Only the Little People Pay Taxes in America
Why are our seniors paying higher taxes on their social security benefits than billionaires pay on stocks?
The IRS released a new report that reveals the staggering amount of money that the top one-thousandth of one percent in America is hoarding. While the top earners in the bottom 50% of Americans only make 36,000 dollars a year – the bottom earners in the top one-thousandth of one percent ‘only make’ over 62 million dollars a year.
Sixty-two million dollars per year is what it takes to be a top one-thousands of one percenter – and those are the poorest of the richest households – on average the top earners make over 160 million dollars a year.
That’s 160 times richer than the average one percenter who only makes about 1.5 million dollars. That’s an obscene concentration of wealth – but that’s not the most outrageous part of the story, because those top earners are paying a lower tax rate than working class Americans and retirees.
The highest tax rate on income taxes in 2014 was 39.6% for households earning over 439,000 dollars – and the majority of American households paid an income tax rate of between 15% and 28%. Those are households of plumbers, bus drivers, doctors, and engineers – the average working Americans who create real wealth for the economy.
Meanwhile the banksters and vulture capitalists - the billionaires who make most of their income by moving money back and forth – pay a maximum rate of 20% of their earnings from the stock market.
How does this happen? Why did Mitt Romney a lower effective tax rate in 2011 than a waitress earning $2.13 an hour?.
It started with the memo that Lewis Powell wrote in 1971 – just a few months before Nixon nominated him to the Supreme Court.
In no unclear terms – Powell wrote: “Business must learn the lesson, long ago learned by labor and other self-interest groups. This is the lesson that political power is necessary; that such power must be cultivated; and that when necessary, it must be used aggressively and with determination – without embarrassment and without the reluctance which has been so characteristic of American business.”
And for the last 40 years – business has followed Powell’s advice to a ‘T’: by taking over our education system; purchasing the nation’s newspapers, TV, and radio stations; filling the courts with activist judges; and filling Washington with lobbyists and corporate-owned lawmakers.
And what have they done with that power? They’ve rigged the system against the average American and in favor of themselves. They’ve punched holes in our tax system so that seniors and working Americans can pay a higher tax rate than vulture capitalists and bankers.
Vice President Henry Wallace, in 1944 in the New York Times, warned about how corporatists might try to undermine American Democracy: "They claim to be super-patriots, but they would destroy every liberty guaranteed by the Constitution. They demand free enterprise, but are the spokesmen for monopoly and vested interest. Their final objective toward which all their deceit is directed is to capture political power so that, using the power of the state and the power of the market simultaneously, they may keep the common man in eternal subjection."
And this IRS report shows that Wallace was prescient - that’s exactly what’s happened.
The vulture capitalists and bankers make money without creating wealth. Adam Smith, back in 1776 in "Wealth of Nations," said that real wealth is created for a nation by manufacturing. His simple example was a person adding labor to raw materials to create a new object with greater value – he used the example of a person taking a valueless tree branch and using their skill and labor to carve it into a valuable axe handle that then becomes part of the wealth of the nation for years.
That’s what working Americans do every day – building cars; making consumer products; an engineer designing a bridge.
But the top earners in America? The Wall Street executives and vultures? They don’t make anything – they don’t create wealth – and they actually can increase their profits - but not the wealth of our nation - by gutting a company, slashing employee benefits, and decimating the workforce.
But after 40 years of corporate America infiltrating and subverting our democracy – they’ve grabbed so much power and influence over our politics that they’ve essentially written themselves out of our tax code.
So now – only the little people in America – the doctors, plumbers, servers and small business owners – pay taxes in America.
Little people – like the seniors who have paid into social security all their lives only to have their benefits taxed at a higher rate than Mitt Romney’s capital gains. And that needs to change – we need to get money out of politics so that billionaires can’t buy elected officials and get special tax rules written just for themselves. We need to stop the superrich from punching more holes in our tax code and get them to pay their fair share.
If we want America to be a strong and truly wealthy nation, we need to tax the people who strip money out of companies without creating wealth at least at the same rate as that of bus drivers and doctors.
The French people long ago rejected Marie Antoinette for her "let them eat cake" quip. Maybe it's time to sharpen up the guilotines again!
So the question / argument I hear all the time in the face of this is, roughly, "Even if you taxed the 1% at 90% of their income there is not enough to pay for all the lazy welfare bums sucking off the teat of Amereica! Does anyone have any facts to prove or disprove this? (As opposed to opinion) Thanks
I don't know about anyone else but I'm sick of it. I'm on dissability, you know, one of those freeloaders that broke his back working for a living. My spine is spagetti after four surgeries, pins, rods, and screws. Not to mention what has been removed from lumbar to cervical. Every year irs takes more from me and I read stories like this one. I'm not complaining, much. Now they want to cut my meager check by what 20% because I'm a freeloader. I say we gather, I can still walk, and do something about it. I feel sorry for those worse than me and there are many far worse than me that did nothing to deserve this injustice. We are not a country of freeloaders. Our work production continues to rise by the year. We have got to put an end to this. Vote Bernie and let Warren give'em hell.
