David Brooks is always a good marker of establishment conventional wisdom. Today, in a column grandly entitled, "A Tax Reform Vision," Brooks celebrates the growing beltway consensus on tax reform, suggesting that a bipartisan accord could be built around lowering tax rates, simplifying the code, and erasing most tax deductions and loopholes. He touts a bill put together by Senators Ron Wyden (D-Oregon) and Judd Gregg (R-New Hampshire) that is far more sensible than the more extreme version offered up by the co-chairs of the president's deficit commission. It would lower rates, eliminate loopholes, and end with a tax code that is a bit more progressive and raises a bit more money. If the Republican wingnuts will sign on -- although there is no sign that they will -- progress could be made. Irresistible.
Only we really have played this game before. In the mid 1980s, under Ronald Reagan, civic minded Senator Bill Bradley joined with reformers to fashion a similar deal -- lower rates, eliminate egregious tax loopholes and deductions, in a revenue neutral fashion. The establishment rallied; the bill passed.
Only while the deductions were eliminated, the lobbies that created them were not. They went to work. The loopholes, tax expenditures, various dodges returned. Now the tax code is so riddled with them, that beltway pundits can call for playing the same game once more.
Only while the loopholes returned, the lower rates stayed largely in place. The effect? By 2006, the top 1 percent of Americans (average net worth of about $15 million) pays rates fully one third lower than they did in 1970. The top 0.01 percent -- we're talking multimillionaires here -- pays less than half as large a share of their income. This has had staggering effect. Jacob Hacker and Paul Pierson show in their compelling study, Winner Take All Politics, that in 2000, the top one-tenth of 1 percent of Americans now capture a stunning 7.3 percent of all national after-tax income. If they were paying taxes at the same rate as they did in 1970, they would capture "only" 4.5 percent in after tax income. Over one third of their added after-tax income share comes from lower taxes.
We now suffer the worst inequality we've witnessed since the eve of the Great Depression. This inequality undermines our democracy, as concentrated money becomes concentrated power. But it also undermines our economy -- when the few capture so much, the many are strapped, demand for goods declines, companies have over capacity, workers get laid off, the economy suffers.
Alan Simpson, the egregious co-chair of the President's Commission, postures his plan as courageous in opposition to the "greediest generation" that would make no sacrifice. But his plan for deficit reduction begins by lowering top end tax rates once more, playing the same game again. And it seeks budget balance by cutting spending far more than by raising revenues.
Simpson can't bear to level with Americans about the real deal. The inescapable fact is that we need to be investing more at the federal level, not less. Our core infrastructure is literally falling apart. Our schools are unable even to provide the basics to every child. Our colleges are growing less not more affordable, even as advanced training or education becomes ever more important. We're defaulting in the crucial competition to gain leadership in the new green industrial revolution that will define the growing markets of the world. Our safety net -- support for the poor, training and support for the unemployed, affordable and skilled child care for working mothers, retirement security for the elderly -- is shamefully inadequate.
We need very different priorities, far greater discipline, much less waste, but we also need tax reforms that raise revenue. We need to raise rates on the top, tax the wealthiest Americans as they used to be taxed, and use that money to rebuild the economic infrastructure of this country, generating the growth that is the prerequisite to bringing down the debt.
These are simple truths. They are largely unspeakable in conservative Washington, and certainly among a beltway establishment comfortable with the extremes of wealth and cushioned against the terrors of economic recession and insecurity.
Do we have to fall for the same game again? Charley Brown is a lovable chump. Each year, Lucy promises to hold the ball for him to kick. Each year, he trusts her, runs up and takes a mighty swing. Each year, she pulls it away and he falls on his back. We adore him for his trust, his abiding innocence, and his faith in the good will of others. He's a lovable chump. But he ends on his back. We don't really need to fall for the con again do we?
Follow Robert L. Borosage on Twitter: www.twitter.com/borosage
The inequity in distribution of wealth in the U.S. is now greater than at any time since the great depression.
The richest 2% pay a THIRD less in taxes than they did in the seventies.
What is wrong with this picture? This: it was to be expected as we suffered through eight years of Bush/Cheney. It was NOT expected to continue, under a Democratic administration and Congress.
I am *just now* giving up on Obama, after being first an enthusiastic supporter, then a hopeful defender, then a cautiously optimistic excuse maker.
There is *No* excuse for the road this administration has taken us down. Democrats in the Senate also deserve a good deal of blame, as they've allowed ReThug posturing and threats of parliamentary maneuvers to back them down from the liberal positions that poll after poll shows the American people support.
Only the House, under the skillful leadership of Nancy Pelosi, has not let us down. And now that's gone, as of Jan. 1st. Give me a genuinely liberal/progressive candidate to challenge Obama in 2012, and I would definitely vote for that candidate, in the primaries. Someone with an actual change of shaking things up and moving the Democratic party back to the left, where it belongs (sorry Dennis Kucinich, I love you but no one would pay attention).
Howard Dean, are you listening? I know, it wont happen.
The result I have seen is that those at the top now have a much higher % of all income.
The rate cuts at the middle and bottom have helped to slow their loss of real wages which have been reassigned to the top.
The fact that the rich have been able to pay for government special treatment in the past is no reason to continue the practice.
US STATE Senators:
http://www.senate.gov/general/contact_information/senators_cfm.cfm
US STATE Senators Committees
http://www.gpoaccess.gov/congress/senate/sencom.html
United States Committee On TAXATION!
