As the House considers a bill to extend the Bush tax cuts for the top 2%, slash corporate taxes and potentially make the Estate Tax more generous to billionaires than ever before, it's instructive to put the move into a larger cultural/historical context. And thanks to newly released IRS documents, we can do just that.
As the Institute for Policy Studies reports, officials at the National Archives recently released a 67-year-old U.S. Treasury Department report detailing what the richest Americans once paid in taxes in the middle of the 20th century. IPS notes that "We have simply never had clearer evidence of just how much America used to expect out of individual wealthy Americans -- and just how little, by comparison, we expect out of our wealthy today." Here are some of the details:
We learn, for instance, that 1941's top executive at IBM, Thomas Watson, collected $517,221 in compensation that year, about $7.7 million in current dollars. Watson paid 69 percent of his total 1941 income in federal income tax.
Last year, today's chief exec at IBM, Sam Palmisano, took home $24.3 million for his executive labors. We don't know how much income above that sum Palmisano reported in 2009, or exactly how much of that total he paid in taxes.But we do know that the 13,374 Americans who reported incomes over $10 million in 2008, the latest year with IRS stats available, paid an average 24.1 percent of their taxable incomes in federal income tax.
In other words, IBM CEO Palmisano last year took home, after adjusting for inflation, over three times more than his predecessor Thomas Watson took home in 1941. Yet Watson in 1941 paid almost three times more of his income in federal income taxes than Palmisano likely paid in 2009.
So assuming that Palmisano pays roughly what his fellow millionaires pay in taxes, we've seen IBM CEO tax rates go from 69 percent down to 24 percent. That's a massive tax cut, and it's no coincidence that it came over the very same period we saw an explosion in federal deficits. And remember, these numbers compare the data that exists before this week's expected passage of even more new deficit-expanding tax cuts for the super-rich.
Save for being referenced in Bernie Sanders' 9-hour-long quasi-filibuster, these new numbers weren't a part of the debate about the new tax cuts - and they certainly didn't play a decisive role for White House and congressional policymakers. That's because the numbers represent a deeper cultural/attitudinal shift toward wealth deification in this, a radical new greed-is-good epoch (by "new" I mean the last 30 years in our country's 200+ year history). Embedded in our tax and budget debates is the bipartisan assumption that the super-rich shouldn't pay the tax rates they paid during the mid-20th century - AKA the tax rates that existed when our economy boomed.
Somehow, this assumption goes unquestioned at a time when we simultaneously wonder why we have huge deficits and why our economy is now faltering. We are so enthralled with preserving the riches of the so-called Masters of the Universe, and those Masters of the Universe have their wealth to buy off so many politicians, that we are now immersed in a culture of willful ignorance. We can no longer learn history's lessons about taxes -- even the lessons that are as crystal clear as this newly released IRS data.
Follow David Sirota on Twitter: www.twitter.com/davidsirota
1 We should root out corruption in Government especially in the DOD. End all the sweet hart deals where universities are doing Gov't sponsored research and then handing it over to industry etc.
2 We could cancel all tax breaks for businesses who make wooden arrows and people who buy race horses and the such thereby raising more revenue.
3 Corporate governance laws could be reinforced so that stock holders (many of them average people or retirement plans) would not be bilked out of returns by these CEOs all of whom are taking these obscene salaries in violation of their legal responsibility to maximize profit for the share holder.
And on, and on, the list goes but I think we should take a holistic approach rather than pile driving one aspect of the problem.
http://www.cbpp.org/cms/index.cfm?fa=view&id=1324
Do you honestly want to increase that even more? Your superficial analysis is blatantly subjective.
It used to be those of us who wanted their superior products and services. It was a fair trade of money for products.
Now the buyers are our Government (with our money), and the middle class and poor. And what we get now are promises (tax cuts), threats (bail outs), and reasons why we should be happy to have a job and are not like the 'lazy' unemployed.
Something happened to quality and useful. Greed has transformed them into junk and threats.
Greed has worked well for Congress, they can now command a higher price for laws and benefits for their backers and patrons. Lobbyists have to pay more but then they get it back in benefits.
Those of us who still have to buy food and other luxuries like toilet paper, can reminisce about the old days when a dollar bought a dollar's worth of goods. Now that same dollar buy about $.10 of goods and our pay since the 1970s is largely unchanged.
Pandora was blamed for letting loose the on this world. She got everything back into the box except for greed which the wealthy keep hidden away in their castles.Only to take greed for a walk now and then though Congress for a show and tell. Or is that a bribe and threat?
The Republicans will be happy with nothing short of a return to 1929...and they will pay any price to get there. That should be clear to not only you, but the entire voting public, by now. If not, perhaps placing the likes of Sarah Palin in the White House backed by a hardcore Republican Congress will do the trick. That way the voters can wonder what happened as they stand amid the smoldering ruins, wondering why no one has a job, a savings account, a retirement account or health care while the top two percent continue down the road to fascism.
Excellent article, David, and pretty much a summary of everything wrong with this country's economic policy for the last 30 years.
and ordinary human people are only their intestinal parasites.
If you don't believe me, check the tax code. Not to mention,
when's the last time a corporation got the death penalty for
mass murder? Or any of its culpable minions? Right. And
any fine they get is deducted straight off the top, just like
all their "living expenses".
There's a new class of citizen and we ain't it.