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Stiglitz writes: "One of the reasons for our poor economic performance is the large distortion in our economy caused by the tax system. The one thing economists agree on is that incentives matter - if you lower taxes on speculation, say, you will get more speculation."

Economist Joseph Stiglitz. (photo: Roosevelt Institute)
Economist Joseph Stiglitz. (photo: Roosevelt Institute)

A Tax System Stacked Against the 99 Percent

By Joseph E. Stiglitz, The New York Times

16 April 13


EONA HELMSLEY, the hotel chain executive who was convicted of federal tax evasion in 1989, was notorious for, among other things, reportedly having said that "only the little people pay taxes."

As a statement of principle, the quotation may well have earned Mrs. Helmsley, who died in 2007, the title Queen of Mean. But as a prediction about the fairness of American tax policy, Mrs. Helmsley's remark might actually have been prescient.

Today, the deadline for filing individual income-tax returns, is a day when Americans would do well to pause and reflect on our tax system and the society it creates. No one enjoys paying taxes, and yet all but the extreme libertarians agree, as Oliver Wendell Holmes said, that taxes are the price we pay for civilized society. But in recent decades, the burden for paying that price has been distributed in increasingly unfair ways.

About 6 in 10 of us believe that the tax system is unfair - and they're right: put simply, the very rich don't pay their fair share. The richest 400 individual taxpayers, with an average income of more than $200 million, pay less than 20 percent of their income in taxes - far lower than mere millionaires, who pay about 25 percent of their income in taxes, and about the same as those earning a mere $200,000 to $500,000. And in 2009, 116 of the top 400 earners - almost a third - paid less than 15 percent of their income in taxes.

Conservatives like to point out that the richest Americans' tax payments make up a large portion of total receipts. This is true, as well it should be in any tax system that is progressive - that is, a system that taxes the affluent at higher rates than those of modest means. It's also true that as the wealthiest Americans' incomes have skyrocketed in recent years, their total tax payments have grown. This would be so even if we had a single flat income-tax rate across the board.

What should shock and outrage us is that as the top 1 percent has grown extremely rich, the effective tax rates they pay have markedly decreased. Our tax system is much less progressive than it was for much of the 20th century. The top marginal income tax rate peaked at 94 percent during World War II and remained at 70 percent through the 1960s and 1970s; it is now 39.6 percent. Tax fairness has gotten much worse in the 30 years since the Reagan "revolution" of the 1980s.

Citizens for Tax Justice, an organization that advocates for a more progressive tax system, has estimated that, when federal, state and local taxes are taken into account, the top 1 percent paid only slightly more than 20 percent of all American taxes in 2010 - about the same as the share of income they took home, an outcome that is not progressive at all.

With such low effective tax rates - and, importantly, the low tax rate of 20 percent on income from capital gains - it's not a huge surprise that the share of income going to the top 1 percent has doubled since 1979, and that the share going to the top 0.1 percent has almost tripled, according to the economists Thomas Piketty and Emmanuel Saez. Recall that the wealthiest 1 percent of Americans own about 40 percent of the nation's wealth, and the picture becomes even more disturbing.

If these numbers still don't impress you as being unfair, consider them in comparison with other wealthy countries.

The United States stands out among the countries of the Organization for Economic Cooperation and Development, the world's club of rich nations, for its low top marginal income tax rate. These low rates are not essential for growth - consider Germany, for instance, which has managed to maintain its status as a center of advanced manufacturing, even though its top income-tax rate exceeds America's by a considerable margin. And in general, our top tax rate kicks in at much higher incomes. Denmark, for example, has a top tax rate of more than 60 percent, but that applies to anyone making more than $54,900. The top rate in the United States, 39.6 percent, doesn't kick in until individual income reaches $400,000 (or $450,000 for a couple). Only three O.E.C.D. countries - South Korea, Canada and Spain - have higher thresholds.

