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The I.R.S. reports that in 2007, that is, before the economic crisis, the top 0.1 percent of taxpayers — roughly speaking, people with annual incomes over $2 million — had a combined income of more than a trillion dollars. That’s a lot of money, and it wouldn’t be hard to devise taxes that would raise a significant amount of revenue from those super-high-income individuals.

For example, a recent report by the nonpartisan Tax Policy Center points out that before 1980 very-high-income individuals fell into tax brackets well above the 35 percent top rate that applies today. According to the center’s analysis, restoring those high-income brackets would have raised $78 billion in 2007, or more than half a percent of G.D.P. I’ve extrapolated that number using Congressional Budget Office projections, and what I get for the next decade is that high-income taxation could shave more than $1 trillion off the deficit.

By contrast, as he notes, the proposal to raise the age on Medicare from its current 65 to 67 would only shave $125 billion over a decade.

Folks, there are 8 times as many savings in raising the taxes of the super wealthy as there is in screwing a generation of seniors.

That is just one example he offers in Things to Tax, his column in this morning's New York Times.

Krugman also supports the idea of a tax on financial transactions.  This one could be quite tiny,

Because there are so many transactions, such a fee could yield several hundred billion dollars in revenue over the next decade.
 It would possibly also have the salutary effect of discouraging some of the computerized wheeling and dealing that has added to the market instability -  which one might consider, as that contributes to the devaluation of the stocks held for longer term investments in places like IRAs.   And as Krugman notes, both Hong Kong and Singapore, rated the two highest on Heritage Foundations index of economic freedom, have such a tax.

His conclusion is important - read this brief paragraph:  

Now, the tax ideas I’ve just mentioned wouldn’t be enough, by themselves, to fix our deficit. But the same is true of proposals for spending cuts. The point I’m making here isn’t that taxes are all we need; it is that they could and should be a significant part of the solution.

Yes they should, and those who insist they shouldn't are not interested in eliminating the deficit.  They want to use to slash social programs because they don't feel obligated to support anything from which they don't obtain a direct and personal benefit.

Taxes are one cost of a civilized nation.  

Unfettered capitalism, with few taxes and even fewer regulations, are antithetical to real liberty and democracy.

Krugman didn't say that in this column.  But he could have.  

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Comment Preferences

  •  Tip Jar (28+ / 0-)

    "what the best and wisest parent wants for his child is what we should want for all the children of the community" - John Dewey

    by teacherken on Mon Nov 28, 2011 at 02:42:31 AM PST

  •  Yes but "those" people will still be getting (2+ / 0-)
    Recommended by:
    Stwriley, GeorgeXVIII

    money for doing nothing. Anyone who spent Thanksgiving with the working class might have noticed that this is still their major problem. "It isn't fair that "those" people get government money".

    I often think that everything else we talk about is BS. A large portion of working class people are willing to crash the whole system over this issue and this issue alone.

    And they are not totally wrong. They drive to work through "distressed" areas where they see people being paid to do nothing. Because we have no use for them.

    Republicans, the slum lords of America. They never fix anything and then blame the tenants when it all falls apart.

    by PowWowPollock on Mon Nov 28, 2011 at 03:19:55 AM PST

    •  What they don't see is the people in (4+ / 0-)

      their gated communities who aren't doing anything either.
      What they don't understand is that the unemployed are serving as an example to them of what happens when you don't meet expectations and prove obedient.  They realize that's the message.  But, they're resenting the messenger because it isn't safe to resent the class (their employers) who sent it.

      People to Wall Street: "LET OUR MONEY GO"

      by hannah on Mon Nov 28, 2011 at 06:13:31 AM PST

      [ Parent ]

  •  Raising taxes on the 1% is what a majority of (4+ / 0-)
    Recommended by:
    DRo, tomjones, Medium Head Boy, Stwriley

    Americans want, but our Congress is willing to ignore the will of the voters in order to hang onto corporate contributions.

    Until Citizens United is overturned, we're not going to see any real solutions placed on the table.

    •  going to disagree slightly (3+ / 0-)
      Recommended by:
      divineorder, Bob Guyer, Loge

      those things are on the table - they are getting proposed in both the House, where they die, and in the Senate, where they are subject to the filibuster.  But they are being proposed, which puts them upon the table.

      "what the best and wisest parent wants for his child is what we should want for all the children of the community" - John Dewey

      by teacherken on Mon Nov 28, 2011 at 04:46:19 AM PST

      [ Parent ]

      •  Perhaps, I've become jaded, but I've lost faith (0+ / 0-)

        in the members of Congress.  I don't see CU being overturned unless OWS becomes powerful enough to force congressional leaders to do the right thing.

        But stranger things have happened.  

        Thanks for the diary.

    •  Pre-Citizens United, it wasn't all sunshine (5+ / 0-)

      and puppies.  The same dynamic was at work: Democrats would have lukewarm support for modestly more progressive taxation, GOPers opposed those measures with every fiber of their being.

      I know CU is the cause du jour, but it isn't some political Theory of Everything.  Its explanatory power is limited, and I don't think it adds anything in this context.

      •  Bill Moyers said this: (0+ / 0-)
        You know capital … raw, hungry capital can, like fire, turn from a good servant into a bad master.

