Reich writes: "The major issue decided in last week's election was that the rich should pay more. So, presumably, that $1.6 trillion should come out of the pockets of the wealthiest Americans."
Portrait, Robert Reich, 08/16/09. (photo: Perian Flaherty)
Raising Taxes on the Rich
16 November 12
The President's Opening Bid on the Grand Bargain (III): The Difference Between "Broadening the Tax Base" and Raising Taxes on the Rich
he President says he wants $1.6 trillion in tax hikes. Republicans say they won't raise tax rates but might be willing to close some loopholes and limit some deductions and tax credits. Is compromise in the air?
Not a chance. True enough, such "base broadening," as Republicans like to call it, could conceivably generate $1.6 trillion in additional tax revenues over the next decade.
But, wait. Didn't the President just win a second term? The major issue decided in last week's election was that the rich should pay more. So, presumably, that $1.6 trillion should come out of the pockets of the wealthiest Americans.
"Broadening the base" has nothing whatever to do with the rich paying more. That's because a lot of tax credits and deductions help the middle class and the poor.
If we end the Earned Income Tax Credit, for example, some of the poorest Americans will end up sacrificing. That tab was $63 billion last year.
Or if the "loophole" is tax-free employee health care, or the home mortgage tax deduction, or tax-deferred 401K accounts, most of the added tax revenues will come out of the pockets of the middle class.
So when Republicans talk about "broadening the base," watch your wallets. Now that the President has set his goal on $1.6 trillion in additional taxes, the question is whether the rich are going to cough up $1.6 trillion more.
There's no way that $1.6 trillion can come out of the pockets of the wealthy merely by capping the deductions the wealthy take advantage of.
If Republicans won't budge on raising tax rates but insist on broadening the base, Democrats should take aim at the biggest tax loophole of all for America's wealthy: the preference for capital gains.
Capital gains are now taxed at only 15 percent (the major reason Mitt Romney pays a rate of under 14 percent on over $20 million of annual income). Capital gains should be taxed the same as ordinary income. That way, under a progressive tax system, the wealthy would pay far more - on the way to $1.6 trillion.
Robert B. Reich, Chancellor's Professor of Public Policy at the University of California at Berkeley, was Secretary of Labor in the Clinton administration. Time Magazine named him one of the ten most effective cabinet secretaries of the last century. He has written thirteen books, including the best sellers "Aftershock" and "The Work of Nations." His latest is an e-book, "Beyond Outrage." He is also a founding editor of the American Prospect magazine and chairman of Common Cause.
|
THE NEW STREAMLINED RSN LOGIN PROCESS: Register once, then login and you are ready to comment. All you need is a Username and a Password of your choosing and you are free to comment whenever you like! Welcome to the Reader Supported News community. |
 15 May 2013
|
 15 May 2013
|
 16 May 2013
|
 14 May 2013
|
 14 May 2013
|
 15 May 2013
|
 16 May 2013
|
 14 May 2013
|
 14 May 2013
|
Comments
We are concerned about a recent drift towards vitriol in the RSN Reader comments section. There is a fine line between moderation and censorship. No one likes a harsh or confrontational forum atmosphere. At the same time everyone wants to be able to express themselves freely. We'll start by encouraging good judgment. If that doesn't work we'll have to ramp up the moderation.
General guidelines: Avoid personal attacks on other forum members; Avoid remarks that are ethnically derogatory; Do not advocate violence, or any illegal activity.
Remember that making the world better begins with responsible action.
- The RSN Team
CG's and dividends will end up in the 20-25% category with dividends likely the lower of the two.
I would be more worried about from whence come those spending cuts.
I'm perfectly willing to have GOP Social Darwinists ground up for dog food.
Ordinary dividends are taxed at the rate of the bracket you're in, but qualified dividends are taxed at a 15% rate. And you can bet the rich are working with qualified dividends.
You're taxed at a 15% rate on capital gains if your total income places you in the twenty-five percent tax bracket or higher? But it can be as low as 0% if you're in the 10 to 15% bracket.
So Mitt would be paying 15% on both, but other deductions would take him below the 15% rate overall.
I believe ALL dividends and cap gains should be treated as ordinary income. Rich Americans have sucked the juice out our economy. They cry "CLASS WARFARE" after the damage has already been done. The "REDISTRIBUTION OF WEALTH" mantra that they always fall back on was in full swing (upward) under George Bush, and will continue unabated if something isn't done about it - NOW!
That is not enough ... and why is there this artificial segregation of income that puts the burden on workers ... because they are working too hard to pay attention to what is going on around them?
Incentive #2 - do good for others by creating opportunities for productive work.
Incentive #3 - decrease the ratio of camels getting through the eye of a needle/rich people getting through the gates of heaven.
What is the incentive to go to work?. Why not tax profits and not wages? instead of vice versa.