Most of the Western world has experienced an increase in inequality in recent decades, though not as much as the United States has. But among most economists there is a general understanding that a country with excessive inequality can't function well; many countries have used their tax codes to help "correct" the market's distribution of wealth and income. The United States hasn't - or at least not very much. Indeed, the low rates at the top serve to exacerbate and perpetuate the inequality - so much so that among the advanced industrial countries, America now has the highest income inequality and the least equality of opportunity. This is a gross inversion of America's traditional meritocratic ideals - ideals that our leaders, across the spectrum, continue to profess.

Over the years, some of the wealthy have been enormously successful in getting special treatment, shifting an ever greater share of the burden of financing the country's expenditures - defense, education, social programs - onto others. Ironically, this is especially true of some of our multinational corporations, which call on the federal government to negotiate favorable trade treaties that allow them easy entry into foreign markets and to defend their commercial interests around the world, but then use these foreign bases to avoid paying taxes.

General Electric has become the symbol for multinational corporations that have their headquarters in the United States but pay almost no taxes - its effective corporate-tax rate averaged less than 2 percent from 2002 to 2012 - just as Mitt Romney, the Republican presidential nominee last year, became the symbol for the wealthy who don't pay their fair share when he admitted that he paid only 14 percent of his income in taxes in 2011, even as he notoriously complained that 47 percent of Americans were freeloaders. Neither G.E. nor Mr. Romney has, to my knowledge, broken any tax laws, but the sparse taxes they've paid violate most Americans' basic sense of fairness.

In looking at such statistics, one has to be careful: they typically reflect taxes as a percentage of reported income. And the tax laws don't require the reporting of all kinds of income. For the rich, hiding such assets has become an elite sport. Many avail themselves of the Cayman Islands or other offshore tax shelters to avoid taxes (and not, you can safely assume, because of the sunny weather). They don't have to report income until it is brought back ("repatriated") to the United States. So, too, capital gains have to be reported as income only when they are realized.

And if the assets are passed on to one's children or grandchildren at death, no taxes are ever paid, in a peculiar loophole called the "step-up in cost basis at death." Yes, the tax privileges of being rich in America extend into the afterlife.

As Americans look at some of the special provisions in the tax code - for vacation homes, racetracks, beer breweries, oil refineries, hedge funds and movie studios, among many other favored assets or industries - it is no wonder that they feel disillusioned with a tax system that is so riddled with special rewards. Most of these tax-code loopholes and giveaways did not materialize from thin air, of course - usually, they were enacted in pursuit of, or at least in response to, campaign contributions from influential donors. It is estimated that these kinds of special tax provisions amount to some $123 billion a year, and that the price tag for offshore tax loopholes is not far behind. Eliminating these provisions alone would go a long way toward meeting deficit-reduction targets called for by fiscal conservatives who worry about the size of the public debt.

Yet another source of unfairness is the tax treatment on so-called carried interest. Some Wall Street financiers are able to pay taxes at lower capital gains tax rates on income that comes from managing assets for private equity funds or hedge funds. But why should managing financial assets be treated any differently from managing people, or making discoveries? Of course, those in finance say they are essential. But so are doctors, lawyers, teachers and everyone else who contributes to making our complex society work. They say they are necessary for job creation. But in fact, many of the private equity firms that have excelled in exploiting the carried interest loophole are actually job destroyers; they excel in restructuring firms to "save" on labor costs, often by moving jobs abroad.

Economists often eschew the word "fair" - fairness, like beauty, is in the eye of the beholder. But the unfairness of the American tax system has gotten so great that it's dishonest to apply any other label to it.

Traditionally, economists have focused less on issues of equality than on the more mundane issues of growth and efficiency. But here again, our tax system comes in with low marks. Our growth was higher in the era of high top marginal tax rates than it has been since 1980. Economists - even at traditional, conservative international institutions like the International Monetary Fund - have come to realize that excessive inequality is bad for growth and stability. The tax system can play an important role in moderating the degree of inequality. Ours, however, does remarkably little about it.

