67
The rich don't control Washington
To view this content, Javascript must be enabled and Adobe Flash Player must be installed.
Contrary to popular wisdom, the rich don't control Washington. The poor and the middle-class do.
This will surprise most Americans. We've been conditioned to believe that Washington is a den of corruption, overrun by well-paid lobbyists, and lawyers who manipulate government policies to favor the rich and corporate interests. Ordinary Americans don't stand a chance against this juggernaut.
But look at what the government actually does, and a completely different picture emerges.
Ron Haskins, a scholar at the Brookings Institution, recently presented some fascinating figures on government spending. From 1980 to 2011, yearly outlays for the 10 largest programs for the poor went from $126 billion to $626 billion in inflation adjusted dollars.
Then there are the programs aimed primarily at the middle-class. The biggest, of course, are Social Security and Medicare. Put together, all these programs accounted for almost 60 percent of total federal spending in 2011.
Meanwhile, what about the rich and well-to-do? Well, they're paying for almost all of that spending. According to the Congressional Budget Office, the richest fifth of Americans pay nearly 70 percent of all federal taxes.
The point is not that the rich are victims. Their lawyers and lobbyists often do secure beneficial tax breaks, subsidies and regulatory preferences. But focusing mainly on these victories distorts our picture of government.
Our problem is not that the rich have taken over government. Our problem is that politicians, on the left and right, are doling out money to everyone -- particularly the poor and middle-class. That's why our budget deficits are so huge and so intractable.
Pages
I have just posted a petition to the we the people web site. please go sign this it needs 150 signatures to be publicly viewed. This is a site set up by the white house to hear the people concerns. If we can get enough support they will have to address the issue. thank you here is the link. Let's get Audit the Fed Bill through the Senate!!! :)
http://wh.gov/9J3X
So much intellectual dishonesty (from the elision of the funding sources of SS and Medicare, to the lumping together of the top 0.5% and the next 19.5% as, presumably, "rich"), and slight-of-hand densely packed into this piece from Samuelson, that it is truly difficult to unpack--and it should never have been run in the first place. Call me old fashioned, but some forms of expression are so deceptive and intellectually manipulative that they simply do NOT deserve to be given a hearing by a program that aims to inform and improve the discourse--certainly not without offering an on-air rebuttal. The fact that this came from a "respected" ostensibly "mainstream" voice made it no better--in fact worse. It is these voices of the conventional wisdom and "centrism" that are most guilty of perpetuating and legitimizing the pernicious misinformation that poisons attempts to reach consensus and make good policy. I was listening to the show and took a mental note to write in, and I'm glad to see that others did so before me.
1) Social Security pays for itself. There's this thing called FICA, and every penny of Social Security is funded by it. And not's considered "income tax."So to say that "the rich" pay for Social Security is just false.
2) Medicare is mostly funded by payroll taxes, but last year about $205 billion came from general revenues. That's out of a federal budget of $3.7 trillion.
So the two programs that Samuelson identifies are funded mostly by transfers from some middle-class people to other middle-class people.
Remember also that Medicare payments don't go to the beneficiaries = they go to hospitals and doctors. The reason Medicare needs to be funded from general revenues is that we waste money on health care. If we paid what other industrialized countries paid for health care, we wouldn't have a budget deficit.
The poor and lower-middle class may not pay much income tax, but they do pay the disproportionate burden in Social Security, Medicare, excise, and sales taxes. And remember; the Social Security fund is being plundered and replaced with debts in order to pay for wars (largely to benefit oil companies and war contractors) and bank bailouts (to cover their unregulated bad bets). There is no reason the rich should be excluded from paying the same percentage into its fund; but SS wages are not taxed after the first $106k.
The income tax brackets are not progressive in the US as one's income surpasses the middle-class zone. In fact, the only real progressive tax-rate increases happen right at the sweet spot as one begins to earn middle-class wages. It's almost like a barrier to entry to the upper class.
The tax rates flatten out as one begins to earn "wealthy" amounts and become regressive as one begins to draw more money from capital gains than earned income. A small business owner will end up paying a much higher tax burden, in terms of percentages, than a wealthy financier, by an astronomical margin.