Why don't you get off your lazy ass and look it up genius.
Thom, continue to scream about "enthusiastically" supporting Hillary Clinton because could you conclude that it is better to vote for a phony liberal than a phony conservative(?) At least with a phony conservative, their betrayal to their base would be a betrayal for leaning more to the political center/left-leaning while a phony Democrat would at least first hesitate, and then… authorize troops over to the Middle East to teach those dark-skin Muslims a few things about White Christian values.
It’s truly sickening to watch the president and the lamestream media trash first Senator Elizabeth Warren, and now presidential candidate Bernie Sanders because they know they do not speak just in words, but in their actions: (http://www.nytimes.com/2015/06/01/us/politics/challenging-hillary-clinto... ).
Hillary Clinton is trying to catch up to the rhetorical skill of the president but hasn’t found her voice because her truer policy positions are more moderate and counter to the base of the political party she says she wants to champion.
MSNBC's Joe Scarborough may have not correctly framed his argument about Bill Clinton's governing style as Centrist, not as a Liberal, but the better point being that both Parties use their rhetorical skills to appeal to their base, and then govern a lot closer to their pragmatism than to their philosophical political leanings.
rocketman...... listen.....Offshore tax havens alone cost us working people 150 billion in lost revenue each year. That means the rest of us pay higher taxes and things like budgets get cut...so things like bridges fall down!
The entire food stamp "SNAP" program costs around 80 billion, but guess what? ...for every food stamp dollar spent, almost two dollars are generated in gross domestic product. On the other hand, the trillions in offshore bank accounts generates nothing, nothing, nothing, ZERO!
I pay around 50% in total taxation every year...that includes property , sales, all taxes. if I can pay that as most other working people probably do too, then I damn well think a guy making ten million can pay a 50% rate.
Give the working class a tax break, and we spend it, give the super rich a break ,and they stash it....that's a fact, the one you need to pay the most attention to.
The phrase "Only the Little People Pay Taxes in America" is categorically false and Thom should know better.
The wikki page (2007) says the top 20% pay nearly 70% of all federal taxes (not just income). their tax rate is 25.1%, the highest. The top 1% pay 29.5%.
The bottom 20% pay only 4% in taxes, the next 10.6%, the next14.3, and the next, 17.4%. In other words, the bottom 80% of taxpayers have less than the tax rate of the stockbrokers Thom complains about, at 20%.
What makes this analysis doubly stupid, is that we now know that about half the population PAYS NO INCOME TAX. But think for a moment. They are paying INTO THEIR OWN RETIREMENT, and THEIR OWN SOCIAL INSURANCE!
It is far better to look at Federal Income taxes. Here, the trend is unmistakable. The top 20% don't pay 70%, they pay 86% of all feral income taxes! And even though their tax rate is about the same, the tax rates of the bottom 40% ARE NEGATIVE!
The fact is that the government is a massive system to redistribute wealth in the way of insurance to the poor and middle class.
Either you are a fox news commentator or you are from the 1%ers to skew the facts.
I do agree that Thom's headline was a mistake, but your deliberate deceit that the 1% is paying 86% is an outright lie. According to 2015 tax code, anybody making over 18. 1/3 mil. of personal income only pays 35%. Some of the lower brackets pay up to almost 40%. ya, that's fair(ytf). Making $40,000 is 25%. But a difference in profit of 11.9 mil. vs. 30,000. (ytf).
Wash. Post - 2012 - top 1% paid only 22.83% and with low capital gains taxes only paid avg. 15%. (ytf).
following from: wearethe99percent.us/incomeinequality
- top 5% has increased income 73%
- bottom 20% decreased income 7%
- 2009, richest 74 americans earned as much as 19 mil. lowest paid americans
- 2010, top 1% took in 24% of U.S. income
And this is all personal income stats.
What about the corp. screw-in the h*/# out of the U.S.?
And don't forget the feds unrecorded spending habits.
Reuters news 11-16-13. "Pentagons Doctored Ledgers"
Huffpost 3-11-13. "Corp. Tax Fraud"
Prison Planet 2010 "DOD lost 8.7 trillion dollars"
With the oil co. making billions, why are we subsidizing them? (ytf).
