Monday, August 23, 2010

A VERY TWISTED VIEW ON TAXATION!

"Taxes are the dues that we pay for the privileges of membership in an organized society."
--Franklin Delano Roosevelt --

"I like to pay taxes. With them I buy civilization."
-- Oliver Wendell Holmes --

"When there is an income tax, the just man will pay more and the unjust less on the same amount of income."
-- Plato --

"Another means of silently lessening the inequality of property is to exempt all from taxation below a certain point, and to tax the higher portions of property in geometrical progression as theyrise."
--Thomas Jefferson to James Madison, 1785 --



Former U.S. Senator Mark Dayton is now running for Governor of Minnesota, in part on a pledge to raise taxes on the state's very wealthiest residents. The outgoing conservative Republican Governor, Tim Pawlenty, refused to raise taxes during his two terms in office, and as a result, the state will be faced with a severe budget shortfall next year. So taxes MUST be raised, as spending has already been cut back to the point where the state is starting to suffer. Dayton has thus proposed raising taxes on the rich, as he knows the middle and working classes are strapped and the wealthy have oceans of money since their taxes have been so tremendously reduced under George W. Bush. Dayton himself is a wealthy heir to a large local department store chain, and he understands that, in economic times like these, the wealthy should indeed pay their "fair share," a philosophy Founding Father Thomas Jefferson believed in but today's conservative Republicans and teabaggers obviously do not share. Naturally, this has caused quite a stir in conservative Republican and Tea Party circles, because there is nothing they hate worse than paying taxes, and they especially hate it when tax increases are levied on the uppermost income brackets. Below is a letter to the editor I saw recently in the Minneapolis Star Tribune. It is typical of the distorted and mistaken attitudes many conservatives have toward the topic of taxation.

"Mark Dayton's 'tax the rich'' campaign slogan is so distasteful, I am embarrassed for its author.

The very thought that citizens who likely made better decisions (and who studied, practiced, worked harder, sacrificed more and took bigger risks) should be forced to pay a higher rate of taxes than those who did less to prepare for life defies logic.

I am no more inclined to go next door and steal my neighbor's lawnmower because it is better than mine than I am to ask my government to tax his earnings at a higher rate than mine. It's the same thing."


THIS LETTER IS SO DISTASTEFUL I AM EMBARRASSED FOR ITS AUTHOR!

The man who wrote this is not alone in his belief in the supposed evil of more heavily taxing the wealthy. He has many millions who believe just as he does and are reacting out of a selfish fear that someday their taxes may rise as well. Here is why he and they are all wrong.

First, it is rash, arrogant, and unjustly presumptive to assume that all who fall into lower income brackets, or who favor higher taxation for the very rich, made poorer decisions, didn't study enough, didn't work hard enough, haven't sacrificed, or didn't take as many or high enough risks than did those at the top tiers of the income scale. In life, many uncontrollable factors can enter into a person's having or not having attained a top income level. Illness and physical handicaps can and do play a role. So do home and environmental conditions during a person's formative years. Clearly, those from broken homes or raised by alcoholic parents are at a severe disadvantage when it comes to obtaining desirable and productive study or work habits, or cultural background (i.e. their "preparation for life"). Natural disasters also play a role in creating overnight poverty which can and most definitely does limit one's options.

