Don't know if anyone's read the IPC's excellent plan to address the bailout but I think THIS is how whatever final plan gets passed should be paid for. Americans don't want to pay for the greed and avarice of the wealthy elite. They shouldn't have to. With IPC's ideas, they won't have to.
Just don't stand too close to any conservatives when you tell them this plan. Their heads will explode. You see, this plan not only is fiscally responsible and morally just, but it explodes the entire conservative philosophy (mythology?) at the same time.
But first, to the plan:
A Responsible Plan to Pay For Recovery: $900 billion in New Revenue
Below is our ten-point program to pay for this broader bailout. This plan would generate $900 billion a year until the costs of the bailout and stimulus program are paid for.
- A Securities Transaction Tax: $100 Billion.
A fair plan to pay for the bailout should include a modest financial transactions tax on the buying and selling of stock and other financial products. A penny on every $4 invested would generate $100 billion a year. Other European countries already tax stock transactions, and these transaction taxes effectively discourage speculation.
- A Wealth Tax Surcharge on Households with $10 million: $300 billion
Congress should institute a modest wealth tax surcharge on households with net worth over $10 million. These households currently own and control over 20 percent of the nation’s private wealth. They have realized huge gains from the manipulation of capital markets and the asset bubbles that created the current crisis. A modest surcharge — no more than 3 percent — could generate over $300 billion.
- A Corporate Minimum Income Tax: $60 Billion
In August, the Government Accountability Office reported that two-thirds of U.S. corporations paid no income taxes between 1998 and 2005. These corporations paid nothing toward our shared expenses of defense, environmental protection, public health, and education. Ordinary taxpayers should not be left holding this bag. A minimum corporate income tax should contribute toward the bailout.
- A ‘Disgorgement’ Recovery from Profligate CEOs: $40 Billion
Until several weeks ago, top CEOs and managers were collecting massive salaries and fees while they told the rest of us that "everything is fine." These CEOs gorged themselves and have taken the money and run. The four biggest investment banks on Wall Street shelled out $30 billion in bonuses last year. One of them, Lehman Brothers, has just gone under. Another, Bear Stearns, was bailed out earlier this year. To help pay for recovery, the new Treasury authority should seek the payback of executive compensation inappropriately extracted in the years before the Wall Street meltdown.
- An Income Tax Surcharge on Incomes over $5 Million: $105 Billion
A portion of the bailout cost should be financed with an emergency income tax surcharge on incomes over $5 million. Wealthy investors have been the big winners in the unregulated bubble economy. They have watched their incomes skyrocket over the last 25 years. Meanwhile, President George W. Bush has cut their taxes for seven years. Instituting a 50 percent tax rate on income over $5 million and a 70 percent rate on income over $10 million would generate $105 billion a year until the bailout is paid for.
- An End to Overseas Corporate Tax Havens: $100 Billion
Congress should close down corporate tax havens that allow corporations to game the system and cut their taxes, sometimes to zero. This step would generate $100 billion from profitable companies that have paid no taxes over the last decade.
- The Elimination of Subsidies for Excessive CEO Pay: $20 Billion
As taxpayers, we subsidize excessive CEO pay, through a host of tax loopholes, to the tune of $20 billion a year. Congress should close these loopholes, including the accounting gimmicks that permit companies to report one set of earnings to shareholders and another lower number to Uncle Sam.
- The Elimination of the Tax Preference for Capital Gains: $95 Billion
The mega windfalls that Wall Street executives have pocketed over recent years will be generating additional income, in the form of dividends and capital games, for years to come. Under current tax law, dividend and capital gains income faces a mere 15 percent tax rate while income from actual work can be taxed at rates that go up to 35 percent. Taxing wealth and work at the same rates would generate $95 billion a year in revenue.
- A Progressive Inheritance Tax: $60 Billion
In the near future, the moguls of the past quarter-century will be passing off the scene and leaving behind dynastic-size fortunes. A portion of this wealth should be taxed. A progressive estate tax on estates over $2 million — $4 million for a couple — could generate $60 billion a year in the short term and much more in outlying decades.
- The Elimination of the Mansion Subsidy: $20 Billion
Wealthy taxpayers can currently deduct their mansion mortgage interest off their taxes. The richest 2 percent of U.S. households do not need to be subsidized by American taxpayers. Capping the home mortgage interest deduction for households with incomes over $200,000 per year would generate $20 billion a year.
The effects of posting this plan on right wing forums has been hysterical. They literally don't know what to do. Their immediate knee-jerk reaction is that we can't tax the rich. Period.
Then you point out the moral dilemma: If we don't bailout these banksters, a lot of innocent people who weren't even involved will get wiped out financially. Are you saying that we shouldn't bail out the economy just to support an idealistic conservative notion?
Now they either have to assert that the economy will be fine if we don't bail out these banksters or agree that it is wrong for the entire nation to suffer if we don't.
If they think the nation will be fine, they finally have to admit that Bush, McCain, Boehner and the rest of their Republican leadership have been LYING to them about this entire thing. Once THAT door gets opened, well, if they lied about this, couldn't they have lied about Iraq? About FISA? You see where that goes.
If they get their way and there's NO bailout and the economy DOES crash, it will be the end of the Republican Party.
If they think maybe the economy won't be fine and that it IS wrong for every taxpayer to have to pay for something only the banksters profitted from, then their philosophy is STILL in a conundrum. Because now, if we HAVE to bail out this mess, then who should pay for it?
If the U.S. taxpayer has to pay for this mess, then it means it's okay to gamble and take outrageous risks because you won't have to pay for your losses, the taxpayers will foot the bill. Which means we can guarantee this mess will just keep happening.
So who does that leave to pay for this mess? Why the very people who profited from it to begin with. If THEY have to pay for their own mess then that means taxing THEM to pay for it.
And that's when the conservatives heads explode. There's no escape from THERE VERY OWN LOGIC: The rich must be taxed.
Unless, of course, Harry Reid and the Blue Washed Dems can come to the rescue, pass a bailout plan that lets the rich skip out tax free while adding regulations that don't actually protect the public at all.
Then logic be damned and it's all the Democrats fault.