One of the reasons for our poor economic performance is the large distortion in our economy caused by the tax system. The one thing economists agree on is that incentives matter - if you lower taxes on speculation, say, you will get more speculation. We've drawn our most talented young people into financial shenanigans, rather than into creating real businesses, making real discoveries, providing real services to others. More efforts go into "rent-seeking" - getting a larger slice of the country's economic pie - than into enlarging the size of the pie.

Research in recent years has linked the tax rates, sluggish growth and rising inequality. Remember, the low tax rates at the top were supposed to spur savings and hard work, and thus economic growth. They didn't. Indeed, the household savings rate fell to a record level of near zero after President George W. Bush's two rounds of cuts, in 2001 and 2003, on taxes on dividends and capital gains. What low tax rates at the top did do was increase the return on rent-seeking. It flourished, which meant that growth slowed and inequality grew. This is a pattern that has now been observed across countries. Contrary to the warnings of those who want to preserve their privileges, countries that have increased their top tax bracket have not grown more slowly. Another piece of evidence is here at home: if the efforts at the top were resulting in our entire economic engine's doing better, we would expect everyone to benefit. If they were engaged in rent-seeking, as their incomes increased, we'd expect that of others to decrease. And that's exactly what's been happening. Incomes in the middle, and even the bottom, have been stagnating or falling.

Aside from the evidence, there is a strong intuitive case to be made for the idea that tax rates have encouraged rent-seeking at the expense of wealth creation. There is an intrinsic satisfaction in creating a new business, in expanding the horizons of our knowledge, and in helping others. By contrast, it is unpleasant to spend one's days fine-tuning dishonest and deceptive practices that siphon money off the poor, as was common in the financial sector before the 2007-8 financial crisis. I believe that a vast majority of Americans would, all things being equal, choose the former over the latter. But our tax system tilts the field. It increases the net returns from engaging in some of these intrinsically distasteful activities, and it has helped us become a rent-seeking society.

It doesn't have to be this way. We could have a much simpler tax system without all the distortions - a society where those who clip coupons for a living pay the same taxes as someone with the same income who works in a factory; where someone who earns his income from saving companies pays the same tax as a doctor who makes the income by saving lives; where someone who earns his income from financial innovations pays the same taxes as a someone who does research to create real innovations that transform our economy and society. We could have a tax system that encourages good things like hard work and thrift and discourages bad things, like rent-seeking, gambling, financial speculation and pollution. Such a tax system could raise far more money than the current one - we wouldn't have to go through all the wrangling we've been going through with sequestration, fiscal cliffs and threats to end Medicare and Social Security as we know it. We would be in sound fiscal position, for at least the next quarter-century.

The consequences of our broken tax system are not just economic. Our tax system relies heavily on voluntary compliance. But if citizens believe that the tax system is unfair, this voluntary compliance will not be forthcoming. More broadly, government plays an important role not just in social protection, but in making investments in infrastructure, technology, education and health. Without such investments, our economy will be weaker, and our economic growth slower.

Society can't function well without a minimal sense of national solidarity and cohesion, and that sense of shared purpose also rests on a fair tax system. If Americans believe that government is unfair - that ours is a government of the 1 percent, for the 1 percent, and by the 1 percent - then faith in our democracy will surely perish. your social media marketing partner


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+85 # engelbach 2013-04-16 16:06
"If Americans believe that government is unfair - that ours is a government of the 1 percent, for the 1 percent, and by the 1 percent - then faith in our democracy will surely perish."

It already has, Mr. Stiglitz.

Thank you for the insightful article.

For 2011, because we had closed out a 401(k) of about $130,000, we paid 27% in federal tax. Romney, with income in excess of several million dollars, paid 14%.