        And if we don’t have ways to temper the ravenous appetite of capital we will keep having repetitions of what we saw in 2008 and ultimately the institutions which Conservatives should respect that provide this brake on human passion and, and excess will crumble. And we will be living in a chaos instead of a civilization.

        and this:

        Our democracy is dysfunctional. It isn’t working. It isn’t solving a single problem. The Senate might as well not be there.

        I think there is no way to downplay the caustic effects of CU.  The problem might have always existed beneath the surface and the leaders of both parties seem to have been corrupt for sometime, but that decision gave a green light to both parties to sell our government to the highest bidders.  And now there is no way to put the genie back in the bottle.

    •  Our system of tax collection is based (1+ / 0-)
      Recommended by:
      divineorder

      on money being moved around.  We cannot collect on what people are hoarding. Keeping the benchmark interests depressed is an effort to get the money moving, but, hope springs eternal, and our constipated conservative friends are sitting tight. The hoard of dollars keeps growing.

      It seems that nobody has called attention to the really unprecedented announcement by the Fed that interest rates would not be increased for two years.  This in contrast to the quarterly conundrum about whether rates would be raised or lowered.

      People to Wall Street: "LET OUR MONEY GO"

      by hannah on Mon Nov 28, 2011 at 06:10:00 AM PST

      [ Parent ]

  •  The Bush/Cheney economy has been very very good... (1+ / 0-)
    Recommended by:
    Bob Guyer

    to a tiny slice of the über-wealthy, while brutalizing the vast majority of Americans. It would be the first, tiny, tenative downpayment on social justice to begin reimposing sensible tax rates on the oligarchs for whom the economy is truly working.

  •  Well, I'm inclined to argue that (2+ / 0-)
    Recommended by:
    divineorder, Bob Guyer

    the problem with the deficit isn't the size, but the fact that the people accustomed to deriving unearned income by financing it with their capital aren't raking it in at the accustomed rate.  You see, back in the glory days of 1990, when too much money in circulation started being addressed, the rate on 30 year Treasury bonds was 8.1%.  Not only was that significantly larger than the current rate for similar bonds (about 2.5%, I think), but that 8% was the benchmark for all kinds of investments with higher risks and an expected much higher return. That's just not happening now, even though the circulation of currency has been significantly reduced and created an artificial scarcity that way.  Banks are even running into resistance in trying to set 25% interest rates on new credit cards, especially those issued to people from overseas, who aren't familiar with the norms.
    Our modern capitalists are after easy money.  They still expect to keep getting more by doing nothing. They are still convinced that money is worth something and simply want to get more and more of it.
    I'm reminded of people who used to collect illustrated manuscripts for their artistic value and the bindings.

    People to Wall Street: "LET OUR MONEY GO"

    by hannah on Mon Nov 28, 2011 at 06:04:06 AM PST

    •  They are confused about creating money v. value (1+ / 0-)
      Recommended by:
      hannah

      I think we have seen a shift into the strange idea that the purpose of creating a business is to create money/profit. The purpose of any business is to create a product or service that provides some tangible value to people. Money is supposed to make exchanging valuable things easier and to act as a temporary store of value for use later. When the investor class acts like money is really value the disconnect between value and money accelerates and we get these bubbles. All anyone has to do to realize how fake the profits of financial institutions like goldman are is to look at their inflated profits every year and ask whether their investments really grew in actual value at that rate. Eventually the delusion is penetrated by reality and the bubble bursts.

      Love = Awareness of mutually beneficial exchange across semi-permeable boundaries. Political and economic systems either amplify or inhibit Love.

      by Bob Guyer on Mon Nov 28, 2011 at 07:47:04 AM PST

      [ Parent ]

  •  The money-spinning and faux-creation on Wall St (0+ / 0-)

    and around the world's financial centers isn't really even capitalism....I was under the impression that capitalism required an investment into something tangible, vs security swaps and derivative options.

    I support a targeted tax increase...but we really need to fix things to go along with it. If you've been irresponsible financially in your household and are in a precarious financial situation, no one would say "make more money and we'll figure out the budget details later."

    Justified anger does not grant you unrestricted license.

    by GoGoGoEverton on Mon Nov 28, 2011 at 06:55:46 AM PST

    •  taking companies public (0+ / 0-)

      or helping them raise money in the debt or equity markets is creating value, and for these markets to work, there has to be some sort of liquid secondary market, but it's clearly the case that the profits from secondary trades have swamped in significance what used to be referred to as "investment banking."

      "This world demands the qualities of youth: not a time of life but a state of mind[.]" -- Robert F. Kennedy

      by Loge on Mon Nov 28, 2011 at 12:27:29 PM PST

      [ Parent ]

  •  Payroll tax needs to be raised back to protect SS. (0+ / 0-)
  •  I was disappointed with Krugman's column (0+ / 0-)

    There is no question that taxes need to be raised, perhaps to LBJ levels. But there are more serious problems, including lack of jobs, falling income from jobs, global warming, lack of population management, . . . As for medical care there are two solutions that will significantly reduce the cost, single payer medicare for all or better yet veterans health care for all.

    For those of you who have never been to a farm you may not get this. Too many, including Paul Krugman are running around like chickens with their heads cut off, a truly amazing sight.

    Practice tolerance, kindness and charity.

    by LWelsch on Mon Nov 28, 2011 at 09:20:00 AM PST

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