RSN Fundraising Banner
FB Share
Email This Page
add comment

writing for godot

We Should Stop Treating Billionaires Like Millionaires

Print
Written by bruce k.   
Monday, 07 January 2013 19:23

It isn't what we don't know that gives us trouble, it's what we know that ain't so.
- Will Rogers

And we all know that the American tax system is "progressive", right? After all, we hear how rich people are pay more in taxes than poor people, right ? .... well, not not so much actually, let's look at it from altitude!

Only in the cases of working people earning under approximately $400,000.00 in income from work is that true. Let's look at the numbers for "working individuals" ( let's ignore married filers for this example, the concept is the same but the numbers are slightly different ) who make their income from working, there are 6 tax rates in the United States: (fro m Wikipedia schedule under "Taxation in the United States")

10% on income under $8,700
15% on income from $8,700 to $35,350 * (capital gains/investments)
25% on income from $35,350 to $85,650
28% on income from $85,650 to $178,650
33% on income from $178,650 to $388,350
35% on income $388,350 and above * (the proof is right here)

The above schedule is only for "working" income - as contrasted to
"investment" income which is taxed at a very much lower rate.

Many of the wealthiest people far removed from the middle and working
classes, who might normally be paying a maximum rate, like Warren Buffet,
Bill Gates, Mitt Romney, hedge fund managers, pay around 15% on income
derived from investments - close to the lowest possible rate. This is what
Mitt Romney's 11% tax rate exposed in the last election. Did we get even
a high-school level analysis of this in the media though? Not a peep.

Looking at the tax rates here, what can we all glean about our
system with a little analysis and understanding of human nature?

To put it short and sweet ... America taxes billionaires like millionaires.
That means that the majority of Americans are put in a pressure point
and hurt when it comes time to raise revenue ... everyone except the
very rich who proportionately pay very little. This means the pain is
not evenly distributed, in fact is about as uneven as it can get and over
time what this does is to create a government too weak to stand up
to private power, and too poor to refuse to participate in the institutional
bribery we euphemistically call lobbying.

The tax burden falls on the people least able to pay and most
negatively affected by paying higher taxes they should not have to.
Even more regressive when you consider that investment income is
taxed at an almost insignificant rate and most truly wealthy people
make most of their income from investments - as in Mitt Romney's
11% tax rate on over 20 million dollars. We end up with a system
that is specifically engineered to keep most of the people down and
to keep most of the 0.01% up - whatever merit or justice might say
about anyone. Dare I describe this as unAmerican?

But it is even worse because investment income gets even more
special treatment ... over time lawyers and lobbyists have worked
hard to transfer the incomes of CEOs and even hedge fund brokers
down into these special low tax rates in some reported cases where
billion dollar incomes are taxes as capital gains near the lowest tax
rate in the country.

This is particularly unfair and cruel to our working population, who
because of globalization has steadily seen their incomes and their
standard of living fall relative to inflation, yet proportionately they
are being taxed more, and put into indebtedness more as well,
meaning they do not even see the full value of their tax money at
work because a portion of it goes to pay interest to the rich who
merely lend their money to government.

Taxing or treating billionaires like millionaires means that when
it comes to taxing the majority of these people the ones near the
bottom ... in this case the bottom is at about $400.000.00 a year,
they are hurt and pressured more by taxes than the very rich.
A great way to get these people to vote against their country
because they cannot afford to be more generous.

Taxing all very high income people at the same rate is a very clever
but dishonest way in which to financially align them politically.
If you are a successful business owner or professional it is not
hard to be in he same tax bracket as Bill Gates or Warren Buffet
even though you could actually be struggling, though not in the
sense that poor and middle class struggle, with all the costs of
high value real estate, automobiles, vacations, luxuries, investments,
college tuitions, medical bills, charity, etc.

Aligning people above a certain wealth level against working people
who want to get ahead is divisive and fracturing the country as
well as having led to the financial mess we are in today by putting
so much pressure to those on the bottom that they can not contribute
enough to keep demand up and thus cause a well-known and understood
shrinkage in the economy that continuously spirals down.

The answer in my opinion is to get rid of tax brackets they way we
implement them today and create either more and higher tax brackets
so that we still motivate small business and entrepreneurs to grow, but
we also incentivize the top .01% not just to play political lobbying games
but to instead put their money to work doing something useful.

This system would motivate the plutocracy to solve problems efficiently
through our capitalist economy and democratic system in order to
lower their taxes - by solving problems - not by trying to jettison their
responsibility to the bulk of Americans and inspire greed, underhandedness
and corruption.

To me pretending that our tax system is progressive, suggesting that this
is the case and even taking it for granted in the media is an outrage. When
someone making well under half a million dollars is taxed at the same rate
as someone who makes tens of millions of dollars it is not only wrong but
it undercuts the legitimacy of our system and shows our country to
be in the pocket of the rich and the big corporations - who are also less
and less American in nature, and more global.

e-max.it: your social media marketing partner
Email This Page

 

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.

RSNRSN