Yes, that's pretty damn unfair.
+54 # bigkahuna671 2013-04-16 16:53
Actually, Romney's declared income (I personally don't believe all his income is reported) is at least five to seven times more than just "several." I'm on a fixed income and paid 15% in federal taxes because all the deductions the middle class used to have before Ronnie Raygun the Magnificent (and munificent) took them away in the 1980s. Throw in my medicare deductions from what little I earn, my SocSec deductions, my state taxes, etc, etc, etc, and I pay over 20% from an income of less than $50K. You don't have to tell me we're being screwed, but Pres. Obama is doing his darndest to increase my tax load despite saying he'd never hurt seniors and the middle class. Oh yeah, I voted for him twice and I'm quite disappointed in his willingness to sell us out so he can say he's being bipartisan. Shame on you, Mr. President, you lied to all of us!!! The 99% needs someone who'll actually do what he/she says and protect us from the 1%. Of course, that will only happen when our Congress, the best legislative branch money can buy (and they're truly bought and paid for), decides to help all Americans and not just their lobbyist friends, campaign donors, and their rich friends.
+31 # Vardoz 2013-04-16 18:49
From a donor: We elected a profoundly inexperienced guy to be our president after being fed up with the Bush regime who stole 2 elections lied about going to war and broke our economy. Remember the "ownership society" rap. Then we had a choice between a big pig and an inexperienced newcomer who doesn't seem to understand the difference between caving and compromise or perhaps he's just being told what to do. Hilary might have been more equipped to be a hard bargainer but we should take into account the shadow government- the big boys who are pulling the strings in the global arena. Jobs and fair wages are people's life blood. Without an effort to create jobs and consideration for the health of the economy as a whole I cannot see how we will survive. So far there does not seem to be any interest in creating jobs, job stability or fair wages. Until we the people strike, protest, speak out and vote no change will take place and there will be another great depression. All the components are in place.The pigs are at the trough, and with everything out of control and regulations, oversight and accountability out the window, no society can continue to function well with such a high degree of corruption. We should brace ourselves for the worst.
+14 # Christopher Warren 2013-04-16 20:18
I'm amazed that Americans have lost connection with our Forefather Foundersthat were very suspicious of huge wealth being the enemy of Democracy because they realized that Monarchies were always founded out of Economic monopolies that abetted the accumulation of enough wealth to form private Armies that enforced the monopolistic hegemony. This created more wealth, this purchased or subdued the competition until the wealth was great enough to purchase the Church, (every single one, no matter where or what) and suddenly, the MONOPOLY was ordained by the GODS and not just the MONEY!
I despair that no one, even Mr Stiglitz is too intimidated by the money to make this obvious comparison!
+9 # dkonstruction 2013-04-17 11:21
Quoting Christopher Warren:
I'm amazed that Americans have lost connection with our Forefather Foundersthat were very suspicious of huge wealth

I don't think it is accurate to say that the "Founding Fathers" we suspicious of or opposed individuals acquiring "huge wealth." They were indeed suspicious of political power being monopolized in the hands of any one individual or even a small cabal but certainly they were not opposed to this power being held by the "gentry class" as a whole (what many today call the 1%). This was why they called for the 3 branches of gov't and for "checks and balances" but again this was not about real democracy or including the vast majority of people in the political process at all (only white men with sufficient property could vote and you needed more property to be eligible to be elected).

Madison, for example, in Federalist 10 worries about how political power must be "limited to a certain number, in order to guard against the confusion of a multitude." And, what is this "confusion" to which Madison refers? In part it is "A rage for paper money, for an abolition of debts, for an equal division of property, or for any other improper or wicked project."

