Fair Taxation Means More Brackets Up Top
Originally published by OtherWords.
So many governors are hammering their budgets with a “we’re broke” message these days that it’s amazing our country hasn’t shattered into a thousand separate islands. More and more, however, rational voices are correctly asserting that we’re not broke.
The problem isn’t that the United States is out of money. It’s that a tiny sliver of households are under-taxed. The richest 10 percent of Americans own almost three-fourths of the country’s total wealth. Astoundingly, the most affluent 1 percent of Americans own more than one-third of our total wealth.
Thankfully, the message that our country isn't broke is making its way closer to the center of the tax and deficit debates. It can’t get there soon enough.
Many Republican lawmakers, along with governors like Wisconsin's Scott Walker and Ohio's John Kasich, bizarrely think that they can erase deficits with tens of billions of dollars in budget cuts and tax breaks for corporations and wealthy people who don’t need them. They’re ignoring the greatest economic returns available, which are provided by public investments, federal aid to states, and even unemployment benefits. Instead of helping save the middle class, they're propelling us toward a busted, plutocratic disaster.
The GOP's deficit obsession isn't just misguided. It turns a blind eye on the struggles of low- and middle-income Americans. In contrast, Rep. Jan Schakowsky’s sensible Fairness in Taxation Act would raise taxes on millionaires and billionaires, which better serves the American majority.
Currently, families earning $374,000 pay the exact same federal income tax rates as families with multi-million-dollar incomes, or even the handful who earn a billion bucks every year, such as the heirs of Walmart's founder. The lifestyles of the ultra-wealthy wouldn’t change in the least if they had to pay moderately higher income taxes. And it would boost our national economy.
The Fairness in Taxation Act calls for establishing five new tax brackets for incomes between $1 million and $1 billion, with rates ranging from 45 percent to 49 percent.
The Illinois Democrat's bill would also address an absurd aspect of our tax system, which wrongly favors wealth over work. Today, money earned through working nine-to-five or the graveyard shift is taxed at a higher rate than money obtained through windfalls. Capital gains, dividends, and other investment income derived from pre-existing wealth shouldn't be taxed at rates lower than income earned through work.
Three-quarters of all stocks and mutual funds owned by U.S. taxpayers belong to the richest 10 percent of American households. Therefore, some of the most affluent Americans actually pay lower effective tax rates than many middle-class Americans.
Take, for example, a weasel like Lloyd Blankfein, CEO of Goldman Sachs. He raked in just over $13 million in 2010 (excluding his bonus of some $12 million worth of shares in his company). Of that $13 million, only his base salary of $600,000 will be taxed according to the federal income tax rates. The remaining $12.4 million will be taxed at a top rate of 15 percent. Unfortunately, Blankfein is just one example of the kind of gross inequity that exists in the current tax system.
A century ago, tax policies adopted during President Teddy Roosevelt's administration were guided by sound principles that stand in direct contrast to those of today’s Republicans.
“No man should receive a dollar unless that dollar has been fairly earned,” explained Roosevelt in a 1910 speech. “Every dollar received should represent a dollar's worth of service rendered--not gambling in stocks…I believe in a graduated income tax on big fortunes."
The Fairness in Taxation Act takes aim at the same inequities Teddy Roosevelt--a Republican--identified long ago. If it were enacted this year, it would generate $78 billion that could fund jobs and social programs that Americans need now more than ever.
Repeat after me: we're not broke. It’s time to mandate that the wealthiest members of our communities share in the sacrifice of the economic recovery and pay their fair share. The Fairness in Taxation Act offers a clear path in that direction.
new brackets
Yes, but much steeper gradation. Past, say, a couple of million dollars, it should step much higher. Billionaires should be in the 80's or 90's.
Polls on the top 2%
I was pleasantly stunned to read that sixty-four percent of our top income bracket support higher taxes on themselves--or at least on the millionaires and billionaires. If a majority of them support higher taxes on themselves and recognize the necessity for that--well, what's their excuse? Why haven't they gotten their asses together and organize against the reverse Robin Hoods among them?! They might even be recognized as shining examples of citizenship; for that we yet revere the memory of the Roosevelts and the Kennedys! Both wealthy families; yet they acted selflessly and bravely for the good of all!
From a Kennedy Democrat...
It was Kennedy who said a rising tide lifts all boats. The dream in America is to make the poor rich, not the rich poor. It seems there is such an extreme dislike for wealth and rich people within this "movement." Last time I checked, I have never been hired by a poor person and I have never seen a country taxed into prosperity.
Fairness is not a synonym for socialism
Liberals do not own the definiton of fairness
Fairness in paying for government provided goods and services is not different than it is in paying for private sector goods and services - on a user fee basis.
And no one's income level is a "service" provided to them by the federal government.
McDonal's can't make one customer pay for another's hamburger. Lowes can't make one customer pay for another customer's lawn mower. If it's not fair in the private sector, it's not fair in the government sector either.
