We already know how they gouge us with high prices, excessive interest rates, the cap on their Social Security taxes, taxpayer subsidies, hidden charges, low wages, etc. But there's other ways they bilk us too...by dodging income taxes. But don't "raise" taxes on the rich, just make them pay what they should have been paying all along...ever since 1921.
Besides hiring lobbyists to have Congress rig the tax code in their favor, the ultra-wealthy can also hire expensive tax attorneys to find "loopholes" - - and that's why our tax code is so complicated, and how the rich get off paying their fair share of taxes.
* The middle-class was actually doing their very best when taxes on the rich and corporations were at their highest levels ever (and the wealthy still prospered). Read my post: Tax Rates during the Fabulous Fifties (Remember when mom didn't have to go to work to help dad pay the mortgage?)
The current debate over payroll taxes:
The GOP wants to freeze federal wages and/or lay off more government workers to "pay" for
extending the payroll tax cut, instead of taxing people who EARN $1 million annually to
help offset the cost.
The Republicans have argued against that - - - they argued against taxing private and corporate jets (or cutting oil subsidies), and that even if we did tax the rich an additional 3.25%, it wouldn't be enough...and that's their argument, "It's not enough". So in other words, they don't want to tax them any more, at all, for any reason.
If a starving man needed a whole loaf of bread to cure his hunger pangs, but the GOP only had a single slice, they wouldn't give the starving man any bread at all!
If that's the GOP's best argument ("It's not enough"), then
tax them more! Read: Tax the Rich! In Fact, Let's Double Their Taxes!!!
by Richard (RJ) Eskow, Consultant, writer and Senior Fellow, Campaign for America's Future
They ultra-wealthy have already had their tax breaks for a decade now, and they haven't created more jobs. Just the opposite. They have either outsourced, cut wages and benefits, or laid off and downsized - - - but not created enough jobs; and all while they've been earning record profits and salaries. But yet, the Republicans still INSIST on calling them "job creators", when all they've created was more personal wealth for themselves.
And the GOP has also used all the other tired old arguments too...like "punishing success" or "waging class war" on people earning over $1 million a year (not millionaires per se, just those who "earn" that much annually).
Most people who earn an income of over $1 million a year are:
- Not small business owners
- Earn the bulk of their earnings with capital gains. This includes bankers, hedge-fund mangers, CEOs, and investors like Warren Buffett.
How the 1% Bilks the 99%
Stock buy-backs, stock-options, off-shore bank accounts, low capital gains taxes, and "prepaid forward” deals.
People who earn over $1 million a year aren't just paid a salary or weekly
paycheck (if at all), but have stock-options
and "variable prepaid forward contracts" (see the gray box at the
end of this post).
The tax rates are currently at historical lows, but I would suggest, don't "raise" taxes on the rich, but rather just tax them according to their current marginal rate (over $1 million a year in personal earnings would put them in the top income bracket with a tax rate of 35%).
The top 1% pays 70% of all capital gains taxes. Instead of slapping a 3.25% "surtax" on incomes above $1 million, just tax capital gains as “regular” income (which is 35% for the top marginal income earners). Right now they're only paying 15% for capital gains taxes (a rate they have not seen since 1921, when capital gains were once taxed at 12.5%).
Before 1921, capital gains were taxed as "regular" income. Why did that change? That is money going into people's pockets, not into a corporate treasury for expansion and business growth (and creating more jobs).
CEOs only “earn” bonuses when their company “performs.” One measure of that performance: “earnings per share,” or company
income divided by outstanding shares of stock. Execs have figured out that they don't have to actually boost earnings to hit their
per-share targets. They simply reduce the number of company shares — by having their companies “buy back” shares of their own
stock off the open market. U.S. corporations overall have so far this year authorized $445 billion worth of buybacks.
The CEO and board of directors puts this cash into a bonus pool and pays themselves with stock options and pays a capital gains tax of only 15% after they're vested and sells after one year.
Herman Cain's want to lower the capital gain tax that these CEOs pay on those stock options from 15% to 9%. Newt Gingrich and others wants it to be 0%. That's how they escape paying the top marginal rate of 35% over $376,000.
That's why Warren Buffett's secretary pays more in taxes as a percentage of her earnings than Warren does. And with corporations only paying an average effective corporate tax of 18% (and NOT 35%) they can afford to back more stocks from their profits and pay themselves more, and pays a less effective income tax rate than the rest of us.
U.S. Obtains Data From 10 Swiss Banks In Tax-Dodging Probe
(September 10, 2011) - Switzerland, a noted tax haven that is the global capital of offshore private banking, has been under attack from U.S. Justice Department and Internal Revenue Service officials conducting a broad criminal investigation into private banking services that U.S. authorities say enabled wealthy Americans to evade billions of dollars in taxes.
More GOP Propaganda
[Fox News] pollster Frank Luntz giving advice to the Republican Governor’s Association:
Luntz told Republicans to re-frame the concept of the bonus payment — which bailed-out Wall Street doles out to its employees during holidays — as “pay for performance” instead.
– Don’t Mention The Middle Class Because Americans Don’t Trust Republicans To Defend It: “They cannot win if the fight is on hardworking taxpayers,” Luntz instructed the audience. “We can say we defend the ‘middle class’ and the public will say, I’m not sure about that. But defending ‘hardworking taxpayers’ and Republicans have the advantage.”
– Don’t Talk About Taxing The Rich: Luntz reminded Republicans that Americans actually do want to tax the rich, so he recommended they instead say that the government “takes from the rich.”
Also see my post: Republicans Use Psychology to Promote Fear
My Related Posts:
- Subsidies for the Rich and Famous
- Historical Tax Rates on the Rich (1862 to 2011)
- The Second Gilded Age: History Repeats Itself
- Mellon: The Banker Who Rigged the U.S. Tax Code
- The GOP Tax Plan - Ignorance, Insanity, or Greed?
- We have a Revenue Problem, Not A Spending Problem
- 280 Corporations are "Too Big to Tax"
- Trickle-Down Economics: The Cruel 30-Year Hoax
- You Pay Hidden Entitlements for the Rich
- Record Profits + Record Bonuses = Zero Jobs
- Low Wages Kills Jobs, Not High Taxes
Other Related Articles
- "The richest 1 percent have more financial wealth than the bottom 95 percent combined."
- The total net worth on the Forbes 400 List marks $1.5 Trillion in 2011
- The Global Super-Rich Stash: Now $25 Trillion
- Historical Tax Rates and Time-line
- Capital gains from Citizens for Tax Justice
- 1977 - 2007 tax rates from U.S. Treasury
- Economic Policy Institute on capital gains taxes
- Capital gains explained from U.S. Internal Revenue Service
- The great corporate tax scam