So, were they concerned about political power becoming a monarchic monopoly? Sure. But this is very different from saying they wanted genuine economic or political democracy and egalitarianism.
+1 # bigkahuna671 2013-04-18 18:58
You are absolutely correct. Our Founding Fathers were not really into democracy, per se. For them, democracy meant the well-to-do making decisions for everyone. That's why voting required ownership of land. Landowners were seen as worthy of the vote, everyone else wasn't, simple as that. That's where the term "landed gentry" comes from, from the well-to-do who owned land. Sorry to say, but that's where we're headed today as foreclosure, crushing of unions, and outsourcing reduces the ability of many Americans to own their own homes. In addition, the "landed gentry" is trying to make it harder to vote, requiring all kinds of different identification to prove you're worth of that right, regardless of what the Constitution says.
+9 # RLF 2013-04-17 05:52
Good article but only the tip of the iceberg. All other taxes...on cell phones, utilities, highway, insurance, sales, etc....have become much more relied on by the states, getting much higher. These taxes are incredibly regressive and the source of probably another 25-40% of you're income. This means that many people are paying the same as Denmark, where people get better health care than here, and better services in general. I go to Denmark often and I don't see the same anger at taxes there, because people feel they get something for their money, unlike here. Time to organize a tax strike? The politicians don't listen to us about anything...mayb e they would listen to that!
+12 # The Ice Maiden 2013-04-17 06:19
So can someone explain to me why so many people voted for the Republican candidate? And why were so many of his supporters the very people Republican policies openly throw under the bus?
+4 # dkonstruction 2013-04-17 13:24
Quoting The Ice Maiden:
So can someone explain to me why so many people voted for the Republican candidate? And why were so many of his supporters the very people Republican policies openly throw under the bus?

Ice Maiden,

Check out Thomas Frank's "What's the Matter with Kansas" is essentially trying to grapple with and answer the question you are posing.
+18 # Susan1989 2013-04-16 16:16
It has already....
+7 # dick 2013-04-16 16:24
Obama is going to have to part the Red Sea if he is going to even begin to make amends for all the GROSS EQUALITY & CRIMINAL plutocracy he has enabled, facilitated, covered-up. He never met a human trafficking money launderer he didn't like. One wonders what his daughters will think IF they ever catch on. Their father subverted US & other democracies to enrich & empower some of the most evil, most destructive people ever. Quite a LEGACY.
+10 # Rain17 2013-04-16 16:25
One thing I want to correct is that the IRS does require those who own offshore accounts in tax havens to disclose them if the value is over $10K. See:

"United States persons are required to file an FBAR if:

The United States person had a financial interest in or signature authority over at least one financial account located outside of the United States; and
The aggregate value of all foreign financial accounts exceeded $10,000 at any time during the calendar year to be reported."

There are some exceptions noted there, but the IRS generally wants to be made aware of foreign assets. It is a requirement to file that information because the IRS and the US government want to know if people are circumventing the law or using these foreign countries to fund terrorism and other illicit activities.

This may be why Romney refused to release earlier tax returns. In 2009 the IRS offered an amnesty to those who had used UBS to fund Swiss accounts. I suspect that Romeney may have availed himself of the opportunity to take advantage of that tax amnesty.

So, while those using tax haves don't have to pay taxes on the assets, the IRS does require them to report the value of those accounts.
+18 # Rain17 2013-04-16 16:31
The tax system does favor the rich, but I find that most Americans don't understand how the extremely rich file their taxes. Those who are mulct-millionai res and billionaires derive the vast majority of their income from capital gains, dividends, and interests. Usually they sell assets/stocks that have lost money to reduce their gains. They also give some of their profits to charity, which lowers their income. A relatively small, if any, percent of their income comes from wages or W-2 income.

The biggest losers in the US income tax system are doctors, lawyers, and businessmen who make around $250K to maybe $1 million. Most of them are still relatively poor enough--"poor" in comparison to the multi-millionai res and billionaires--i s that a large share of their income comes from wages. So they are paying a large share of their income in taxes because they don't have enough capital gains and dividends. They may have some capital losses, but nowhere enough to reduce their income tax liability. They are the biggest suckers of them all.

The US income tax system is very much like a bell curve. At one end you have those who pay very little. At the other end you have the extremely rich who, using the methods I describe above, pay very little. The tax rate reaches a bell curve, probably peaks at around maybe $500K-$1,000,00 0, and then decreases.
+18 # Rain17 2013-04-16 16:35
But most people don't get the reality of the US tax system. They think that they pay the final rate of their taxation. So, if their last tax rate is 28%, they think they're paying that on their entire income. They don't. For example I made around $100K last year; but, through the mortgage interest deduction, state income tax deduction, charity, and selling stocks that lost money, my effective tax rate--at least this is what Turbo Tax told me--was 14%.