Second, it is equally presumptive for this letter writer to accept, without question, on face value alone, that those in the highest income brackets all attained their wealth legally, ethically, or as a direct result of having worked hard, studied hard, or lived a proper life. There are many perched at the top who lied and stole their way up there, by taking every opportunity they could to shortchange their suppliers, customers, lenders, and employees, and who have repeatedly cheated on their taxes to maximize their own profit. There are numerous other "trust funders", those who inherited great wealth and do not work or need to work, and who cruise through life skimming off the top of investment "earnings." Still others were bequeathed a cushy business or business position. Yet others exported millions of good-paying American jobs overseas to make huge amounts of money off the hard labor of those being paid slave wages. These are all hardly good or ethical examples to follow, and that the letter writer should automatically exempt them from higher taxation on the basis of their having attained greater wealth regardless of the means is what defies logic. Regarding attaining wealth or desrving lower taxes because one works hard would mean that all engaged in backbreaking manual labor or put in long hours at work or take great risks should all be billionaires or tax-exempt, by this person's reasoning. But, as we all know, your average construction or warehouse worker, stockboy, or restaurant cook or server are not billionaires and do not enjoy the highest amount of relative economic comfort after taxes. Certainly not the same comforts trust funders enjoy.

Third, the letter writer's analogy of stealing his neighbor's mower because it's better than his is a seriously flawed one, as is his assertion that the government is somehow stealing from those who make fabulously high incomes by taking a higher percentage of that income than it does from those below that level. In the lawnmower example, had the neighbor held him down in earnings so that HE rather than the writer could afford the better mower, the writer would be more than justified to complain. For many in the lower income brackets have unjustly had their wages frozen or lowered, or their jobs sent elsewhere, at a time their company owners' incomes have soared. Not only that, but these workers pay nearly double the tax rate on income earned from work they actually performed than what wealthy trust funders or well-to-do investers pay on dividends they have been paid for doing little or no work at all to "earn " THAT easy money! This is grossly unfair and indefensible. As proven above, Thomas Jefferson was a firm believer in a progressive income tax, whereby those able to enjoy a greater amount of fruit from their work should justifiably pay a greater percentage on the proceeds of that work than those not so fortunate. Among rational people the world over, this is an accepted principle, as you will see evidenced by the upcoming table below.

Conservative Republicans and Tea Party activists are big crybabies when it comes to the issue of taxes. They feel so put-upon to have to pay taxes, or to have to pay more than those who make less money than they do. They conveniently forget that taxes fund education, defense, transportation, disaster relief, and provide a much-needed safety net for the elderly, sick, and handicapped. Of course, this means nothing to uncaring people like the letter writer, or his like-minded cohorts among Republicans and teabaggers. As long asTHEIR bellies are full, they don't give a damn about anybody else! They take the condescending attitude that they are somehow "above" paying taxes, or that paying taxes just for "the little people." They have the totally wrong and self-centered view that taxes are a punishment for them and that they are much higher here than in the rest of the world. The data below shows this supposition to be utter nonsense.

Top Tax Rates Around The World

KEY: Corp.= top corporate tax rate; Individ.= top individual tax rate; VAT= Value Added Tax (a sort of sales tax used in many of these countries. The figure shown here is the maximum, and essential items like food often carry a much lesser rate).

Country /Corp. /Individ. /VAT

Australia /30%/ 45% / 10%
Belgium / 34% / 50% / 21%
Canada / 18% / 29% /15%
China / 25% / 45% / --
Denmark /25% / 63% / 25%
France / 33% / 50$ / 19.6%
Germany /29.8% / 45% / 19%
Japan / 40.69% / 50% / 5%
Mexico / 28% / 29% / 18%
Netherlands / 25.5% / 52% /19%
Sweden / 26.3% / 59% / 25%
United Kingdom / 28% / 50% / 17.5%
United States /39% / 35% / 0-10.25%*


* The U,S, has no national VAT. These figures represent average state and local sales taxes.

A close examination of this information reveals that OUR top income tax rate is WELL BELOW that of all other industrialized countries shown, save for Canada and Mexico, and their rate is not that much lower than ours. And, while many of our states also have an income tax, so too do a number of the provinces in other countries. With their higher tax rates, these other countries are able to provide quality universal health care, longer vacations for workers, and they do not, for the most part, have the depravity of slums or the huge disparity of wealth and living conditions found here. Most important to note, their economies are nowhere near collapsing as a result of having higher taxes on their wealthiest citizens!Also, all of these countries except China have a Value Added tax, which is considerably higher than our own state and local sales taxes. So America's wealthy, teabaggers, and Republicans are being very self-centered when complaining about tax rates here, especially when compared with everyone else. And the citizens of these countries have NOT, by and large, been fleeing en masse to the lesser-taxed United States. For they have learned long ago that government has the responsibility to ensure the well-being of ALL its citizens, not just the wealthy or a privileged few. They do not have the conservative American attitude of grab-whatever-you-can and "I've got mine and to hell with you!"