As soon as one begins to make ends meet and live comfortably (but by no means wealthy) in today's dollar-hungry economy, the IRS sticks its hand out and you find yourself once again in debt.
The truly wealthy will have done an end-run on their tax problem by setting up corporations to shield them from earned-income taxes. The schlubs in the middle class do not have this sophistication and do not know how to take advantage of the many loopholes set up for the rich and for corporations.
The richest corporations in the US are paying much less than a typical citizen in taxes.
New York Times says:
(GE): The company reported worldwide profits of $14.2 billion, and said $5.1 billion of the total came from its operations in the United States. Its American tax bill? None. In fact, G.E. claimed a tax benefit of $3.2 billion.
Exxon Mobil paid zero dollars in 2009 after making record profits. This year they are slated to pay about 17 percent; still less than a typical middle-class wage earner.
"Maybe you didnt read correctly, but 20% of the people already pay 70% of the taxes. That means that a small percentage of the people are funding just about all of the government."
Dear so called independentmind, we not only able to read correctly, but actually are knowledgeable. Dear friend, why don't you learn how the rich become rich, familiarize yourself with such concepts as "exploitation" and its possible consequences (reading French history of the 18th century or Russian of the 20th century could be helpful)
dr anna
Dr Anna, this isnt 18th century France... most people in this country get rich via a simple formula... they work for it. They go to school, study, get a job, take risks, make good decisions ... they dont slack off and whine about being taken advantage of
So, the top 10% possess 80% of all financial assets and the top 20% are complaining that they pay 70% of the taxes? Where's my little violin...
Typical conservative deception as well to paint Social Security and Medicare as if they come out of income tax dollars rather than their own trusts. If you go back and look at budget reports from the 60's/70's they don't even report SS and Medicare as part of the budget because they're not. All of us pay for those and it's capped just above 100K so the fabulously wealthy don't pay 70% of SS or Medicare.
If we want fair, how about if Mitt pays the same rate I do? Proof positive that the rich control the government because they vote themselves these tax rates.
How about if ExxonMobile and GE kick in something other than $0? I read that ExxonMobile paid $13B in taxes last year to other countries but $0 to the US. Look at the percentage of the budget funded by corporate taxes under Eisenhower vs. today. The tax burden has been shifted from companies to individuals.
And I don't buy independentMind's Ayn Rand argument for a second. How many people are working 2 jobs to get by while the CEOs sit around and take credit for everyone else's work? The CEO works 700x more than the guy working 2 jobs? Please!
The tax system in this country is highly progressive. The top one percent pay more tax revenue than the bottom 95% combined. Their average tax rate is 27%. Roughly 47% of US households pay zero federal income tax. Face the facts that the rich fund most of our federal government. When you consume federally funded goods and services, thank a rich person.
BTW: The Buffett rule is misguided. Most folks don't include the 35% corporate income tax that is usurped prior to the additional 15% taken when distributed as capital gains or dividends. That turns out to be nearly 45% in total. Remember, corporations are owned by people, managed by people, employ people and sell goods and services to people. The only difference is the fractional ownership part (i.e., shareholders). When you tax corporations, you tax people.
So, here’s my rebuttel:
When you’re talking about the poor and the middle class, you’re talking about 90% or more of the people in society. That’s not a “special interest” group. There’s nothing “special” about the interests of that group. That, ladies and gentlemen, is called “our society.” Let me put it another way. Remember how this is a government “of the people, by the people and for the people?” Well, guess what. That 90% -- that’s those “people” the constitution was talking about. That’s what that whole democratic experiment was for – so that the government served “the people” and not just a few aristocrats at the top who had an audience with the king.
Make no mistake, when you’re calling 90% of the population a “special interest,” you need to stop, drop, pay your fair share of taxes just like the rest of us – and count yourself lucky that you’re in a country that gave you the opportunities you have. And, poor and middle class people – next time someone who made a nice fortune in this country tries to convince you that you’re the special interest, take another look at our constitution. And remember that you’re the people.
Pages