In the end, you will receive your JUST rewards. (YEA, THAT'S FAIR)
And that's the way it will stay Thom. Sure, it may get tweeked slightly here and there for cosmetic and soundbite purposes, but that's all. Any serious change will come from the grassroots up.
Yesterdays top news story already taken off the newswire--------
"Red Cross missing $500 mil." (YTF)
Okay guys, this is more complex than you make it out to be. First considering all taxes (property, income, sales etc.) the LA Times quoted a study that shows we have a flat tax. Bernie has often pointed out that the wealth of the US increased by $37 trillion from 2008 to 2012 (or 10?). All of that increase in wealth went to the top 7%. It sounds like the top 7% should pay all the taxes.
I consider what I just said as irrelevant. What should be relevant is the economy. I think the Larry Beinhart measure of the economy is what we should consider. Larry says we should look at 4 factors and determine which policy will raise all of them. The 4 factors are the GDP, the DOW, the number of jobs and the median pay (inflation adjusted) for those jobs. One should note tax revenue is not one of the factors. Mr. Beinhart has noted the top tax rate above 50% is the key policy that helps the economy measured by his metrics. One should also note that when reagan dropped the top tax rate below 50% that top earners paid more in taxes. They paid 2 to 3 times more. The economy suffered; especially, the median wage.
Dr econ: If you want more citizens to contribute to Federal revenues, then they need to be paid enough to do that. Instead of folks like the Waltons pocketing all the proceeds, how about a working class wage hike to equal the increase in productivity over the last few decades? If this economic justice became law, minimum wage would be around $22 per hour. I have to ask, how much work do you think the capitalist making tens of millions per year actually performs? That wealth is being extracted from those who actually work, spend, and contribute to an economy rigged against them.
I have to laugh when you right wing talking point guys defend the rich and degrade the low income citizens, as if it's some kind of crime that many don't earn enought to pay Federal income tax. The crime is that citizens are not paid enough to pay Federal income tax. Percentage wise, someone making 30 or 40 grand per year, pay a huge amount of their income in just property tax, sales tax/gas pump, and fees, etc. All added, we're paying the same tax rate citizens in the Democratic Socialist countries are paying, and getting only a comparative fraction in return.
Thanks for your response.
1) Thanks for aggreeging with me that Thom's title of this is false.
2) I am claiming that 86% of the government is paid by the wealthy, not that the wealthy pay 86%!
3) I am also claiming that most of the wealthy pay higher rates. Actually, I am just reading the wikki page, which for some reason you aren't. The page shows that the bottom 80% pay less than 20%.
4) You are confusing the marginal tax bracket with the amount people actually pay! I think Thom also does this. Look at the Wikki page.
5) You also quote from newer sources, so I thank you for that. The wikki page has the top 1% paying 29.5, you have 22%. However, I don't know if that is all federal or just income. Nor do I know if that is the bracket or actual, you did not include a source.
22% is still higher than the bottom 80%, which pay around 20%.
But I also think comparing income tax rates is really the way to go. Then, the bottom 40% have NEGATIVE tax rates, and the next 10% pays zero.
Now, with that fact alone, that should tell you a lot about our tax system. Our government spending (as opposed to insuring the poor), is mainly paid by the wealthy.
Chuckle8 wrote: " the LA Times quoted a study that shows we have a flat tax."
I am unfamiliar with that study, but it is flat because the non-wealthy people are paying for their social insurance through the government. The Federal tax rate is highly progressive according to the wikki page.
"how about a working class wage hike to equal the increase in productivity over the last few decades? If this economic justice became law, minimum wage would be around $22 per hour"
I think you need an overall gradualist strategy to improve the economy. These ridiculous minimum wage hikes will likely only encourage the last remaining jobs to disapear. I would say fix the minimum wage to inflation, and then at least it would rise a few percent a year and no one would complain.
You need an industrial policy, strategic tarriffs, double the people getting science degrees, and lots of other things that America is incapable of doing.
"That wealth is being extracted from those who actually work, spend, and contribute to an economy rigged against them. "
They are able to actually work because there was an opening for them to work for. Bill Gates bought DR. Dos for very little money, licensed it to IBM, and was able to hire thousands because of it. Does Bill work now? Of course not. But his decision making enabled him to hire thousands of people to work, spend and contribute to society.
"I have to laugh when you right wing talking point guys defend the rich and degrade the low income citizens, as if it's some kind of crime that many don't earn enought to pay Federal income tax."
Not at all. I'm just saying the government is paid by the rich and spends on the poor and working class. I'm not saying it shouldn't be that way. I'm saying that Liberals should stop lying to the people that the Government is some Fuedalistic enterprise extracting money from the poor and giving it to the rich.
It is a constant refrain and I am tired of it.
Econ writes "The fact is that the government is a massive system to redistribute wealth in the way of insurance to the poor and middle class."
