By Manifesto Joe
Several days ago, newspapers all over the U.S. had wire editors stupid enough to drink another round of strong Kool-Aid. A "story" by Stephen Ohlemacher of The Associated Press went viral in the MSM. The crux of it: The share of federal income taxes that the rich pay is close to a peak since 1979.
What this "story" amounted to was cherry-picking of the worst possible kind. It was misleading and generally beside the point. But, let's start by examining the thesis:
For 2013, families with incomes in the top 20 percent of the nation will pay an average of 27.2 percent of their income in federal taxes, according to projections by the Tax Policy Center, a research organization based in Washington. The top 1 percent of households, those with incomes averaging $1.4 million, will pay an average of 35.5 percent.
Those tax rates, which include income, payroll, corporate and estate taxes, are among the highest since 1979.
The average family in the bottom 20 percent of households won't pay any federal taxes. Instead, many families in this group will get payments from the federal government by claiming more in credits than they owe in taxes, including payroll taxes. That will give them a negative tax rate.
Please note that what this "story" by Ohlemacher (who obviously has figured out who ultimately pays his salary) focuses on is federal income taxes, exclusively. Conveniently omitted are:
(1) State and local taxes, which are notoriously regressive.
(2) Corporate income taxes. About two-thirds of U.S. corporations, among them the largest, pay ZERO federal income tax, and some even got credits.
(3) Social Security and Medicare payroll taxes, which stop entirely after a certain income level, so they are by definition as regressive as a tax can be.
(4) The assorted breaks that go only to the very, very rich -- we're talking here 0.1%, not just the top 1%. Some of them are mind-blowers.
(5) The U.S. economy doubled in size in 30 years, and yet real wages for ordinary people remained about the same. Obviously somebody has been profiting handsomely from this increase in productivity, and it hasn't been the ordinary run of Americans. Given this trend, wouldn't one expect the top 20%, and even the top 1%, to pay a lot more?
What happened? When newspapers across the U.S. took a great big swig of this Kool-Aid it was, in essence, an acceptance of about one-sixth of relevant data when one honestly and thoroughly examines the effect of taxation on the growing gap between rich and poor. In other words, this "journalist" wrote a "story" based on one of six factors in the overall picture.
Mr. Ohlemacher did one-sixth of the job as well as one could expect. Here's a link to his original "story," courtesy of USA Today.
But now, let's examine the other five sets of data.
(1) A New York Times series on the growing American gap between rich and poor points out:
While the federal government has largely stuck by the principle of progressive taxation, the states have gone their own ways: tax policy is particularly regressive in the South and West, and more progressive in the Northeast and Midwest. When it comes to state and local taxation, we are not one nation under God. In 2008, the difference between a working mother in Mississippi and one in Vermont — each with two dependent children, poverty-level wages and identical spending patterns — was $2,300.
I live in a state (Texas) where there is no income tax. In contast, sales taxes and user fees are very high. These obviously hit consumers at the lower income level, at which more money is spent on basic goods and services, much harder than they affect consumers who spend relatively less on such things. In essence, such taxes are an effective way of punishing the poor for being that way. Texas ranks 5th on the list of 10 most regressive tax states, according to one study. Here's a link to that one.
I'll give my home state credit for one big thing -- grocery items are mostly exempt from the sales tax (although not all convenience store operators have heard that news yet, and related enforcement is very lax). Oklahoma, where I once lived for something under a year and a half, has a state income tax. But they levy a sales tax on everything, including ALL groceries. That wipes out most of the progressive effect that the state income tax has.
(2) The corporate income tax rate in the U.S. is alleged to be relatively high. The problem is, not very many corporations pay it, and that's especially true of the largest and most powerful ones. Even economic conservatives, when pushed into a corner, will admit this. I found a New York Times piece in which Bruce Bartlett, a former Reagan administration official, came clean on this issue. (Sorry, the link no longer works.)
What has the effect been on the federal budget -- which is of so much concern to both major political parties now? Here's a hint: Barlett and Steele, the reporting team that wrote America: What Went Wrong?, reported that in 1959, corporate income taxes comprised 39% of IRS revenue. By 1989, that had declined to 17% And, by the way, those are IRS figures.
It's one thing for Worthington Farthington, CEO of Corporation X, to pay higher personal income taxes than Jack Shitt of Biloxi, Miss. But what if Corporation X, which employs Jack part time with no benefits, pays, effectively, no income tax? And that is increasingly the case.