The same incentive as it is now - you get to earn money based on your decisions as to what is a good investment choice, with little or no actual labor involved (I recognize some folks do spend time on research but for the most part that is a limited amount of time). What else are people who have excess money going to do with it? Stuff it under their mattress?
The same as it is now, profit. It's just fair to expect coupon clippers to pay the same as those who work for it.
If they didn't tax the poor for labor they would go out and spend what they saved. The economy might take off if we just quit taxing labor
Investing in the markets does nothing at all to help the overall economy, and investing would still bring in added income. If you think the rich would quit investing because their taxes went up, you're deluded. They were doing it when their taxes were more than double what they are now and the fact that they are so low now, not our spending, is the reason we are in trouble.
Tax capital gains the same as regular income! Too bad it seems like most Americans don't know what a capital gain is.
Damn few small business owners make $250,000. Something like 2-3% do.Quoting patriot9878:
I assume this is tongue in cheek?
I'm guessing that was sarcasm?
Your superficial and simplistic reasoning always seems to get a lot of support at first, but for every person in America, the people that make less than them should pay lesser percentage rate tax than they do, and the person who makes more than them should pay a greater percentage rate tax than they do.
In my opinion the country would run much better too if the top rate and the highest dollar incomes was set at or above 66% so that for above some level like 10 million dollars, indexed to inflation, 2 dollars should go to the country for every one dollar the person makes. under that they pay the same rate as everyone else for whatever bracket they are in.
This would prevent the country being taken over by oligarchs like Russia has and we maybe have.
Yes! This is something I have been saying for a long time, although I would consider an exception for IPO's bought on opening day and held for at least five years. That kind of thing creates jobs. But when Warren Buffet buys 10 million shares of Coca Cola or whatever, that does not create jobs. Neither does using the capital gains rate on the salary for the manager of a hedge fund.
What is insane is that Social Security doesn't consider unearned income like earned income for certain programs?
The rich get richer and stay there and the rest of us get the finger.
We really need to go back to the progressive income tax with ALL forms of income taxed at the same rate. If not, then capital gains should carry the highest rate, not the lowest.
That's a 2% tax rate .... are you sure that's what you wanted to say?
Plus you figure they take about 360 billion the government gives away of your money that goes right into the pockets of the fat cats. The 650 billiom they spend on the military and you're talking over 2 trillion the government wastes every year. Kind of makes you mad doesn't it? But don't go off half cocked and head to Washington to hunt down people. They didn't know what they were doing. The accountants didn't tell them.
Ah, what Choir are you preaching to, Pastor? All those that have received the redistributed monies for the last 20 years? Whose income progressed way past any rational level while the ordinary working bum lost more and more of his wages to support their bonuses, leverage buyouts, manipulated profit-taking?
I guess re-distribution may be correct, IF you realize that past distribution of our country's wealth, expecially since the Bush Tax Cuts, has been inequitable, unfair, and unsustainable. It is entirely appropriate to re-distribute the ill-gotten gains of the connected, handout-getting wealthy to those that really expanded our country's economy.
Your notion of fairness is that the victims should pay the criminals to encourage them to subsequently pay their fair share. Actually we have kept trying that . . . they just don't seem to get the incentive, and have made that transfer their own sense of entitlement!
Preach again Pastor . . . explain why the unabashed takers should expect further payment and untaxed inheritance from the makers . . .
The way progressive tax brackets work is that EVERYone's income that falls within each bracket is taxed accordingly. Thus a man who earns $10,000.00/year might pay 10% in taxes; likewise a man earning 1 million pays 10% ON THE FIRST $10,000.00 of his income. Further income is taxed at progressively higher rates according to the bracket it falls into. (Minus loopholes, of course.) In the 1950's, the period of greatest economic growth in US history, (which at the time went mostly to the middle-class,) the highest bracket was aprx. 90%.
Most people wish they earned enough to be taxed at the higher rates. I'd happily take another $50,000.00 in income, even if it meant that I'd only get 60% of it-- or even only 10%. It wouldn't change the rates that apply to my current income. It's all additional.
I'm glad to read that you advocate the principle of fairness and assume that this means you favor a fairer distribution of income and wealth. Or do you have another definition of the term?
Stock buying should be limited selling stocks to raise capital and when you have finished building the company, then they pay off the stock holders and the stocks are liquidated. Commodity buying should be limited to people who use the commodity. That was the intended purpose to begin with. You would need a commodity in the future and you would want to lock in a price. If you sold the commodity you would want to cover if the price dropped too low. Today someone can manipulate the markets by buying more and more contracts raising the price of a commodity then they could sell that commodity for a profit. It's easy to track criminals like the 9/11 culprits who bought gold stocks and shorted the airlines, because they knew the 9/11 attacks were coming and they knew which way the markets would move. Looks like it would be easy to arrest the FBI and CIA agents who did this, but so far nothing.