The final thing that does irritate me, though, is the stinginess of the student loan interest deduction. It makes out at 75K per person and is limited to $2500 in interest. But that basically prevents many doctors and attorneys, who leave school owing $200K or more in debt, no deduction.

I do think that they should raise the income on the student loan deduction because many of those graduates with the highest debt make a lot of money, but also face steep loan payments. I'm talking about doctors who are just starting out.
+4 # RobertMStahl 2013-04-16 16:53
You might want to consider the relationship over time between statutes and regulations. If that is just a game, and it is, with no explanation of LIABILITY, all of this discussion goes straight down the tubes.

A Theft by Deception from Larken Rose is impeccable:

Innocence Revealed is as important:
+20 # teineitalia 2013-04-16 17:17
How I wish our President would listen to this man, Joseph Stiglitz. He knows exactly what he is talking about, and is able to teach it to others. I am neither an economist nor a financier, but this is readable, comprehensible, and full of insight about our current system of taxation.

The last two paragraphs are noteworthy. Without faith in the fairness of the system, many will give up, opt out, refuse to pay. Do we really want this great experiment in democracy to perish without a fight? What will we say to Abraham, Martin and John... that we just gave up?
0 # brux 2013-04-17 23:24
Yes, Stiglitz is one of the smartest, most honest men talking about the economy ... ranks right up there ... maybe even higher than Robert Reich since Stiglitz knows economics much better.
+21 # mrbadexample 2013-04-16 17:38
"Neither G.E. nor Mr. Romney has, to my knowledge, broken any tax laws..." Of course they haven't. Because unbeknownst to most people, the tax laws are largely written by the lobbyists for the 1%. Congresscreatur es don't do it, and anyone competent enough on their staff to write tax law can triple income by going into the private sector.
+8 # Vardoz 2013-04-17 09:37
The corporations pay off the reps to write the tax laws to favor them. There is a reason 40% of the wealth is in the hands of 1%.
+11 # ghostperson 2013-04-16 18:34
Rent-seekers don't care so long as they get theirs.

Unfortunately, our so-called "leadership" of both parties get their campaign war chests from the rent-seekers.

The people suck hind tit.
+16 # ghostperson 2013-04-16 18:42
I read an article some years ago about Palestinians which said that violence is the frustrated reaction of the hopeless to sustained oppression.

We see our planet destroyed by rapine development, lack of loyalty by those given tax advantages to the countrymen who paid their bailouts, an absence of conscience and commonsense, exhaltation of ignorance, hostility to public education, xenophobia and hatred of female autonomy.

We seem to have adopted the success model of sub-Sahara African dictatorships. This doesn't work for me and mine.
+5 # papabob 2013-04-17 00:17
Vardoz puts things in a way that helps me understand a very complex situation - "The pigs are at the trough, ... "
+4 # turtleislander 2013-04-17 05:35
The huge campaign costs are for buying mass media time and space I am assuming. This would be to buy votes to be our representatives . So given that such large majorities of Americans oppose the wars, oppose touching social security and medicare, favor higher taxes on those who profit mightily on our backs, wouldn't that suggest all those TV ads and so on are ineffective for all that money?

I can't think of any reason elected "representative s" ignore us and our orders. Yet they do.
+4 # da gaf 2013-04-17 08:48
so as i said before- America is proof that the "Planet of the Apes" is here and now!..and as time go by it has become more and more ugly as the shadow governments continues their selfish way moving us all back to the dark ages of mankind. WITH JUST THE RICH LANDLORDS- and the PATHETIC POOR just trying to survive.
0 # brux 2013-04-17 23:18
It's a MADHOUSE! ;-)
+4 # dkonstruction 2013-04-17 09:04
If, as Stiglitz does, you present the tax system as simply being the creation of politicians and or technocrats and provide no historical analysis as to how we went from a system where the rich paid virtually nothing in taxes (as was the case, for example, in the late 19th and early 20th centuries) and how we then got a "progressive" income tax system then people never understand how change actually happens in this country.

