Why not tax America's rich?
Posted on Monday, April 18, 2011 at 09:52 AM
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I know what you're thinking: the top income tax rate is 35 percent, so how can people who make so much pay so little in taxes?
Well, the nation's tax laws are packed with breaks for people at every income level - but the rich have access to vastly more significant tax breaks than people with lower incomes. In America, after all, the amount of taxes you pay is often determined by the kind of accountant you can afford.
Are you aware that the top one percent’s share of our national income has doubled over the past three decades (from 10 percent in 1981 to well over 20 percent now)? It's the best time ever to be a plutocrat. For people at the top America is not broke, America's tax code is.
And the richest one-tenth of one percent’s share of the bonanza has actually tripled. They're doing better than ever, thank you very much. In the midst of the Great Recession they're making money to burn.
None of this will concern you if you think it's reasonable for someone rolling in cash to pay one percent or flat nothing of their annual income in tax. But for for the rest of us who also have Medicare and Social Security to pay into it quickly starts to chafe.
President Obama is correct in discerning that an effective way for America to reduce its the long-term budget deficit, protect Social Security and Medicare, invest in the nations education and infrastructure and not raise taxes on the working middle class - is by raising taxes on the super rich.
It's hard to remember now because the Reagan era did such a good job of turning our society upside down, but from the 1940's until 1980 the top tax income tax rate on the highest earners in America was at least 70 percent.
In the 1950's it was actually 91 percent. Today it’s 35 percent. The rich are paying a much lower share of their incomes in taxes now than at any time since World War II.
A final word. If Americas rich were taxed at the rates they paid half a century ago, they’d be paying in over $350 billion more this year alone. That would very quickly become sufficient to accomplish every major target the nation has set for itself while also reducing future deficits. Imagine what a boon that would be.
Everything connects: the bonanza being enjoyed by America’s super-rich is directly related to the drop in their tax rates - and as they prosper the public purse empties, so the nation faces devastating budget squeezes and the slashing of vital public services for the middle class and the poor.
Of course money doesn't grow on trees, but nor does it trickle down from rich men's pockets. But paying taxes is an obligation of citizenship, or it once was. If the rich want to escape their obligations to this nation or take their money abroad the better to hide it they should also lose their right to call themselves American citizens.
Some of them agree. As many as 743 Americans took just that drastic and irreversible step to surrender their passports last year - that's three times as many as in 2008.
Money meant more to them that their citizenship, apparently. What does that tell you about the patriotism and loyalty of America's superrich?