RichardAWilson
29th June 2011, 03:25
Millions of Americans (Democrats and Republicans) seem to believe that taxes are levied in a progressive manner: Whereby those that can afford to contribute do the contributing.
The Democrats like to claim that they’re supporters of this fair and humane tax system, while the Republicans oppose it for being Socialistic.
The truth? The American Tax System is, in aggregate, much more regressive than you’d think.
We’re aware of the mainstream headlines:
General-Electric doesn’t pay taxes.
U.S. Companies are off shoring our jobs and repatriating the untaxed profits that are earned from exploiting children in China and women in India.
We’re even aware that the rich can afford financial advisors and accountants that we can’t afford.
However, there is still a general (mis)belief that the tax system is fair and equitable. The reason? Right-winged journalism, reporting and lies claim that the rich are contributing an unfair share of the Federal Income Tax.
The American Bourgeoisie benefits from a method of taxation that makes them appear to contribute more than their fair share.
However, the truth is that billionaires, such as Warren Buffet, often pay a lower effective tax burden than their Office Workers.
Why is this so?
Well, the super-rich (I.e. Multimillionaires and Billionaires) often derive their wealth from stocks, dividends, bonds and real estate. The Capital Gains Tax, which is levied on financial wealth and income, remains 15%, which is lower than marginal income tax rates on middle-income households.
Some members of the super-rich, such as Theresa Heinz, the billionaire wife of John Kerry, aren’t paying taxes because they’re investing their fortunes in untaxed Municipal Bonds.
(They’re lending money to cash starved cities and counties and they’re collecting untaxed interest from local taxpayers).
During the housing boom, millionaires, such as the author of “Rich Dad, Poor Dad,” reaped massive profits from the Mortgage Interest Deduction, which allowed them to borrow more money to consolidate even more real estate in fewer and fewer rich and speculative hands.
Wall St’s Hedge Fund Managers benefit even more than the average Joe Billionaire from the Income Tax System: Hedge-Fund Managers benefited from a stipulation in the tax code that allowed them to dodge the IRS.
The U.S. Tax System, which has been regressive for decades, became even more anti-American and Regressive during the Bush Administration: With so-called Moderate Democrats often supporting his Tax Cutting Agenda as a means of stimulating the economy after the Internet Stock Crash that followed the Clinton Casino Bubble Economy.
2001’s Tax Cutting consisted of reducing Marginal Income Tax Rates and mailing rebate checks to revive consumer spending and aggregate demand.
2003’s tax-cutting was a Supply-Side Dosage for supercharging Wall St: It allowed big and profitable American Multinationals to repatriate untaxed profits from their foreign subsidiaries.
Corporate America promised Congress that it would use the windfall: For making investments in America and creating new jobs, just as the Wall St. Banks promised to lend the taxpayer dollars that were handed to them through TARP (The Junk Assets Program).
Instead of investing those repatriated profits: Our Corporations distributed the cash to shareholders. Dividends, which were once treated as regular income, were now, thanks to Bush and the Moderate Democrats, taxed at a much lower rate. 2003’s tax cutting was used to fatten the bank accounts of the super-rich and Wall Street.
America’s Forbes 400 - the richest 400 men and women in the nation - claimed a net-worth of $1.6 trillion by 2008 versus the meager $1 trillion they were worth during the Clinton Boom.
Meanwhile: Our Fortune 500 Companies were sending millions of high-paying American jobs to Southeastern Asia. (China, India, Korea)
However: If this information doesn’t change your mind: Consider FICA. FICA - which finances cash benefits and health insurance for millions of retired Americans - isn’t levied on those Americans earning more than $106,800.
How is this a progressive tax? The rich aren’t made to contribute: While lower and middle-income Americans contribute hundreds of billions of dollars. If I’m not mistaken: Progressive isn’t the appropriate word.
The same could be said of state taxes, which, by nature, are often regressive. Florida, for example, doesn’t have an income tax.
Instead of taxing income: Some states, such as Florida, tax consumption.
As the super-rich save a much higher percentage of their income than minimum wage workers: Florida’s rural poor in the Panhandle are paying a much higher effective tax rate than Miami’s millionaire snowbirds that relocated there from Manhattan.
Where the Tax System is Progressive: It’s often progressive by overtaxing the (petty bourgeoisie) I.e. Small business owners, sole-proprietorships and professionals - I.e. Accountants, Pharmacists, Physicians, Lawyers and even Large Farmers. By overtaxing the small businessman: The American Income Tax System promotes the consolidation of wealth in fewer and fewer hands. The same holds true for our farmers: Which are often forced, by our tax system, to sell to big and profitable agribusinesses.