You completely ignore the fact that coroprate income is double taxed. That is the rationale for the lower rates at the individual level. The cash paid out for taxes at the corporate level belongs to the stockholders just as all the other assets of the corporation do. That counts as the shareholder paying it just as much as if they paid it themselves. Furthermore, the cost basis of investments is not indexed for inflation when calculating capital gains. The tax brackets for wage income IS indexed for inflation every year. And capital loss deductions are limited to $3,000 per year while any capital gains are fully included in income in the year they occur.
The top 50% of income earners already pay 97% of the federal income taxes collected. They certainly aren't getting 97% of the value of federal government services in exchange for their money. Almost half the people in the country don't pay any federal income taxes. They certainly ARE receiving government services. They should be paying for them.
The tax code needs to be changed all right but not in the way you people want.
The income tax should be scrapped altogther and replaced with a national sales tax.
And the scope of what government is involved in should be drastically reduced - including transforming and eventually phasing out the so-called "entitlement" programs.
It has never been any legitimate business of the federal government what the distribution of wealth is. And it certainly isn't any of it's business to be deliberately trying to redistribute it.
Re: Fairness is not a synonym for socialism
There are many reasons why a fee for service government is a terrible idea. The most basic point is that government services should not be available only to those who can afford them. There are already too many fee for service aspects to government. In a functioning society, and individuals access to government should not be limited to by their ability to pay for it.
Additionally, what remains of the progressivity of the federal income tax is largely offset by the regressivity of other taxes including payroll taxes, state taxes, local taxes, and yes, fees.
"There are many reasons why a
"There are many reasons why a fee for service government is a terrible idea. "
I haven't heard so much as a single valid one yet.
"most basic point is that government services should not be available only to those who can afford them"
Wrong. Such notions are predicated on the idea of affirmative rights. There is no such thing as affirmative rights.
All Constitutional rights are negative rights. You have the right to be left alone by the government unless you actively do something to harm somebody else.
No one has a "right" to receive anything from anybody for any reason ever. No one has an obligation to do anything for anybody for any reason ever.
Those who wish to voluntarily help someone else is perfectly free to do so. Government has no authority to mandate charity from one citizen to another.
As James Madison, the father of the Constitution said:
"I cannot undertake to lay my finger on that article of the Constitution which granted a right to Congress of expending, on objects of benevolence, the money of their constituents.”
fair tax
If the top 50% pay 97% of taxes then this seems unfair to the top 50%. Why doesn't everyone just pay the same amount? one person, one buck. Clearly government would go away and the wealthy can protect themselves. The wealthy could and should provide all the education, cradle to grave, of their employees. The wealthy can provide for themselves all the infrastructure they require for their enterprises. This way we could actually have self made men!
Clearly government would NOT
Clearly government would NOT go away without the federal income tax at all.
The country operated quite sufficiently without one at all until the 16th amendment was passed in 1913.
That is 126 years since the Constitution ratification in 1787 to 1913 that the nation managed to get by without a national income tax.
"The wealthy could and should provide all the education, cradle to grave, of their employees. The wealthy can provide for themselves all the infrastructure they require for their enterprises. This way we could actually have self made men!"
No, we can charge out government services on a user fee basis. The roads are already paid for by user fee gas taxes, That's a good model for everything else.
And we already do have self made men (and women). Liberals are always trying to denigrate people's accomplishments as part of their rationalization for wanting to confiscate their wealth. They want to attribute it to "infrastructure" or anything other than the individuals own efforts and abilities. The "infrastructure" never caused anybody to get rich. It is there for everyone to use.
That is like saying a winning NASCAR driver should be required to pay higher race entrance fees to the track owner because somehow the racetrack "caused" him to win the race. It's an absurd notion. Everybody in the race was running on the same track. It had nothing to do with causing anyone to win the race.
That is like saying a winning
That is like saying a winning NASCAR driver should be required to pay higher race entrance fees to the track owner because somehow the racetrack "caused" him to win the race. It's an absurd notion. Everybody in the race was running on the same track. It had nothing to do with causing anyone to win the race.
Most of the time they do since the usually winners pump tons more money into it than the smaller teams with no sponsor and we all know how entertaining it is to guess which one of the two or three teams that "have" will win this week, or similarly, whether it will be the Red Sox or the Yankees in the world series.
"Most of the time they do
"Most of the time they do since the usually winners pump tons more money into it than the smaller teams with no sponsor "
Whcih is irrelevant to the point.
The racetrack itself is analogous to the government. Drivers having better teams and resources have nothing to do with the racetrack. It isn't the business of the racetrack to "redistribute" resources to make it "more fair".
And it isn't the business of government to redistrbute wealth to make it "more fair" either. Government should only be charging me for the specific services it is providing to me calculated on a user fee basis. My income or wealth level is not a "service" the government has provided to me.