Do we live in a democracy? Then we should be taxing the rich more!
Taxes have been a primary target for ideology in America. In the days of Rockefeller and Carnegie, the superrich paid around 90 percent taxes, and still lived in hog heaven. Yet today’s ideologues, from Capitol Hill to the talking heads in the media insist that today’s rich are supposed to be pitied by us ordinary folk for having to pay taxes at all!
Anthropologist David Graeber recently pointed this out this inconsistency:
Today, as Warren Buffett has famously pointed out, the tax code is so regressive that he pays a lower tax-rate than his secretary.
OUR leaders have asked for “shared sacrifice.” But when they did the asking, they spared me. I checked with my mega-rich friends to learn what pain they were expecting. They, too, were left untouched.
While the poor and middle class fight for us in Afghanistan, and while most Americans struggle to make ends meet, we mega-rich continue to get our extraordinary tax breaks. Some of us are investment managers who earn billions from our daily labors but are allowed to classify our income as “carried interest,” thereby getting a bargain 15 percent tax rate. Others own stock index futures for 10 minutes and have 60 percent of their gain taxed at 15 percent, as if they’d been long-term investors.
These and other blessings are showered upon us by legislators in Washington who feel compelled to protect us, much as if we were spotted owls or some other endangered species. It’s nice to have friends in high places.
Last year my federal tax bill — the income tax I paid, as well as payroll taxes paid by me and on my behalf — was $6,938,744. That sounds like a lot of money. But what I paid was only 17.4 percent of my taxable income — and that’s actually a lower percentage than was paid by any of the other 20 people in our office. Their tax burdens ranged from 33 percent to 41 percent and averaged 36 percent.
If you make money with money, as some of my super-rich friends do, your percentage may be a bit lower than mine. But if you earn money from a job, your percentage will surely exceed mine — most likely by a lot.
The media has been saturated with conservative ideologues trying to convince us that the rich should be thought of as “job creators,” and that if we let them get even richer, that will somehow mean more money for the rest of us ordinary folk.
Notice that they don’t use evidence when they make these arguments, just assertions and appeals to what they call “economic common sense.”
A comical trend in the manufacturing of ideology is to insist that Warren Buffett is doing “class warfare” when he speaks publicly about the tax code, or that Obama is doing the same when he proposes to return to a slightly less regressive tax code by closing some loopholes for corporations and abolishing the Bush tax cuts for the wealthy.
Yes, the rich will have to downsize their fleet of yachts, and we should be worried for their sake lest they also downsize their corporations and fire all us ordinary folk. In fact, we should be hoping and praying that these billionaires get to keep adding to their stockpiles of riches.
Noam Chomsky pointed out that Americans have a long history of believing that the country should not be democratic, but should be ruled instead by the richest among us:
Polls have long shown that Americans are highly interested in taxing the rich more. But because our government is controlled by the rich and ordinary people, the will of the people is ignored and a regressive tax code is imposed. Unfortunately, if the Republicans are the mean face of the business class, the Democrats are its nicer face. So our voting options come down to Party of Business (Option A or Option A’). Options B-Z just aren’t on the table in our flawed political system.
Since the Reagan era there has been an idea that if we cut taxes on the rich, it will translate to a higher level of wealth for ordinary people. So this system was imposed. Taxes for the rich were cut then, and again under Bush, even as benefits for the poor were slashed. Talk about class warfare! And how has this all worked out?
The rich got richer, no question about that. 5% of American households are holding 82% of the wealth. There are more millionaires than ever, and the number keeps growing even during the recession. But the rest? The ordinary ones? Record poverty (currently at over 15% of the population), and utter stagnation in the middle class since Reagan.
If we lived in a democracy, we would be taxing the rich at a higher rate. Evidence is overwhelming. Poll after poll has shown that the clear will of the majority is to raise taxes on the rich and to keep entitlement programs such as Medicare.
Evidence below. (You can click on each picture for view full poll data.) And these are just from the last three years.
Americans overwhelming support taxing the rich at a higher rate:
And here is Buffett’s final conclusion, with which, as we have seen, the marjority of American’s clearly agree: