I wish the so-called liberal media would challenge the seemingly accepted idea (with notable exceptions such as Krugman etc.) that redistribution of wealth in our country means taking money from the rich and giving it to the lazy, undeserving public. This idea is upside-down. Consider that:
1) Historically, kings were rich and peasants were poor; and
2) Then there’s your third-world country du jour. Most of the wealth and power is held by a small group of people at the expense of the population.
The method used to shift a countries’ wealth to the small group is taxation – typically as rent for occupying property, fees to the church, customs/duties, etc. Since the 1970s in the US, the flow of wealth upwards has increased mostly through deregulation and unfair tax restructuring – more sophisticated than feudal times or some third-world countries, but no less effective.
This redistribution is done using the tax code because taxes are forever – they don’t need to be re-approved every year. Basically rich lobbyist, funded by richer oligarchs, pay off rich politicians to sponsor and vote on bills that incrementally protect rich people (big business, inherited wealth, etc.).
All our little progressive income tax does is slow down the flow of wealth. The rest of the taxes we pay are as regressive as any tax has ever been.
I’ve had tax arguments that go something like this:
Rich: How about a flat tax?
Me: Sure, no problem, but make ALL taxes flat. So that at the end of the year, everyone just adds up all of the taxes they’ve paid, including payroll, property, gasoline, sales, as well as fees, tolls, etc., adjust their taxable income accordingly, and then apply the flat rate.
Rich: No way! Usage taxes are good because I shouldn’t have to pay for something that you use. If YOU use it, then YOU should pay the tax.
Me: I see your point. Well then that means we should tax transactions in financial exchanges like Wall Street right? And while we’re talking about big finance, how about taxing capital gains at the same rate as regular income? And why is payroll tax capped anywa ..
Rich: Whooooaa there! You can’t over-tax (meaning tax fairly) the job creators, small business owners, entrepreneurs, and the people who drive the economy, blah blah blah …
Me: zzzzzzzzzz snore
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I didn’t even get the chance to mention loop-holes, offshore accounts, loan guarantees and discounts, etc. (there is basically no end to our government’s largess when it comes to protecting wealth).
I also didn’t get to mention that wealthy people attain their lofty economic status, in part, by taking advantage of our infrastructure: roads, bridges, telephone lines, electrical grids, banking and legal systems, etc. – which are disproportionately paid for by, you guessed it, the public (through taxes).
Finally, I would never have had the time to go into the whole university-to-industry technology transfer system – where new technology is developed in universities, which are often supported with public (tax) dollars, and basically handed over to industry, patents and all. So that industry can then “develop” and generate products to sell back to the public.
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The money flows up, it always has – and it’s done through the tax code. Spread the word.
7:38 AM PT: 1. First commentator: you miss the point. Congress redistributes the wealth unfairly - as I pointed out.
2. Second commentator: how did they come to own this 40%? Through the unfair redistribution of wealth.
3. Third commentator: this "hatural preference" of our system IS what I am talking about