We only got the "progressive taxation" system we got (such that it was) due to people organizing and demanding change (e.g., the populists in the late 19th century and the "progressives" in the early 20th century). It was only fear of "the rabble" due to the successful organizing of a mass movement (the same was true for gaining the rights of workers to organize, collective bargaining, and all of the New Deal legislation) that scared the elites (at least their "advanced" wing) such that they believed that unless they implemented substantive "reform" that they could lose a whole lot more.

So, while I agree with Stiglitz that we need to change our tax system, if we don't understand that it is only when we have sufficient political power (and this doesn't mean electing the "right" politicians) which only comes about through the organizing of a mass movement (as well as the institutions needed to support it) that we will get any real reform.

The system in and of itself has no such incentive no matter who we elect.
+2 # onewatcher 2013-04-17 11:43
The "unfillable" holes (desires):
1.Sex...ask the pimps
2.Booze...ask the alcoholics
3. Drugs.....ask the cartels
4.Money.....ask wallstreet
5.Stuff....ask the 99.99% who have an active MORE HOLE.
6.Bunkers...ask the survivalist , can't get enough -o- canned goods, guns & ammo
-3 # da gaf 2013-04-17 17:21
Quoting onewatcher:
The "unfillable" holes (desires):
1.Sex...ask the pimps
2.Booze...ask the alcoholics
3. Drugs.....ask the cartels
4.Money.....ask wallstreet
5.Stuff....ask the 99.99% who have an active MORE HOLE.
6.Bunkers...ask the survivalist , can't get enough -o- canned goods, guns & ammo

ho ho ho--don't mess with my ho!!..gulp t'maters!
0 # da gaf 2013-04-17 17:24
well i see u'all on da freight-trains- should be a lot of bums besides ourselves on it!
0 # brux 2013-04-17 23:17
Love Joe Stiglitz ... this is the only guy who has the clout and knowledge to explain to the people what is going on.

His books are excellent and he has the logic down perfectly.

You want to know what is going on in America - read Stiglitz.
0 # brux 2013-04-17 23:23
Folks if you want a simple-minded guy's like my take on what Stiglitz is saying ... read my one and only article on RSN please ... no one has read it and it makes me really depressed ... it's called "We Should Stop Treating Billionaires Like Millionaires" and explains simply ... I think ... why our tax system is so broken, in a concept that is the same information but presented a little differently than Stiglitz's explanation.

Please, let me know what you think.
0 # dkonstruction 2013-04-18 07:51
Brux, I read your piece (thanks for pointing out that it was there) and recommend it to other readers on this board. I think you have laid it out very nicely (i.e., the problem with the current tax system and why it is not truly progressive).

The only thing I would add is that I think it's important for people to have an understanding of how we went from a tax system in which the rich paid virtually nothing (in the late 19th century) to one in which they were (at least for a while) taxed a lot (relatively speaking) i.e., the tax system that emerged out of the Progressive Era.

The reason I think this is important is that it shows that the only reason we got this tax reform was due to the pressure of organized mass social movements and that this is the missing piece today (not that we are not electing the right people).

A very good read on this (just finished it recently) is Sam Pizzigati's "The Rich Don't Always Win." It's also uplifting in that it shows how it is possible to go from a system with a similar income wealth concentration/d isparity as we have today (i.e., as it was in the late 19th century) to one in which the tax system is far more progressive and helped to allow for the growth of a sizable middle class in this country.

So, again, I like your piece and hope others will have a look as well.
0 # Marvin Mandell 2013-04-19 18:33
Mr. Stiglitz forgets to include John F. Kennedy's role in lowering the taxes on the highest bracket. Under Roosevelt, Truman, and Eisenhower, the rate was about 91%. JFK
campaigned on the promise to lower this rate,and this was finally accomplished just after his death. Reagan of course continued
what JFK had started.

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