O'Reily, Hannity, etc- talk about "white minority" can cry me a river into a box of Kleenex, once made in America. Hard-working Americans who pay bills, follow the law & buy the goods made in China the Mitts of America profit obscenely by, pay more taxes than a decade of Richy Rich's off-shore accounts.
Mitt Rmoney kept secret his tax returns for a reason- and now he's crying that Obama won because he promised the 47 percent of entitlement seekers, gifts. Go sulk in one of your car garages Rmoney. Hypocrisy needs to be called-out daily, and not just in here.
When FAUX news, Ms. Kelly, asked Rove if he was just "doing math Republicans do to make themselves feel better," the heaven's of hope opened up... It was the single greatest moment on FAUX- proving that it can be done. The avarice driven, men of malfeasance (and women), can be made to confront egregious, unethical, hypocritical and completely ludicrous behavior. I know there are people w/the balls to do it; it's our job to put the pressure on, because nothing moves a mountain like people waking up to the reality that they've been punked.
Buying munis would do what they've refused to do for decades, help fix the infrastructure.
Yes, but they would be working for the people and would create jobs and a better economy, not raping the economy as they are doing now. When the Romneys of the world ship the jobs overseas they don't pay taxes on their overseas profits and they slash the tax base by throwing millions of people out of work.
In case you hadn't noticed, the infrastructure id crumbling and Republican caused help for states and municipalities is the lowest it's ever been.
If Romney pays no taxes, but his money helps the economy I don't mind. Right now he pays much less than you do and damages the economy.
So far as finding ways in which to close the tax loopholes, one has only to look at the Romney tax avoidance strategies as a road map to the loopholes.
The poor only need food, clothing and shelter. We can grow our own food and hunt and fish. We can make our own clothes and we can build our own homes. We don't need your goofy jobs that tax us how about 50% when someone makes $1,500 a week. I know we worked Dupont in 1984 and we made $12 an hour and we worked double shifts and they would take $700 out of our $1,400 for all taxes. So talk about tax percentages you rich pay. The poo get hammered for labor they aren't even suppose to pay.
IF the poor said screw it and just became farmers, painters and carpenters, then who would do the dirty work for the rich? You rich need th poor people. We don't need you and the hundreds of billions of dollars you waste and then line your own pockets.
It's true taxes were not meant to be levied on working people.
The poor and middle class just need the rich to quit enslaving them and taking their lives, either literally or figuratively. Everyone rich or poor should have the right to live a human life and not be used as a machine.
The thing is the rich have ways of hiding money. If you taxed them higher they can move their company to Mexico. They can live in another country. Poor people don't have that option. Just like some states have no state income tax so why doesn't everyone just go live there? I mean it might be 25 to 30 a week.
Exactly cities are like gold to the rich. Those city people can't farm or grow chickens or rabbits and they can grow produce. They can't just pick veggies for a farmer. They can't catch fish and sell. Those city people need the factories, hotels, and restaurants to provide them money.
I live in the marsh and eat muskrats, oysters, clams, fish and crabs. I ate so many oysters the other day I coudl hardly walk. You know what the cost was zero. Sometimes I eat crabs till I'm sick of them. I eat fresh veggies when they come off and I can the rest. I wish I had a lady friend to share this and the beach is one hour away. I feel sorry for people who live in Baltimore and all that processed junk and pollution.
When we have events like Waco, Oklahoma City and 9/11 and not one politician goes after the BATF or even mentions anything about them, then we are being controlled and we can talk till we are blue in the face.
Hardly, what we really need is progressive that are not just jerk racists and anti-semites. Kick these loses out of any progressive organization and you might see some progress.
The only thing I knew about Jews growing up was that Jesus was one and that they went to "church" in Tulsa on Saturday.
Upon entry into the larger world, I met Asians, Jews and myriad populations previously unknown to me.
Not being Jewish and raised in the Bible Belt, I think our biggest threat are arrogant, white male WASPS who are frightened about losing their power perch and need to put a boot heel on the neck of the masses to protect their self-exalted perch. Those guys put their pants on one leg at a time like the rest of humanity.
United we stand, divided we fall. There is room enough for all of us on this planet.
Patriot 9878: GET A GRIP, YOU ARE COMING UNFRAYED AT THE SEAMS!!! (Emphasis Intentional).
The rich create foundations and trust funds and they really thank all the workers who make this possible. What would the rich have if the poor just bought a piece of ground. Grew their own food and made their own clothes and didn't work for the rich? What would the rich do? IF people would just think the rich need the poor. If all the rich were to get on a rocket and fly to the moon the world would be a better place.
IF I say the Jews it means religion. Jews are not a race. I can say Jews or can I say synagogue worsippers? Can I say Christians are manipulating the markets? ISn't being Jewish only about religion?
RSS feed for comments to this post