, Streisand, Oprah and Blankfein, about this. Those are the elitists that have the money and the access, get them to sign up for your nutty plan, leave the rest of us out , since we all know what happens when the "tax the rich" schemes start ratcheting downward to include more and more. Just work on Zuckerberg, Dimon, Streisand, Oprah and Blankfein, for starters. That should be your plan. And, hey, keep us posted on how it's working out. Let's us know, if they call their private security to bounce you out. Let us know, if they sic their dogs on you. Let us know if any of them start shooting.
The part about incomes not increasing over 30 years is all a lie. Whenever you hear liberals claim that, know that they're only talking about wage and salary data, and excluding benefit packages. When you include the benefits, total compensation has grown at the same pace as production.
ReplyDeleteJim Blanchard was the hero, no doubt about it.
ReplyDeleteLet me guess the "super rich" is anyone making more then $250,000/yr? What is very clear, and I can say this as a tax professional, this man does not understand the current tax code. Please Mr. Reich, send me some of the legal schemes that the Rich can deploy to shelter 50% of their income. I am sure others would like to know them as well.
ReplyDeleteI know a lot of very wealthy individuals that would love the return of the old '53 code pre TRA86. Back then my wealthy clients were able pay less then 18% on average on ordinary income thanks to the loopholes and provisions that only those with accumulated wealth could exploit. Those loop holes are long gone.
As Reich points out, there was a major amount of cheating under the old code by business and wealthy individuals under. But what he ignores is that the concept of the information returns (ie 1099s), computerized record keeping, electronic money and computer generated audits did not exist which made it was very difficult for the IRS to find income and assets. It was so tough, that the IRS use to do what was called a life style assessment where they would guess your income based on your lifestyle and calculate your tax liability. Many mob and drug lords went to jail based on these audits. Today, the IRS can find your income and assets virtually anywhere in the world with little effort. So a 90% tax rate will effectively be a 90% tax rate. Thus imposing such high tax rates, is moving into uncharted waters.
Lastly, what he completely ignores, like most '53 code loving regressives, is that the poorest person earning even a $1 of income, gave 20% of it to the government on top of other taxes. Of course, they conveniently ignore that aspect. They also ignore the fact that the bulk of the income taxes were paid by the middle class. Today the top 25% pay nearly all of the personal income taxes.
I don't get this notion that you "Owe" the government anything by dint of citizenship. The government, presumably, is there to provide law and order - a service. Now people are "obliged" to pay for the very dubious privilege of a government monopoly?
ReplyDeleteSorry for the misspelling, "Taxing the rich" should read "Taxing the Reich".
ReplyDelete