It’s clear that the GOP love “middle class” tax cuts that benefit the rich and hate “boutique” tax cuts that benefit the poor and middle classes.
Remember when the Forbes on Fox panel mostly voted for tax cuts over food stamps? When tax cuts were touted as the way to help the middle class? Apparently, what the Fox News pundits really wanted was tax cuts for the upper class, only. Now that the Tax Policy Center has projected that about 47% of Americans will pay no federal income taxes, those very same Forbes on Fox folks are up in arms with accusations that the lower and middle classes are not paying their fair share. One panelist even suggested this will lead to increased youth suicide…
…“That nanny state is already here!” Host David Asman began in his introduction to the discussion, before adding, “more Americans are getting more handouts than ever before…Less folks paying, more folks receiving, hello nanny state!”… [emphasis added]
Inserted from <NewsHounds>
However, as much as the GOP Reichsministry of Propaganda foams at the mouth, they do not have a clue about the real problem, of if they do, they are not telling.
The real problem is the gross inequity that has developed in out country, the worst in history. Sure there are wealthy people in stable economies. But consider the analogy of a pyramid. In a stable economy, the conspicuously wealthy capstone must be supported by a prosperous base. If the capstone gets so heavy that it crushes the base, the economy collapses. This is what happened in 1929, and almost just happened again, as the following chart (credit: The Nation) shows.
(click image to view full size)
Note that the top chart, which measures income inequality, demonstrates that it has never been worse, and the only time in our history that it has ever approached its current level was the spike that caused the Great Depression.
The bottom chart measures the top marginal tax rate. Note that when the GOP dropped the top marginal tax rate in the twenties, eighties, and during the Bush/GOP regime, income inequality shot up. On the other hand, high marginal tax rates during the middle of the century, held income inequality down and kept the economy stable and prosperous for all.
Now lets look at how income inequality is crushing the base using the next chart (credit Crooks and Liars).
As you can see, the top 1% get 24% of the income, the next 9% get 26% of the income, while the bottom 90% get only 50%. The numbers are even worse for accumulated wealth.
The bottom 40% of Americans own only 1/5 of 1% of the wealth, that tiny sliver.
If you haven’t noticed by now, the conditions are exactly the same now as they were right before the Great Depression. We just barely averted another through massive government spending on the rich to bail them out of the consequences of their rapacious greed. However, we have not changed the conditions that caused it. The housing bubble was not the cause. It was the trigger. The cause is unchanged, waiting for the next bubble, whatever it is, to trigger disaster. Only by correcting the cause can we avert the disaster.
To this end, I suggest a complete revision of the tax code as follows.
|
Progressive
|
Tax
|
Table
|
Politics
|
Plus
|
|
From
|
To
|
Rate
|
Max This
|
Max Total
|
|
$0
|
$50,000
|
0%
|
$0
|
$0
|
|
$50,000
|
$100,000
|
10%
|
$5,000
|
$5,000
|
|
$100,000
|
$250,000
|
20%
|
$30,000
|
$35,000
|
|
$250,000
|
$500,000
|
30%
|
$75,000
|
$110,000
|
|
$500,000
|
$750,000
|
40%
|
$100,000
|
$210,000
|
|
$750,000
|
$1,000,000
|
50%
|
$125,000
|
$335,000
|
|
$1,000,000
|
$5,000,000
|
60%
|
$2,400,000
|
$2,735,000
|
|
$5,000,000
|
$10,000,000
|
70%
|
$3,500,000
|
$6,235,000
|
|
$10,000,000
|
$25,000,000
|
80%
|
$12,000,000
|
$18,235,000
|
|
$25,000,000
|
$1,000,000,000
|
90%
|
$877,500,000
|
$895,735,000
|
This needs some explanation, as it is completely different from what we have today.
Everyone pays no tax on their first $50,000 in income, no matter how much they make. Everyone pays 10% on up to their second $50,000 in income. So the family making $100,000 pays nothing on the first $50,000 and $5,000 on the second $50,000 for a total of $5,000. A family making $350,000 pays nothing on their first $50,000, $5000 on their second $50,000, $30,000 on their next $150,000, and $30,000 on their last $100,000 for a total of $65,000. A family making a million pays $335,000. The top category is actually $25,000,000 up, but I capped it at $1 billion, because infinity gives spreadsheets heartburn. Even the family earning $1 billion gets to keep over $104 million. I could live on that. Couldn’t you? These numbers are not set in stone, and I can already tell they need to be tweaked, but it’s the concept I’m driving at. Increasing taxes in progressive increments like this has everyone but the very poor paying a fair share and minimizes the gross inequality of income distribution. However, it preserves the incentive to earn, because earning more always results in keeping more.
So you be the judge? Should we fix the problem or face the consequences of leaving it as is?
This idea is completely original. However, I learned many years ago in Philosophy 101 that ancient Greeks had the audacity to steal most of my best ideas thousands of years before I was born. So, if you had my idea and stole it before I thought of it, may the ghost of Michelle Bachmann haunt your descends until the end of time.. 😉
Scientists have made a fundamental breakthrough in their attempts to replicate photosynthesis – the ability of plants to harvest the power of sunlight – in the hope of making unlimited amounts of "green" energy from water and sunlight alone.
