The rich are getting richer. Their effective tax rate, in recent years, has been reduced to the lowest in modern history. Nurses, teachers and firemen actually pay a higher tax rate than some billionaires. It's no wonder the American people are angry.
Many corporations, including General Electric and Exxon-Mobil, have made billions in profits while using loopholes to avoid paying any federal income taxes. We lose $100 billion every year in federal revenue from companies and individuals who stash their wealth in tax havens off-shore like the Cayman Islands and Bermuda. The sum of all the revenue collected by the Treasury today totals just 14.8% of our gross domestic product, the lowest in about 50 years.
In the midst of this, Republicans in Congress have been fanatically determined to protect the interests of the wealthy and large multinational corporations so that they do not contribute a single penny toward deficit reduction.
If the Republicans have their way, the entire burden of deficit reduction will be placed on the elderly, the sick, children and working families. In the midst of a horrendous recession that is already causing severe pain for average Americans, this approach is morally grotesque. It's also bad economic policy.
President Obama and the Democrats have been extremely weak in opposing these right-wing extremist proposals. Although the United States now has the most unequal distribution of wealth and income of any major industrialized country, Democrats have not succeeded in getting any new revenue from those at the top of the economic ladder to reduce the deficit.
Instead, they've handed the wealthy even more tax breaks. In December, the House and the Senate extended President George W. Bush's tax cuts for the rich and lowered estate tax rates for the wealthiest Americans. In April, to avoid the Republican effort to shut down the government, they allowed $38.5 billion in cuts to vitally important programs for working-class and middle-class Americans.
Now, with the U.S. facing the possibility of the first default in our nation's history, the American people find themselves forced to choose between two congressional deficit-reduction plans. The plan by Senate Majority Leader Harry Reid, which calls for $2.4 trillion in cuts over a 10-year period, includes $900 billion in cuts in areas such as education, health care, nutrition, affordable housing, child care and many other programs desperately needed by working families and the most vulnerable.
The Senate plan appropriately calls for meaningful cuts in military spending and ending the wars in Afghanistan and Iraq. But it does not ask the wealthiest people in this country and the largest corporations to make any sacrifice.
The Reid plan is bad. The constantly shifting plan by House Speaker John Boehner is much worse. His $1.2 trillion plan calls for no cuts in the wars in Afghanistan and Iraq, and it requires a congressional committee to come up with another $1.8 trillion in cuts within six months of passage.
Those cuts would mean drastic reductions in Social Security, Medicare and Medicaid. What's more, Mr. Boehner's plan would reopen the debate over the debt ceiling, which is now paralyzing Congress, just six months from now.
While all of this is going on in Washington, the American people have consistently stated, in poll after poll, that they want wealthy individuals and large corporations to pay their fair share of taxes. They also want bedrock social programs like Social Security, Medicare and Medicaid to be protected. For example, a July 14-17 Washington Post/ABC News poll found that 72% of Americans believe that Americans earning more than $250,000 a year should pay more in taxes.
In other words, Congress is now on a path to do exactly what the American people don't want. Americans want shared sacrifice in deficit reduction. Congress is on track to give them the exact opposite: major cuts in the most important programs that the middle class needs and wants, and no sacrifice from the wealthy and the powerful.
Is it any wonder, therefore, that the American people are so angry with what's going on in Washington? I am too.
Mr. Sanders, an independent senator from Vermont, is a member of the Senate Budget Committee and the longest serving independent in congressional history.
Cross-posted at The Wall Street Journal.
Follow Sen. Bernie Sanders on Twitter: www.twitter.com/senatorsanders
The real problem is not income tax inequality, its consumption and activity tax inequality. The other taxes. The taxes that affect what you do, what you buy, sell, lease or rent and where your activity is located. Loans seem to be free tax friendly. Is someone promoting them?
Some areas (manufacturing in particular) are dependant on inputs that are badly taxed. Take for example transport, which has a heavy dependance on energy cost. If the government taxes petroleum or gas, that does not affect the oil companies, it will affect their customers and finally the consumer.
Taxing law is a byproduct of lobbying. Inequaltiy is not between rich and poor, labor or corporate, but between interest groups. Sectors of the economy. The financial industry is having a free ride this time. They basically pay profits on results, not on activity or location.
Manufacturing/agriculture/services, have a bad day. They are really paying the bill as taxes affect day to day activity, not only the benefits.
Manufacturing and agriculture will be ruined with the next big tax tsunami that is coming.
If the Republicans have their way, the entire burden of deficit reduction will be placed on the elderly, the sick, children and working families. In the midst of a horrendous recession that is already causing severe pain for average Americans, this approach is morally grotesque. It's also bad economic policy."
