"If the government cannot collect its taxes, a man is a fool to pay them."
J. Pierpont Morgan.
"There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning."
Warren Buffett.
A lawyer friend states why you SHOULDN’T HELP PUSH People’s Lobby’s Congressional Fair Tax Bracket Reinstitution Act (FTBRA) forward.
"Listen you are hanging around too many stupid people. I work hard and I spent long years in school after dropping out of high school. And because I did not like where I was I worked even harder. So to hell with your income distribution crap...GO GET EDUCATED OR A JOB AND THAT IS THE ANSWER........... AND by the way where do you think job creation stems from? YA... I know, you think the gov't should do that.
First, some economic history, which I guess many lawyers don’t study, which laid the economic foundation under which Americans today labor, search for jobs, and borrow for an education.
Who do you think wrote the following and when?
The authors note the following unintended consequences of what was billed as humanitarian aid to the poor. Foreign aid has:
• Aggravated food shortages in some countries; reliance on food imports from the United States has discouraged home production.
• Subsidized sweatshop factories and textile mills in South Korea; instead of raising standards of living, as was intended, the sweatshops have lowered it, paying from 10 to 30 cents an hour.
• Entrenched the rich and powerful in foreign countries by aiding businesses controlled by them, thus widening instead of narrowing the gap between the rich and poor.
• Generated windfall profits for business and financial interests in this country.
• Led to the building of a gaming lodge in Kenya and a luxury hotel in Haiti with $150-a-day rooms, whereas the intent was to stimulate private investment that would aid the poor.
• Created a powerful foreign-aid lobby in this country made up of corporations, financial institutions, colleges, and others who benefit by funds appropriated for overseas relief.
Mega corporations’ 2010 profits are at astounding record setting highs. Heralded Supply Side Economics Trickles Down -- only maybe -- when you can’t afford an umbrella and you and family are living – or about to -- on a curb. Families scrambling for 1st, 2nd, and 3rd part-time jobs are being booted from their homes by a scamming financial services industry, whose lobbying power allowed them to merge, set up ponzi schemes, fabricate credit default swaps, induce phony credit ratings, and -- upon their exposure and failures -- get bailed out by taxpayers dollars; with which many banksters paid themselves huge bonuses. It’s magic, like in Voodoo Economics.
So, from whom and when did the above quoted words come?
If you answered the Rape of the Taxpayer, published in 1972 by Philip Stern, you are probably not an attorney and didn’t read his other books – Great Treasury Raid (1962) and the Best Congress Money Can Buy (1988). Here’s more from a guy who sternly studied the history of tax and economic rape as reporter, newspaper owner, author, philanthropist, and founder of the Fund for Investigative Journalism.
Consider chapter 19, "Letter from an Indignant Taxpayer." This is a letter actually sent on August 9, 1972, by Philip Stern’s secretary to Chairman Wilbur Mills of the House Ways and Means Committee and to Chairman Russell Long of the Senate Finance Committee. The letter tells what she has learned by typing Stern’s book at a salary of $150 a week. On the $7,800 she earned in 1971, she paid federal income taxes of $1,057.50. She asks why she has to pay nearly 14% of her earnings when some millionaires get off for practically nothing. Granted the case of J. Paul Getty is an extreme one, but it certainly impressed Ms. Saunders. He is said to be worth over a billion dollars and reportedly earned up to $300,000 a day during the early sixties. Yet from what President Kennedy told two senators, Getty paid only a few thousand dollars in tax. She goes on to recite instance after instance, all documented in her boss’ book, of loopholes that favor the rich. She also reminds Senator Long of how insistent he has been that welfare recipients ought to do a minimum of work. They might, he suggests, clean up "their filthy neighborhoods." Why, then, is Mr. Long not bothered by the fact that those who get what amounts to a free gift in tax savings are not required to do any work? Specially privileged capital gains and tax-free municipal bonds are prime examples of work-free welfare. She proceeds to ask similar questions about the billions that corporations like General Motors and IBM will save over a period of years by investment credit and such wonders as "asset depreciation range."
"That’s old crap!" my lawyer friend will probably say, and not bother researching policies when he can be told by Rush, an inflammatory, un-researched, consistently factually wrong oxycotin-contented talk show host, compensated at over $58 million per year, that taxing him and those like him will kill jobs.
So, even though well-researched tax expert Philip Stern pointed out four decades ago that "America’s richest 3,000 families get an average of $720,000 in tax welfare," my attorney friend will probably find such facts worth ignoring. And he’ll ignore Warren Buffet decrying the inequity that allows him to pay a 17% effective tax rate while his secretary pays 30%. Ah, for generations from Getty to Buffet not much has changed to reward the bulk of hardworking Americans and make the race for family security a little fairer.
Richer Animal Farm
What have those upward re-distributional Animal Farm tax policies done for America’s once envied Middle Class?
Well, much more of the shrinking Middle Class has increased their marginal propensity to consume (MPC) to 100%, meaning they are spending all they earn. That’s good for stimulating the economy, when your economy is creating solid Middle Class incomes. Problem is the shrinking Middle Class is working a lot more, getting paid a lot less, falling into debt, seeing fewer opportunities for their initiative to pull them out, and being snookered by big interests and media as to causes and answers.