(3) Yes, I know that corporations pay into the Social Security system, and that they support Medicare as well. But look at the bigger picture. The employee pays 6.2% for Social Security, and the employer matches that, for an effective federal rate of 12.4% But the payroll tax is capped at $106,800, which I would place as the upper threshold of middle-class earnings. No taxes are paid on anything above that. For an illustration of the effect this has, here's a link to the Center for Economic and Policy Research.
This is called regressive taxation. Any questions, class?
Although Social Security's general effect on U.S. society since its inception in 1935 has been a reduction in poverty, the tax that supports it is clearly regressive. But this was largely by design. One of the reasons it has always been this way is to give fatcats some sort of incentive to reluctantly participate in the system.
Now, the swine don't even want to do that. They have all manner of schemes to "privatize" Social Security, to phase it out, give it over to the tender mercies of Wall Street. The arrogance of these people is such that even asking them to do their "part" in a regressive tax structure is just too damned much.
(4) There are tax breaks that go only to the VERY, VERY wealthy that are astonishing. For the sake of brevity, I will cite only one example. The corporate jet tax loophole, it is estimated, will be worth at least $3.2 billion over the span of 10 years. Some estimates, such as the one on this link, put the break's 10-year worth at more like $4 billion.
(5) So, who's been getting rich since 1980, with the U.S. economy doubling in size? Here's a link on the subject. Here's a hint: It hasn't been me, and it's unlikely, if you've read this far, that it's been you, either.
It's mind-boggling to still be hearing allegations that American mainstream news media have a liberal bias, when it's so obvious to whom they are kowtowing. Mr. Ohlemacher certainly seems to know that it's the U.S. Ownership Class that ultimately pays his salary.
Manifesto Joe Is An Underground Writer Living In Texas.
Showing posts with label rich. Show all posts
Showing posts with label rich. Show all posts
Thursday, March 14, 2013
Thursday, August 9, 2012
Rich Have Offshored Their Wealth -- Scumney, Too?
By Manifesto Joe
We live in a time in which ordinary people are being told to expect far, far less. Social Security isn't even a given, nor is Medicare. And yet, now we hear this:
Super Rich Holding $21 Trillion Overseas to Avoid Taxation
Here's the link. That number is "conservative" -- the actual one could run as high as $32 trillion.
This not only comes at a time like this for America -- EU countries are in a bind, too.
I have a "conservative" friend who once made a reference about "money we don't have." Bullshit. Fucking BULLSHIT. It's there, and we KNOW who has it. They are hiding it in places like the Cayman Islands.
Is Slick Willard one of them? We can only guess. Why won't he release his tax records?
The era of "responsible capitalism" is over
It would appear that the only thing that forced that situation was the international challenge of socialism. Granted, socialism didn't hold up well, for reasons that don't have to be enumerated. But when faced with something like an international challenge, "capitalists" had to behave more responsibly.
Karl Marx was certainly wrong about a lot of things. But one thing he predicted was that, despite myriad attempts to "reform" capitalism, it would always revert back to its original, brutal form. It's looking like Karl was right about that one.
So, what to do now?
Revolutions don't generally turn out well, when you look at history. I can't say that I would recommend them. But if there isn't some kind of serious turnaround in Western societies within the next decade -- well, something else dramatic will have to happen. If it doesn't, we will be walking around as plutocrat trolls for the next couple of centuries. The plutocracy has the technology to commit this atrocity, unless we the people prevent it.
Manifesto Joe Is An Underground Writer Living In Texas.
We live in a time in which ordinary people are being told to expect far, far less. Social Security isn't even a given, nor is Medicare. And yet, now we hear this:
Super Rich Holding $21 Trillion Overseas to Avoid Taxation
Here's the link. That number is "conservative" -- the actual one could run as high as $32 trillion.
This not only comes at a time like this for America -- EU countries are in a bind, too.
I have a "conservative" friend who once made a reference about "money we don't have." Bullshit. Fucking BULLSHIT. It's there, and we KNOW who has it. They are hiding it in places like the Cayman Islands.
Is Slick Willard one of them? We can only guess. Why won't he release his tax records?
The era of "responsible capitalism" is over
It would appear that the only thing that forced that situation was the international challenge of socialism. Granted, socialism didn't hold up well, for reasons that don't have to be enumerated. But when faced with something like an international challenge, "capitalists" had to behave more responsibly.
Karl Marx was certainly wrong about a lot of things. But one thing he predicted was that, despite myriad attempts to "reform" capitalism, it would always revert back to its original, brutal form. It's looking like Karl was right about that one.
So, what to do now?
Revolutions don't generally turn out well, when you look at history. I can't say that I would recommend them. But if there isn't some kind of serious turnaround in Western societies within the next decade -- well, something else dramatic will have to happen. If it doesn't, we will be walking around as plutocrat trolls for the next couple of centuries. The plutocracy has the technology to commit this atrocity, unless we the people prevent it.