Titled: The JOINT COMMITTEE ON TAXATION.
http://www.jct.gov/
US REPRESENATIVE / Members of the US HOUSE OF REPRESENATIVE
The U.S. House of Representatives - Determining Your Representative
http://www.house.gov/zip/ZIP2Rep.html
Let Remind Congress they have been elected to SERVE THE PEOPLE, NOT BIG BUSINESS, NOT THE RICH, BUT ALL THE PEOPLE EQUALLY! We can't Afford Loosing Any More TAX DOLLARS!
How ~ TO CONTACT ~ DO An Internet Search ~ See who your ~ US State Senators / US Representatives for Your State by Zip Code you Live within.
FLOOD their In BOX~ LET THEM HEAR OUR ROAR!
They who are to be Representing Each State in Congress. US STATE Senators & US REPRESENATIVE Work together Yet Separately ~ within Committees & Subcommittees. They MUST Researching the FACT ~ DO WHAT MUST BE - BE RESPONCIBLE!
People - we all need to write to Senate majority leader Reid and convince him that under no circumstances should any further tax legislation by brought up for a vote! Period! Let the bush tax cuts expire, FOR EVERYONE! You can have my extra $600 a year and I'll forgo a couple of Starbucks a week.
And the narrative is simple " we tried to extend the tax cuts for the middle class and the republicans refused to support that effort, these cuts were established with an expiration date because we borrowed $1.4 trillion to fund them for 10 years. The 10 years are up. The cuts provided no additional revenues, no additional jobs and were never paid for. We cannot afford to borrow more money to extend them for everyone, so they will expire. Next piece of business..."
Please some one tell me what the blinding light is? I feel like I will have a nervouse breakdown if I have to explain it one more time. May God have Mercy!
People - we all need to write to Senate majority leader Reid and convince him that under no circumstances should any further tax legislation by brought up for a vote! Period! Let the bush tax cuts expire, FOR EVERYONE! You can have my extra $600 a year and I'll forgo a couple of Starbucks a week.
And the narrative is simple " we tried to extend the tax cuts for the middle class and the republicans refused to support that effort, these cuts were established with an expiration date because we borrowed $1.4 trillion to fund them for 10 years. The 10 years are up. The cuts provided no additional revenues, no additional jobs and were never paid for. We cannot afford to borrow more money to extend them for everyone, so they will expire. Next piece of business..."
American made products web site:
http://wwwÂ.americansÂworking.coÂm/
Letting the current tax rates expire on the upper income brackets will simply take more money out of the private sector economy. You don't increase jobs by decreasing the amount of money in the private sector economy. You increase jobs by increasing wealth; and that is done by producing, for a profit, goods and services that people want and need. It is the increased consumption of those goods and services that provides economic growth.
To get that increased consumption, both consumers and businesses must have a secure economic environment, they won't spend or generate the demand that increases jobs unless they do. Obama care and the so called Financial Regulatory bill have decreased the economic security that is necessary for the economy to grow, and we are seeing result.
Increasing the taxes on anyone will simply redistribute wealth from you state and mine to the Federal government, making the states weaker an the Fed stronger, along with hurting the economy. I'd just as soon keep the money in your and my and others' states, where it will do the most good.
The fact of the matter is that the rich would NOT BE RICH were it not for the government, and therefore they need to pay their fair share just like the rest of us! And in fact, THEIR fair share is a LOT MORE because they get a LOT MORE from the government!
So its better to surrender (when one does not have the votes) and seek a victory on other issues which otherwise would not be there.
If it were up to me, I would let ALL the Bush tax-cuts expire; and reduce the debt by 4 trillion dollars over 10 years.
ANYTHING!
We could continue with the current system of no taxes on basic foods, clothing, shoes and essential items.
Therefore I am taxed on 100% of my income. Probably true up to about $30,000.
If I make $300, 000, I will both save and invest a portion of that. This increases with earnings. My taxes could be on 50% of my income or even less as the level rises. This is a great plan for the wealthy, NOT for the rest of us.
Why is the economy in Texas and Louisiana doing well while California and the economies other blue states that are trying to tax their way out of economic problems are failing? Taxes increase the cost of doing business. High confiscatory taxes make businesses uncompetitive in US markets and foreign markets. Faced with that in one state businesses that want to survive and prosper move to states they can operate without excessive taxation and an expensive regulatory atmosphere. It seems a lot of states and cities put big entitlement expensive programs in place then want someone to pay for them.
I once talked to a businessman from France who owned 3 businesses. All were located outside of France because of France's tax and regulatory laws. He was creating jobs for people in Turkey, Algeria, and Morocco instead of France because if he didn't he would essentially lose control of those businesses to the French Government who would tell him who to hire, how much to pay them, and just about everything else under the sun. He operated for a while in France then moved his highly profitable and growing businesses out of France, leaving behind scores of unemployed workers.
CA's suffering economy might have a bit to do with the fact that the state budget got wiped out by Republican efforts to privatize and deregulate. Doesn't anyone remember Pete Wilson's Electricity deregulation con? That's when the state went bust. Higher taxes are inevitable in the wake of that sort of bad governance. Somebody will have to pick up the tab and that's a good reason for those who can afford to to go elsewhere.
So I'm heading to Somalia. I've had it with all these taxes and fees. I'm certain a tax-free society will invigorate a tremendous and pure capitalism which will help me lead a much more safe, productive, and unstressed life. I'm very excited to move to paradise.
Kindly forward your awesomely shallow French friend's contact info so I can open an office for him down in Mogadishu.