Where in the hell did you come up with this? The majority of Americans pay ZERO taxes. The large corporations and their rich employees/owners pay all of the taxes. How can they not contribute to deficit reduction when they are the only ones who do?!
With regards to this "grotesque and bad economic policy," who do you think is placing the burden on the country? The working? No, its the elderly, the sick, and the unemployed. Take away the free ride and they will figure out a way to make money, hell, they might even go find work!! **GASP**
I'm 23 and i'm sick of it being my responsibility to take care of people I don't even know, or care about. I hope this house of cards doesn't fall apart completely, but if it does.... I'm movin to Mexico and enjoying the simple life!!
Perhaps a stint in Mexico may help you reacquaint you with taxation.
Hasta la vista and sayonara
http://www.nytimes.com/2010/04/14/business/economy/14leonhardt.html
and i found you a NY times article so don't say it's biased towards liberals. And most "smart" independents and conservatives state this FACT a whole lot.
Why do liberals discredit anything that opposes them or their opinion, by saying something more stupid than their own argument? "Perhaps a stint in Mexico may help you reacquaint you with taxation."
Interesting statements about the sick and the old. Does he plan to hire my 89 year old Grandfather who has alzheimers with all this largesse he will have from not paying is 23 year old taxes? How about the schizophrenic down the street? We should put him in construction in charge of the nail gun! Safety nets are there for a reason.
I can pretty much guarantee if he loses his job tomorrow, this guy will be down at the unemployment office like every other conservative I know who's been laid off or mooching off his parents.
He threw them a line, and they hung themselves with it. I'm voting him a better team. By election day, I'll have my grocery list all ready. And yes, he has a long term strategy, but it makes too much common sense.
There's only one answer to solve this problem, our government has to issue our own currency. To hell with the Federal Reserve - either eliminate it or nationalize it. Private bankers are controlling our money supply and becoming bloody rich off of it - while the rest of us are watching our standard of living drop as we lose our jobs, homes, and dreams.
Thomas Edison and Henry Ford both told a reporter back in the 30s that if the government can issue bonds, they can issue dollars. Edison explained how this works in an article found here: http://www.michaeljournal.org/appenD.htm
For more information on this issue, visit http://www.monetary.org/ or read this article right here on the HuffPost: http://www.huffingtonpost.com/stephen-zarlenga/greening-the-dollar_b_897727.html
We must do this or this great nation will collapse within the next decade, perhaps the next few years.
Most pervasive, tying these ideas together is the rise of the Ayn Rand libertarian movement these all share. Like Marxism their ideology has some elements of truth but result in a dismantling of the New Deal welfare state, kind of social Darwinism to allow excellence. This is Alan Greenspan, the deregulating advocates that opened the gates that were then rushed by the Ken Lays and real estate pyramid scheming Wall Street bankers of the world. Duh, Mr. Greenspan, maybe your were wrong about how the world works.
We have a serious problem in this country. Studies have shown that policies favored by democratic candidates are more popular, yet republicans keep getting elected.
I'm really worried about 2012.
December 21, 2012 isn't the end of the world... it's the end of the middle class.
At least, if politicians allow our economy to fall into the current state it's in, they should be forcibly removed, or have to suffer X amount of years without pay.
First thing I learned in accounting: assets=liabilities+equity; not "assets is less than liabilities plus equity". If government was a small business they would be "out of business".
They are rarely if ever charged... let alone convicted when found being guilty of wrong doing. They refuse to hold any investigations that they feel might incriminate themselves or their colleagues... or they just pass legislation that makes it legal for them to do things that would otherwise be criminal for the ordinary citizen... (Bribery = Lobbying) (Extortion = Taxes) (Loan Sharking = banks paying 1% interest to borrow money from citizens... while charging 8 to 25% for citizens to borrow money from the bank).
Tony Soprano is probably shaking his head... wishing he could get into the government rackets.
Geesh, look at all the politicians during the last election that got bad publicity... because they didn't even bother to pay their taxes.
Many of the leaders in Washington come from, or have ties to major corporations... so expecting them to cut the tax loopholes or cut subsidies... is like expecting them to slash their own wrists. Just look at all the people who have run for mayor or governor... that come from big business.
You may come to Washington as an individual with great ideas to make the country better... but in the end... you end up becoming a "Stepford Wife".
One of the big problems is the huge amount of money it takes to win office. I know if I got large amounts of money from some people or companies, it would be very hard to feel I didn't owe them *something.*
Another corollary to that is the huge amount of money candidates spend on media ads. And while newspapers will still endorse candidates, it means more generally that the media will not want to lose those huge ad bucks and will be less likely to do really intensive investigations of candidates that could turn up things they don't really want known. That trivializes our election process.