Manifesto Joe Is An Underground Writer Living In Texas.
Monday, April 18, 2011
Income Tax Day Special: Who Wants To Be A Millionaire (And Pay Next To Nothing)?
By Manifesto Joe
The Republicans just don't get it, and it looks like they won't in the foreseeable future. With 40 cents of every federal dollar spent now being borrowed, they want to give yet more tax bonanzas to the rich while essentially abolishing Medicare and Medicaid.
This isn't what Americans voted for in 2008. A lower percentage of them, those who bothered to vote in 2010, voted for such folly whether they knew it or not.
The numbers cry out for a tax hike on the wealthy. Here's Robert Reich on the issue, courtesy of Truthout.
When one talks to earners at the upper-middle level, they are quick to point out the marginal rate of 35%, arguing that with progressive tax brackets, many of them end up paying more than lower earners as a percentage. (That's what comes of a steady mental diet of Fox News. That stuff rots brains.)
Yet such people seem to get amnesia when one points out that just 10 or so years ago, when the marginal rate was 39.6%, the U.S. was running a surplus. This was no accident. Even with the modest Clinton tax hike on the rich that barely passed in 1993, we didn't have the structural deficit we have now.
And the Mainstream Media are quick to obfuscate, talking to selected economists who keep telling the victims that raising taxes on the rich won't be enough. And who owns the MSM? Giant corporations -- and how much income tax do they pay?
Two-thirds of corporations pay no income tax
That's not news -- the first of the stories broke in 2008. Here's a link to one of them.
Although it's not news, many people don't seem to "get it," so it bears repeating, and repeating some more. Most of these "legal persons" are getting a free ride. They use the infrastructure (such as it is now), and have vast resources to fleece ordinary, unsuspecting victims out of many billions, yet they pay nothing.
In case you thought I was joking, here's a link to a more recent story about this, courtesy of Alternet.
In their 1990 book America: What Went Wrong?, investigative journalists Donald Barlett and James Steele cited IRS statistics that show that, in 1959, corporations accounted for 39% of federal tax revenue. By 1989, that was down to 17%. And it's
probably gotten worse since then.
Here's a brief roll call of Corporate America's tax slackers:
General Electric -- Last month, The New York Times reported that, in addition to paying no federal income taxes this year, GE, the largest U.S. corporation, is to get a tax credit of $3.2 billion. GE made $14.1 billion in profits in 2010, $5.1 billion of which came from its U.S. operations. The story was conspicuously absent from NBC News, part-owned by General Electric.
Goldman Sachs -- Bloomberg News, in December 2008, reported that Goldman Sachs Group Inc., which got $10 billion and debt guarantees from the U.S. government in October, expects to pay $14 million in taxes worldwide for 2008 compared with $6 billion in 2007. The company’s effective income tax rate dropped to 1 percent from 34.1 percent, Goldman Sachs said. The firm reported a $2.3 billion profit for the year after paying $10.9 billion in employee compensation and benefits. U.S. Rep. Lloyd Doggett, a Texas Democrat who serves on the tax-writing House Ways and Means Committee, said steps by Goldman Sachs and other banks shifting income to countries with lower taxes is cause for concern. "This problem is larger than Goldman Sachs," Doggett said. "With the right hand out begging for bailout money, the left is hiding it offshore."
ExxonMobil -- In March 2010, Forbes magazine reported that the oil giant, "which last year reported a record $45.2 billion profit, paid the most taxes of any corporation, but none of it went to the IRS":
Exxon tries to limit the tax pain with the help of 20 wholly owned subsidiaries domiciled in the Bahamas, Bermuda and the Cayman Islands that (legally) shelter the cash flow from operations in the likes of Angola, Azerbaijan and Abu Dhabi. No wonder that of $15 billion in income taxes last year, Exxon paid none of it to Uncle Sam, and has tens of billions in earnings permanently reinvested overseas.
Mother Jones magazine noted that, despite benefiting from corporate welfare in the U.S., Exxon complains about paying high taxes, claiming that it threatens energy innovation research. It was noted at the Wonk Room that big corporations' tax shelter practices similar to Exxon’s shift a $100 billion annual tax burden onto U.S. taxpayers.
This list could grow to tedious proportions. You should get the picture by now.
Let's start sharing some sacrifice
Nobody likes to pay taxes. I owed the IRS far more than I expected to this year, and will probably be until fall paying it all off. But when some common slob like me is paying Uncle Sam more, year after year, than GE is, then there must be something dreadfully wrong with this system.
