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Raise taxes on the rich
Robert Reich
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Bob Moon: We keep hearing about how much we can't afford and what programs we need to cut to rein in the federal deficit. But there could be two edges to the budget knife.
Commentator Robert Reich wonders why one agenda item seems to be missing from the conversation.
Robert Reich: As Americans get ready to file their taxes, politicians are battling over how much to cut government spending in order to reduce huge deficits. Curiously though, one option for deficit reduction seems to be off the table. That's to raise taxes on the very rich.
For decades now, America's top earners have been pulling in a larger and larger share of the nation's total income. Over the same period though, their tax rates have steadily declined. In the 1950s, the top marginal income tax rate was 91 percent. Now it's 35 percent. Even when you include deductions and credits, the super-rich are now paying a far lower portion of their incomes in taxes than at any time since World War II.
Meanwhile, capital gains and dividends -- a big chunk of their income -- were taxed at 35 percent as recently as the late 1980s. Now, they're taxed at 15 percent. And the estate tax has now vanished for estates under $5 million or $10 million a couple.
If the rich were taxed at the same rates they were taxed a half century ago, they'd be paying some $350 billion more this year in federal taxes. That would be trillions of dollars over the next decade -- a major contribution to eliminating the deficit.
Now yes, of course, clever accountants and tax lawyers would find ways around any tax increases, but this was always the case.
The real difference between now and then is the political power of the super-rich is much greater. After all, that's why their tax rates are so much lower.
But it's just possible that the devastating budget squeezes in Washington and in state capitals, and the slashing of public services vital to the middle class and the poor, may prompt Americans to look back 50 years -- and ask why the super-rich shouldn't pay the same tax rates now as they did then.
Moon: Robert Reich was Labor Secretary for President Clinton. His most recent book is called "Aftershock: The Next Economy and America's Future." Next week, David Frum. And in the meantime, you can always throw your two cents into the budget debate -- click on this contact link to let us know what you think.
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Mr. Reich claims taxing the rich at previous rates will provide $350 billion dollars in revenues this year (trillions in years to come) that will help diminish the federal debt.
However, in the very next sentence, he admits that a clever accountant or tax lawyer can get around paying any increase in taxes.
Mr. Reich, who do you think is best able to afford and most likely to hire clever accountants and tax lawyers? Busboys and taxi drivers? Waitresses and file clerks? Teachers and police officers? (well okay, teachers and cops probably can.)
This is the shining example of why the government shouldn't get our money. People like Reich make arguments and balance sheets based on speculative dollars, as if anyone besides the schmuck filing a 1040EZ form was going to be paying the going rate. then they promptly use those inflated hypothetical figures to create agencies by the dozens with costs far beyond the anticipated revenue imagined.
I'll believe Mr. Reich has the solution when he shows his 2011 tax form that wan't prepared by a high-priced accountant with the goal of getting every deduction possible.
I am a retired CPA from Newport Beach, California. I was fortunate to have many very wealthy clients. Over time, I said to each one, "You make, and have, a lot of money. There is no reason for you to fear not having enough. So, what is it that you want?" In almost every case, their answer was. "I want more."
Lambert and Brinkley have to go back to elementary school and study civics. They do not understand "society" or "the social contract." Nor do they have an iota of compassion for those Americans who may have less than they do. We ought to have better government, GOOD GOVERNMENT. Not less. If society and its government, its Constitution, evolves--as we ought to expect any free, independent, and progressive, organic entity to do--then we should also expect our Republic to evolve--AND include a greater number of its citizens under its protection. I doubt that "aggressive" hard-assed capitalism ought to the inclusive, compassionate goal --of Life, Liberty, and the Pursuit of Happiness--that we would wish for "My Fellow Americans." It's time for the two of you to go Enlightenment School and come out from under that dirty rock that you and your ilk live beneath.
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Robert Reich is a complete idiot, the answer is not to raise taxes on anyone, the government needs to STOP spending money like it grows on trees, the government waste is the problem, but it is much easier to raise the taxes than to work on cutting out all the waste. The shame is that us in the private sector are the ones under attack, we flip the bill for this country and we continue to get screwed and so many just turn a deaf ear to it, the private sector in this country needs to wake up, as we are 90% of the voters, that is the only way things get fixed. just saying
My dear Richsrd D. Brinkley 04/11/2011: Let's "cut to the chase" and just eliminate the United States government. Do we even need a Constitution? Let's incorporate -- or privatize -- everything that we possibly can. Why shouldn't the USA be simply "USA, Inc." Imagine! If there were no government, corporations would build the roads, bridges, etc., that they need to transport their goods. There'd be no taxes. Only bills from corporate entities that provide "services" like water and sewer and police, etc. I'd be heaven. A land without government. There'd be no Regulatory depts. because corporations and USA Corp. would do "for profit" what the government today does for "free," and that'd create jobs instead of the dole. Republicans have begun to dismantle the USA. Leaders like you can bring us the rest of the way out of our present morass. Bring it on!