Another cry of lament that teabaggers and conservative Republicans love to make is that our taxes are far higher today than they have ever been. This, too, is wholly untrue, as you will see from the chart below.

Highest individual income tax rates at various points in our history:

1944-45 94%
1952-63 92%
1954-63 91%
1964 77%
1965-67 70%
1982-1986 50%
1993-2000 39.6%
Currently 35%


FAR from being persecuted and punished, those in America's top tax brackets have been getting by with economic murder since 201. Rather than investing in and strengthening the country's infrastructure, they instead greedily and foolishly chose to invest in cheap, foreign labor and the development of plants outside our borders. Many also stupidly engaged in market speculation in the quest for even more easy money and huge windfalls, the direct result of which was market collapse and our current Great Recession. Others today are just sitting on their money, as millions suffer from unemployment and underemployment and our infrastructure continues to crumble. These people do not deserve special or bigger tax breaks. They should be paying MORE, not less, and their continued idleness and attempts to make even more easy money amounts to THEIR punishing of our government and society, not the other way around as they claim!

It should be noted by conservative Republicans and teabaggers that during the periods of very high top bracket taxation (higher than 40%) our economy never collapsed and in fact grew tremendously, along with employment figures. Mark Dayton is absolutely right, and that is why he will get my vote. The letter writer and those of like mind are dead wrong. Their claims on the dire consequences that will follow a VERY modest 4.6% increase on the top bracket - the jobs that will not be created and that unemployment will rise - are all refuted by past history. To make such claims gives proof of the fact that they, and especially the letter writer who prompted this post, are pitifully short-sighted, self-centered, and greedy, as well as having an incorrect and very twisted view on the entire subject of taxation.

UP NEXT: THE CAMPAIGN SPEECH EVERY PROGRESSIVE MUST GIVE!

6 comments:

TomCat said...

Very well done as always, Jack. Thanks. One key difference, also, is that the other countries you listed spend the majority of what they receive in taxes on services for the people. In sharp contrast, only a small percentage of tax receipts in the US go for services to people. Far more goes to corporate welfare.

reggieyoungkid said...

Im loving what you wrote cause its very true that all the money that we pay for taxes goes to the coperate welfare and little goes to the american people. Not only is the welfare people living on our taxes but also the government.

Jack Jodell said...

Thanks, TomCat. And let's not forget our vastly overbloated military (although a lot of our corporate welfare DOES go to defense contractors...
---------------
Thanks for styopping by, reggieyoungkid. The sad fact is that the very wealthy are sitting on their money and aren't investing it in new jobs paying good wages for American workers. They push for cuts in capital gains taxes and hold their hands out for subsidies while at the same time pushing for cuts in funds that go directly to struggling individuals. Kind of a double standard, isn't it?

Tim said...

You folks hit on the key elements.
I have to wonder how much would be saved if the USA stopped being the policeman of the World. Closed all foreign bases and change how we use our Military. Probably a Buck or two.

mud_rake said...

The Dems ought to grow a pair and call out the idiocy of the GOP in calling for a repeal of what THEY voted for several years ago. THEY were the ones who set 1/1/11 as the TARGET date for the expiration of the tax cuts. They did this so that the deficit would not be engorged do greatly.

Speak out you fumbling DEMS!

Jack Jodell said...

Tim,
Very good point there---------------------------------
mud_rake,
You are RIGHT ON!!!