The real fact is ...the top one percent own more than half of the country's wealth, and this is inequality continues to grow. The bottom 80 percent own only seven percent of the nations total wealth and this continues to decline. The wealth is getting redistributed alright, but not the way Fox has programmed you to believe.
The rich do not create jobs, a fair and moral economy, one in which the vast majority has plenty of money to spend, does. Share the Wealth!
I write: "The fact is that the government is a massive system to redistribute wealth in the way of insurance to the poor and middle class"
2950-10k writes: "the top one percent own more than half of the country's wealth"
I agree with both statements. Do you?
I am a liberal, but not a liar.
2950-10k writes: "The rich do not create jobs. a fair and moral economy, one in which the vast majority has plenty of money to spend, does."
First, the first part of that is obviously false, because there are some rich people who sell to rich people. Thus, the statement 'Some rich people create jobs' is true, and the statement "The rich do not create jobs" is false.
Employers actually have people create jobs descriptions, review qualificiations, post the jobs on the internet, then interview and select candidates. Because some employers are rich, that statement is not only false, but absurd. The employer is the agent responsible for hiring and creating the job.
However, it is true that the employer cannot create the job unless there is demand for the products the job produces. So, you could say 'The rich and the poor create jobs', but you cannot say 'The rich do not create jobs'. The latter is a nonsensical statement.
What would you say if someone said 'Oxygen does not create water'? Most people would think is a pretty stupid thing to say.
Now, the second part "a fair and moral economy, one in which the vast majority has plenty of money to spend, does." is also false. Every economy from North Korea to China to the US has jobs. The most equal to the most unequal. In all these places, many rich people are selling things to many poor people. Unfortunately, that is the way economics works.
“The rich are the most discriminated-against minority in the world. Openly or covertly, everybody hates the rich because, openly or covertly, everybody envies the rich. Me, I love the rich. Somebody has to love them. Sure, a lot o’ rich people are assholes, but believe me, a lot o’ poor people are assholes, too, and an asshole with money can at least pay for his own drinks.”
― Tom Robbins, Jitterbug Perfume
So lets make the little people pay even more by shifting taxes to corporate tax collectors. When are we going to get it through our thick skulls that corporations/businesses DON'T PAY TAXES, their customers do!!!! You want to make the tax system fair, tax the wealthy based on their net worth and scrap the capital gains tax. I'd suggest starting at 50% of net worth over 1 million.
Moreover stop these draconian fines for corporate malfeasance that the little people end up paying and start locking the leaders up. As a matter of fact instead on naming corporations name the human leaders in press announcements. Its time we know who the real culprits are.
Rather than fines on corporations, paid by the little people, fine the corporate leaders along with their jail time. How about making banks forgive all personal credit card debt, the little people would benefit the most and what a economic stimulus it would be.
Any chance of these ideas catching on, probably not.
David32, you think these fines that amount to 1 day's profit are draconian? Ha!
You could just as easily say people don't pay taxes, corporations do, because higher personal taxes mean people need a higher gross pay, passing the cost onto their employers. It goes in a cycle, and you're ignoring half of it.
Dr Econ -- Using Wikipedia as reference is a good way for people not to believe anything you say. Wikipedia is the same place that had Paul Revere fighting for the British.
Dr. Econ -- Why don't you tell us what you think the economy is? As a guide the economist who came up with the GDP said never to use the GDP to measure the economy.
I already mentioned the 4 metrics that I think should be used to measure the economy. Do you not agree? I think a fair tax structure would be one that improves the economy.
Dr. Econ -- I thought Bill Gates made his money by hiring the best lawyers around. He then stole the ideas of start-up companies that had not become big enough. For those that were to0 big, he bought them. He then proceeded to commit perjury saying he could not separate his operating systems from the application software. Bill Clinton was going after Microsoft with anti-trust laws.
W came in and said, I love billionaires and dropped the pursuit of justice. Germany didn't and fined Microsoft for $600 million.
"I thought Bill Gates made his money by hiring the best lawyers around".
Tell that to Google.
"Using Wikipedia as reference is a good way for people not to believe anything you say. Wikipedia is the same place that had Paul Revere fighting for the British. "
There is always the exception that proves the rule.
" corporations/busineses DON'T PAY TAXES, their
customers do!!!! - "
Too old to have been required to take high school economics?
Dr Econ -- How old are you? Bernie and I share the same birth year. When was economics ever required in high school?
The only way this will ever happen, and i regret to have to say it, is for the people to ban together, all working people, including police and fire fighters, doctors and nurses, lawyers and teachers, sanitation workers, all working people and revolt against the 1%. Voting will not work at this point. It might just be too late already.