But alas, our Republican brethren still don't get it. They are promoting the idea of still more tax bonanzas for the wealthy. And, although a corporation enjoys the status of a "legal person" in our psychopathic system, two-thirds of them pay nothing, and even get refunds and billions in corporate welfare on top of that.
The latest news on this was from The Associated Press. It's not just corporations that are the problem. About 45% of U.S. households will pay no income tax at all, thanks to all the breaks that people, especially the super-rich, are getting.
It should be clear, if one looks at the numbers honestly, that our structural deficit has much more to do with what needs to be raised than with what needs to be cut.
Yet, the Republicans persist in their policies of the past 30-plus years, to defecate all over ordinary people while cutting sweet deals for their rich campaign contributors. And the Democrats haven't been very much better. Even President Barack "Change you can believe in" Obama hasn't been nearly candid enough on this issue.
So, what is to be done? Giant corporations and the super-rich clearly have politicians by the balls and have been gaming the system accordingly for the past 30-plus years. What can an ordinary person do?
(1) Stop believing the MSM. They obfuscate, and sometimes outright lie. And that shouldn't be surprising, given that they are generally owned by the very corporations that have been getting a free ride.
(2) Vote in the primaries. This is where people can get real Democrats, not just more corporate lackeys, to be candidates in the general election. The one positive that came out of the 2010 midterm debacle was that now, the Democrats left in Congress are more progressive on these kinds of issues. Ironically, it was largely the "Blue Dogs" and Democrats-in-name-only who went down in defeat to Tea Party challengers.
(3) Vote in the general elections. As frustrating as DINOs can be, and as agonizingly placating as Obama has been, we're better off with them than we are now, with right-wing Republican ideologues writing the agenda. President Clinton, Republicrat though he often was, presided over the last balanced federal budget, and that was largely because he demanded that the rich pay at least a modestly higher percentage of their hefty incomes in taxes. And back then, there was little talk of privatizing Medicare.
(4) General strike. In contemporary America, it will be very hard to float this idea. But if most of the work force in this country were willing to "sick out" just one day, and a few spokespeople made clear to the powers that be that this was an organized protest, it might perk up some ears.
This country is far from broke. The trick is going to be getting the rich slackers who have the bucks to fork some of them over. There are people out there who have it -- but they aren't going to let go of any of it without a fight.
Just pay your taxes today, chumps. Serious training starts tomorrow.
Manifesto Joe Is An Underground Writer Living In Texas.
The Republicans just don't get it, and it looks like they won't in the foreseeable future. With 40 cents of every federal dollar spent now being borrowed, they want to give yet more tax bonanzas to the rich while essentially abolishing Medicare and Medicaid.
This isn't what Americans voted for in 2008. A lower percentage of them, those who bothered to vote in 2010, voted for such folly whether they knew it or not.
The numbers cry out for a tax hike on the wealthy. Here's Robert Reich on the issue, courtesy of Truthout.
When one talks to earners at the upper-middle level, they are quick to point out the marginal rate of 35%, arguing that with progressive tax brackets, many of them end up paying more than lower earners as a percentage. (That's what comes of a steady mental diet of Fox News. That stuff rots brains.)
Yet such people seem to get amnesia when one points out that just 10 or so years ago, when the marginal rate was 39.6%, the U.S. was running a surplus. This was no accident. Even with the modest Clinton tax hike on the rich that barely passed in 1993, we didn't have the structural deficit we have now.
And the Mainstream Media are quick to obfuscate, talking to selected economists who keep telling the victims that raising taxes on the rich won't be enough. And who owns the MSM? Giant corporations -- and how much income tax do they pay?
Two-thirds of corporations pay no income tax
That's not news -- the first of the stories broke in 2008. Here's a link to one of them.
Although it's not news, many people don't seem to "get it," so it bears repeating, and repeating some more. Most of these "legal persons" are getting a free ride. They use the infrastructure (such as it is now), and have vast resources to fleece ordinary, unsuspecting victims out of many billions, yet they pay nothing.
In case you thought I was joking, here's a link to a more recent story about this, courtesy of Alternet.
In their 1990 book America: What Went Wrong?, investigative journalists Donald Barlett and James Steele cited IRS statistics that show that, in 1959, corporations accounted for 39% of federal tax revenue. By 1989, that was down to 17%. And it's
probably gotten worse since then.
Here's a brief roll call of Corporate America's tax slackers:
General Electric -- Last month, The New York Times reported that, in addition to paying no federal income taxes this year, GE, the largest U.S. corporation, is to get a tax credit of $3.2 billion. GE made $14.1 billion in profits in 2010, $5.1 billion of which came from its U.S. operations. The story was conspicuously absent from NBC News, part-owned by General Electric.