The Democrats like to claim that they’re supporters of this fair and humane tax system, while the Republicans oppose it for being Socialistic.
The truth? The American Tax System is, in aggregate, much more regressive than you’d think.
We’re aware of the mainstream headlines:
General-Electric doesn’t pay taxes.
U.S. Companies are off shoring our jobs and repatriating the untaxed profits that are earned from exploiting children in China and women in India.
We’re even aware that the rich can afford financial advisors and accountants that we can’t afford.
However, there is still a general (mis)belief that the tax system is fair and equitable. The reason? Right-winged journalism, reporting and lies claim that the rich are contributing an unfair share of the Federal Income Tax.
The American Bourgeoisie benefits from a method of taxation that makes them appear to contribute more than their fair share.
However, the truth is that billionaires, such as Warren Buffet, often pay a lower effective tax burden than their Office Workers.
Why is this so?
Well, the super-rich (I.e. Multimillionaires and Billionaires) often derive their wealth from stocks, dividends, bonds and real estate. The Capital Gains Tax, which is levied on financial wealth and income, remains 15%, which is lower than marginal income tax rates on middle-income households.
Some members of the super-rich, such as Theresa Heinz, the billionaire wife of John Kerry, aren’t paying taxes because they’re investing their fortunes in untaxed Municipal Bonds.
(They’re lending money to cash starved cities and counties and they’re collecting untaxed interest from local taxpayers).
During the housing boom, millionaires, such as the author of “Rich Dad, Poor Dad,” reaped massive profits from the Mortgage Interest Deduction, which allowed them to borrow more money to consolidate even more real estate in fewer and fewer rich and speculative hands.
Wall St’s Hedge Fund Managers benefit even more than the average Joe Billionaire from the Income Tax System: Hedge-Fund Managers benefited from a stipulation in the tax code that allowed them to dodge the IRS.
The U.S. Tax System, which has been regressive for decades, became even more anti-American and Regressive during the Bush Administration: With so-called Moderate Democrats often supporting his Tax Cutting Agenda as a means of stimulating the economy after the Internet Stock Crash that followed the Clinton Casino Bubble Economy.
2001’s Tax Cutting consisted of reducing Marginal Income Tax Rates and mailing rebate checks to revive consumer spending and aggregate demand.
2003’s tax-cutting was a Supply-Side Dosage for supercharging Wall St: It allowed big and profitable American Multinationals to repatriate untaxed profits from their foreign subsidiaries.
Corporate America promised Congress that it would use the windfall: For making investments in America and creating new jobs, just as the Wall St. Banks promised to lend the taxpayer dollars that were handed to them through TARP (The Junk Assets Program).
Instead of investing those repatriated profits: Our Corporations distributed the cash to shareholders. Dividends, which were once treated as regular income, were now, thanks to Bush and the Moderate Democrats, taxed at a much lower rate. 2003’s tax cutting was used to fatten the bank accounts of the super-rich and Wall Street.
America’s Forbes 400 - the richest 400 men and women in the nation - claimed a net-worth of $1.6 trillion by 2008 versus the meager $1 trillion they were worth during the Clinton Boom.
Meanwhile: Our Fortune 500 Companies were sending millions of high-paying American jobs to Southeastern Asia. (China, India, Korea)
However: If this information doesn’t change your mind: Consider FICA. FICA - which finances cash benefits and health insurance for millions of retired Americans - isn’t levied on those Americans earning more than $106,800.
How is this a progressive tax? The rich aren’t made to contribute: While lower and middle-income Americans contribute hundreds of billions of dollars. If I’m not mistaken: Progressive isn’t the appropriate word.
The same could be said of state taxes, which, by nature, are often regressive. Florida, for example, doesn’t have an income tax.
Instead of taxing income: Some states, such as Florida, tax consumption.
As the super-rich save a much higher percentage of their income than minimum wage workers: Florida’s rural poor in the Panhandle are paying a much higher effective tax rate than Miami’s millionaire snowbirds that relocated there from Manhattan.
Where the Tax System is Progressive: It’s often progressive by overtaxing the (petty bourgeoisie) I.e. Small business owners, sole-proprietorships and professionals - I.e. Accountants, Pharmacists, Physicians, Lawyers and even Large Farmers. By overtaxing the small businessman: The American Income Tax System promotes the consolidation of wealth in fewer and fewer hands. The same holds true for our farmers: Which are often forced, by our tax system, to sell to big and profitable agribusinesses.