America grew strong as a "Demand Side Economy" that grew a larger and larger Middle Class whose MPC was reasonable. With their savings, Americans could grow small businesses. America started weakening when they bought into the illogical theory or lies that we were a "Supply Side Economy," which moved our production toward lawyers, lobbyists, foreign shores, and financers that fabricated gambling words that started rotting more than just our physical infrastructure.
Supply Rich Side Economics
Supply Rich Side Economics and lobbied tax codes strengthened the uber-rich, which gave us more yachts, jet setting lifestyles, and palatial domestic and foreign estates. The benefiting uber-rich bought and are buying tax-free bonds, debt, and foreclosed properties, while Middle Class opportunities disappear as income and wealth cascades to the top.
* Income gains have been even more pronounced among those at the very top of the income scale. The incomes of the top one-tenth of 1 percent (0.1 percent) of U.S. households have grown more rapidly than the incomes of the top 1 percent of households as a whole, rising by 94 percent — or $3.5 million per household — since 2002. The share of the nation’s income flowing to the top one-tenth of 1 percent of households increased from 7.3 percent of the total income in the nation in 2002 to 12.3 percent in 2007. This is the highest level in the Piketty-Saez data going back to 1913, surpassing even the previous peak in 1928.
* The effective federal income tax rate for the 400 taxpayers with the very highest incomes has declined by nearly half over the past two decades, even as their pre-tax incomes have grown five times larger, new IRS data show.
* The top 400 households paid 16.6 percent of their income in federal individual income taxes in 2007, down from 30 percent in 1995. This decline works out to a tax cut of $46 million per filer in 2007, or a total of $18 billion in tax cuts for these households per year.
* To make it into the top 400, a household needed an adjusted gross income of at least $35 million in 1992 (in 2007 dollars) and $139 million in 2007.
Center on Budge and Policy Priorities
Meanwhile, a Study by University of Chicago professors Steven Kaplan and Joshua Rauh points out that Inside the top 1 percent the disparity continues between overpaid CEOs, on the one hand, and Wall Street financiers – hedge-fund managers, private-equity managers (think Mitt Romney), and investment bankers – on the other. More than twice as many Wall Street financiers are in the top half of 1 percent of earners as are CEOs. The 25 highest paid hedge fund managers are paid more than the CEOs of Standard and Poor’s 500 largest companies combined. Over decades, CEO pay has grown to be outrageous, especially when compared to workers’ pay. So, how far beyond outrageous is hedge and private-equity pay, where several of these fund managers/gamblers are taking home more than a billion dollars a year.
Do you think a well-researched lawyer could make a strong case that our well-lobbied tax policy has been redistributing income, wealth, and opportunity upward for a long time?
America’s best paid, who escape taxes making 100’s of millions and more, are those who set up the incomprehensible-to-most Credit Default Swaps (CDS) and Collateralized Debt Obligations, (and CDO) etc. They should have been taxed just on principle, for doing much less honest work than Philip Stern’s typist, my mom the retail clerk, or James the mechanic. But, unfortunately, most Americans, like a frog being cooked in a warming kettle, have not paid attention to how long and drastically Uncle Sam has been snookered into allowing income, wealth, and consequently opportunities for growth to be redistributed to the obscenely comfortable at the itty-bitty top.
Rolling Stone’s Matt Taibbi offers a response to my attorney friend who probably believed Robin Hood should have only been allowed some gripping and maybe a few arrows for shooting sparrows, but not legislation to help his serfs and farmers build peaceful villages, schools, shops, and decent lives.
By creating an urgent crisis that can only be solved by those fluent in a language too complex for ordinary people to understand, the Wall Street crowd has turned the vast majority of Americans into non-participants in their own political future. There is a reason it used to be a crime in the Confederate states to teach a slave to read: Literacy is power. In the age of the CDS and CDO, most of us are financial illiterates. By making an already too-complex economy even more complex, Wall Street has used the crisis to effect a historic, revolutionary change in our political system — transforming a democracy into a two-tiered state, one with plugged-in financial bureaucrats above and clueless customers below.
For generations the super rich have been accumulating uber-riches without working harder or relying on stellar character. They link their unearned increased income, capital gains, and dividends with inherited and accumulated wealth and connections to fill the halls of Congress with well-paid lobbyists, who write laws that benefit them. This allows them to gamble and play rather than work simply and honestly, as most successful small business people do. While the rich and powerful dominate our tax and economic policy, hard working Americans are among those losing their earning and educational opportunities, while the mega-rich and giant corporations accumulate more power and wealth.
If you think something’s wrong with this country’s income and wealth disparity, why not push Congress to start fixing it by introducing PLI’s and Fair Tax Bracket Reinstitution Act (FTBRA).
Play better poker
Congress and Mr. President, with a depression still looming, don’t fiddle with your minuscule and taxing poker hand that doesn’t address much of the massive and growing Middle and Lowering Class needs. Raise the ante. Quit playing the 3% marginal tax increase as your only hand. Play a stronger hand and call for the kind of Fair Tax brackets that helped grow the Middle Class through the 50’s, 60’s and 70’s. Send People’s Lobby’s letter/petition to Congress in search of inspiring more Congressional representatives to become courageous public finance and policy visionaries. And don’t forget to help your tax policy challenged attorney friends along the way.
You can also send the letter, read the Fair Tax Bracket Reinstitution Act (FTBRA)and AWSC Congressional Proposals, and learn more by clicking to www.PeoplesLobby.us and www.WorldServiceCorps.us .