Mr. Reich stated that Republicans are setting the agenda for massive spending cuts that will hurt most Americans. How can letting Americans keep and spend their own money hurt them? Mr. Reich makes little sense.
Mr. Reich advocates taxing the so-called super-rich. This is not a strategy but a tactic to divide and conquer. Even if the so-called super-rich were taxed at 100% of their incomes it would not even come close to paying Obama's accumulated deficits. Mr. Reich admitted as much in the his following paragraph.
Mr. Reich wrote that the vast majority of Americans cannot afford to pay more [taxes]. I agree. The vast majority of Americans cannot afford to pay more when the bottom half of Americans only pay 3% of income taxes. The answer: cut spending.
Mr. Reich further wrote that today's working and middle class (as if there is a difference) are shelling out a bigger chunk of income in payroll taxes, sales taxes and property taxes. Mr. Reich forgot to mention the Alternative Minimum Tax, a creation of progressive-socialist Democrats, that is attaching millions more from middle class Americans than ever. I wonder why he forgot to mention such an insidious tax?
Mr. Reich wrote that "the top 1 percent's share of national income has doubled over the past three decades (from 10 percent in 1981 to 20 percent now). The richest one-tenth of 1 percent's share has tripled. And they're doing better than ever. According to a new analysis by the Wall Street Journal, total compensation and benefits at publicly trraded Wall Street banks and securities firms hit a record in 2010 - $135 billion. That's up 5.7 percent from 2009. What Mr. Reich does not mention is the top 1 percent are paying more in taxes. Plus mixing the top 1 percent of individual filerss with total compensation and benefits at Wall Street banks and securities firms is a non sequitor.
In the next paragraph, Mr. Reich wrote that taxes on the top have plummeted. Yet he uses tax rates not tax revenue to support his allegation: another non sequitor.
Mr. Reich wrote that "The estae tax (which only hits the top 2 percent) has also been slashed. In 2000 it was 55 percent and kicked in after $1 million. Today it's 35 percent and kicks in at $5 million. Capital gains - comprising most of the income of the super-rich - were taxed at 35 percent in the late 1980s. Now they're taxed at 15 percent." Mr. Reich is confusing apples and oranges. The top 2 percent refers to those whose income is in the top 2 percent. The state tax does not tax income but accumulated wealth, and the esate tax can hit more than half of all tax filers.
Then Mr. Reich states that if the "rich were taxed at the same rates they were half a century ago, they'd be paying in over $350 billion more this year alone, which translates into trillions over the next decade. . ." $350 billion times ten years is $3.5 trillion, which fails to erase the $5 trillion in Obama deficits. Is this Mr. reich's new math?
Then Mr. Reich says cutting what we don't need will save billions. I agree. Let's start cutting foreign aid, Planmned Parenthood, NPR, EPA, Department of Energy, Department of Eduaction, Department of Agriculture, Department of the Interior, Department of Labor, Department of Transportation, and at least half of HHS.
Mr. Reich then advocates higher tax rates. This advocacy demonstrates how pro-socilaist and un-American he really is: the government needs more money . . .screw the people.
And tell me, Mr. Reich, where in the United States Constitution does it say paying taxes is a central obligation of citizenship? Why don't you just declare war on the American people? I forgot. You already have by making almost half the people dependent on government handouts.
Bloomberg Business Week's newest issue exposes the true cultural values of America's Ivory Tower Aristocracy in "Opening Remarks - Extreme Makeover."
As Ike warned America in his 1961 Farewell Address, the "power of money" dominates the nation's scholars just like politicians and all other failures in institutional leadership that have been selling out America and humanity for far too long.
The #1 fact far too many fail to acknowledge is that the rich control Washington, the rich can buy all the politicians they need to get their way.
The rich, like college professors, marginalize the public with impunity, until a calamity happens.
Andrew Lechter wrote:
"why do liberals always cite the percentage of wealth held by the 'top 1%' but never the percentage of taxes paid by them. How about 40%, which was more than paid by the bottom 95%?"
Andrew, the richest 1% of households own about 42% of the wealth. Perhaps that's why they pay about 40% of the taxes. Duh.
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