Goldman Sachs -- Bloomberg News, in December 2008, reported that Goldman Sachs Group Inc., which got $10 billion and debt guarantees from the U.S. government in October, expects to pay $14 million in taxes worldwide for 2008 compared with $6 billion in 2007. The company’s effective income tax rate dropped to 1 percent from 34.1 percent, Goldman Sachs said. The firm reported a $2.3 billion profit for the year after paying $10.9 billion in employee compensation and benefits. U.S. Rep. Lloyd Doggett, a Texas Democrat who serves on the tax-writing House Ways and Means Committee, said steps by Goldman Sachs and other banks shifting income to countries with lower taxes is cause for concern. "This problem is larger than Goldman Sachs," Doggett said. "With the right hand out begging for bailout money, the left is hiding it offshore."
ExxonMobil -- In March 2010, Forbes magazine reported that the oil giant, "which last year reported a record $45.2 billion profit, paid the most taxes of any corporation, but none of it went to the IRS":
Exxon tries to limit the tax pain with the help of 20 wholly owned subsidiaries domiciled in the Bahamas, Bermuda and the Cayman Islands that (legally) shelter the cash flow from operations in the likes of Angola, Azerbaijan and Abu Dhabi. No wonder that of $15 billion in income taxes last year, Exxon paid none of it to Uncle Sam, and has tens of billions in earnings permanently reinvested overseas.
Mother Jones magazine noted that, despite benefiting from corporate welfare in the U.S., Exxon complains about paying high taxes, claiming that it threatens energy innovation research. It was noted at the Wonk Room that big corporations' tax shelter practices similar to Exxon’s shift a $100 billion annual tax burden onto U.S. taxpayers.
This list could grow to tedious proportions. You should get the picture by now.
Let's start sharing some sacrifice
Nobody likes to pay taxes. I owed the IRS far more than I expected to this year, and will probably be until fall paying it all off. But when some common slob like me is paying Uncle Sam more, year after year, than GE is, then there must be something dreadfully wrong with this system.
But alas, our Republican brethren still don't get it. They are promoting the idea of still more tax bonanzas for the wealthy. And, although a corporation enjoys the status of a "legal person" in our psychopathic system, two-thirds of them pay nothing, and even get refunds and billions in corporate welfare on top of that.
The latest news on this was from The Associated Press. It's not just corporations that are the problem. About 45% of U.S. households will pay no income tax at all, thanks to all the breaks that people, especially the super-rich, are getting.
It should be clear, if one looks at the numbers honestly, that our structural deficit has much more to do with what needs to be raised than with what needs to be cut.
Yet, the Republicans persist in their policies of the past 30-plus years, to defecate all over ordinary people while cutting sweet deals for their rich campaign contributors. And the Democrats haven't been very much better. Even President Barack "Change you can believe in" Obama hasn't been nearly candid enough on this issue.
So, what is to be done? Giant corporations and the super-rich clearly have politicians by the balls and have been gaming the system accordingly for the past 30-plus years. What can an ordinary person do?
(1) Stop believing the MSM. They obfuscate, and sometimes outright lie. And that shouldn't be surprising, given that they are generally owned by the very corporations that have been getting a free ride.
(2) Vote in the primaries. This is where people can get real Democrats, not just more corporate lackeys, to be candidates in the general election. The one positive that came out of the 2010 midterm debacle was that now, the Democrats left in Congress are more progressive on these kinds of issues. Ironically, it was largely the "Blue Dogs" and Democrats-in-name-only who went down in defeat to Tea Party challengers.
(3) Vote in the general elections. As frustrating as DINOs can be, and as agonizingly placating as Obama has been, we're better off with them than we are now, with right-wing Republican ideologues writing the agenda. President Clinton, Republicrat though he often was, presided over the last balanced federal budget, and that was largely because he demanded that the rich pay at least a modestly higher percentage of their hefty incomes in taxes. And back then, there was little talk of privatizing Medicare.
(4) General strike. In contemporary America, it will be very hard to float this idea. But if most of the work force in this country were willing to "sick out" just one day, and a few spokespeople made clear to the powers that be that this was an organized protest, it might perk up some ears.
This country is far from broke. The trick is going to be getting the rich slackers who have the bucks to fork some of them over. There are people out there who have it -- but they aren't going to let go of any of it without a fight.
Just pay your taxes today, chumps. Serious training starts tomorrow.
Manifesto Joe Is An Underground Writer Living In Texas.
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