Much of the political debate these days centers on taxes, particularly those not paid by very rich people like Mitt Romney. If he gets elected chances are good he and his pals will pay even less. It is important, therefore, to understand America’s tax policy in context. The chart accompanying this article (see below) helps to do this. While the article may only interest a few the chart should grab everyone’s attention…
America the Undertaxed
U.S. Fiscal Policy in Perspective
Andrea Louise Campbell | Foreign Affairs | Sept-Oct 12
Compared with other developed countries, the United States has very low taxes, little income redistribution, and an extraordinarily complex tax code. If it wanted to, the government could raise taxes without crippling growth or productivity. Tax reform is ultimately a political choice, not an economic one — a statement about what sort of society Americans want.
________________________________________________________________________________ Andrea Louise Campbell is a professor of Political Science at MIT.
Numbers can be cruel. They take away the soft, gauzy rhetoric that shrouds political platitudes and subject them to a hard-edged reality. So it is for the Ryan budget. The document was lengthy enough that it—and he—automatically acquired gravitas. Yet it was examined carefully by precious few, which is probably a good thing for Ryan. Here is the number that is perhaps the key to his view of the future: 3.75 percent.
To introduce this article I was going to tell a banker joke. The problem is that bankers don’t think they’re funny and normal people don’t think they’re jokes. That point is made clear in this article by Robert Reich on the LIBOR scandal…
The Wall Street Scandal of all Scandals
Robert Reich | RobertReich.org | 7 July 12
Just when you thought Wall Street couldn’t sink any lower – when its myriad abuses of public trust have already spread a miasma of cynicism over the entire economic system, giving birth to Tea Partiers and Occupiers and all manner of conspiracy theories; when its excesses have already wrought havoc with the lives of millions of Americans, causing taxpayers to shell out billions (of which only a portion has been repaid) even as its top executives are back to making more money than ever; when its vast political power (via campaign contributions) has already eviscerated much of the Dodd-Frank law that was supposed to rein it in, including the so-called “Volker” Rule that was sold as a milder version of the old Glass-Steagall Act that used to separate investment from commercial banking – yes, just when you thought the Street had hit bottom, an even deeper level of public-be-damned greed and corruption is revealed.
Most of us have heard that Mitt Romney makes lots of money being a ‘private equity’ investor. While that sounds impressive many of us don’t really understand what that term means. In this video Prof. Reich offers a clear explanation which may disturb you…
Checked your income tax rate lately? Chances are it’s not 15%…
Mitt Romney’s Taxes
David Firestone | NYTimes | 17 Jan 12
Having suggested at Monday night’s debate that he would release his 2011 tax returns in April, Mitt Romney must have realized he would need to inoculate himself against the inevitable public backlash over his annual income, where it comes from and how little tax he pays on it. He started this process Tuesday morning, when he told reporters in South Carolina that his effective tax rate is about 15 percent.
An effective tax rate of 15 percent means that most of his income comes from investments, as he acknowledged Tuesday. The rate on such capital gains income is far lower than the top rate of 35 percent on ordinary income, the kind that most people who receive weekly or monthly wages have to pay. (Investment income is also not subject to the payroll tax.)
As you listen to the litany of garbage spewing from the republican candidates this spring ask yourself what this country would be like with no weather reports, no highway repairs, no environmental controls, no limit on medical costs, no public schools and no foreign policy. Think I’m being extreme? Then you haven’t been listening to what these people are saying. Ever hear the phrase “Don’t throw the baby out with the bath water!” Rick Santorum wants to toss the baby, the water, the bathroom and all the plumbing. And the crazy part is… he might succeed!
The Decline of the Public Good
Robert Reich | RobertReich.org | 4 Jan 12
Meryl Streep’s eery reincarnation of Margaret Thatcher in “The Iron Lady” brings to mind Thatcher’s most famous quip, “there is no such thing as ‘society.’” None of the dwindling herd of Republican candidates has quoted her yet but they might as well considering their unremitting bashing of everything public.
What defines a society is a set of mutual benefits and duties embodied most visibly in public institutions — public schools, public libraries, public transportation, public hospitals, public parks, public museums, public recreation, public universities, and so on.
____________________________________________________________________________ Robert Reich is Chancellor’s Professor of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. He has written thirteen books, including The Work of Nations, Locked in the Cabinet, Supercapitalism, and his most recent book, Aftershock. His “Marketplace” commentaries can be found on publicradio.com and iTunes. He is also Common Cause’s board chairman.
I love Dionne’s quote of what Barney Frank says about the republicans in the House… “It consists half of people who think like Michele Bachmann and half of people who are afraid of losing a primary to people who think like Michele Bachmann.”
Two politicians with bluntness in common
E.J. Dionne, Jr | Washington Post | 20 Nov 11
Two politicians from different countries and with very different political pedigrees made news this week. Both spoke difficult truths and reminded us that we shouldn’t use the word “politician” with routine contempt.
The better-known story is the retirement of Rep. Barney Frank, a Massachusetts Democrat who was never afraid to make people angry — or to make them laugh. But more on Frank in a moment. Far too little attention has been paid on these shores to a remarkable speech in Berlin on Monday by the Polish foreign minister, Radoslaw Sikorski.
This article is adapted from a speech Bill Moyers gave in October at Public Citizen’s fortieth-anniversary gala.
Bill Moyers | The Nation | 4 Nov 11
During the prairie revolt that swept the Great Plains in 1890, populist orator Mary Elizabeth Lease exclaimed, “Wall Street owns the country…. Money rules…. Our laws are the output of a system which clothes rascals in robes and honesty in rags. The [political] parties lie to us and the political speakers mislead us.”
She should see us now. John Boehner calls on the bankers, holds out his cup and offers them total obeisance from the House majority if only they fill it. Barack Obama criticizes bankers as “fat cats,” then invites them to dine at a pricey New York restaurant where the tasting menu runs to $195 a person.
The following article, which appears at Nation of Change.com, is the clearest display of the total lunacy of all the so-called ‘flat tax’ schemes that I have seen. I have heard people say they like this fellow Cain simply because he offers new ideas regarding taxes. Unfortunately they haven’t actually read what those ideas are. This is like someone announcing that since we’re all fed up with airline discomfort here’s a new plan… let’s all jump out!
Cain’s Plan: Minimum Wage Earners Pay 460 Times More Taxes Than Millionaires
The question of the supposed simplicity and fairness of a flat tax keeps popping up every few years in political debate, most recently with the 9-9-9 plan of Herman Cain. I just wanted to look at what this kind of flat tax would look like for people across the income range to see how fair and simple it would be. One question needs to be addressed before we can begin to look at real numbers. How much needs to be spent every month to meet the requirements of what the majority of people would consider to be necessities? How much do we need to pay our rent/mortgage, utilities, food, clothing, medical expenses, etc.? Let’s say we need a minimum of $1,000.00 each month for these basic necessities. Before you say “$1,000 a month, that is way too…” Were you going to say large a sum, or small? Though this is an argument that should be addressed, perhaps we can save it for another article and agree to use the figure of $1,000.00 per month for now. Let us also add that half of that money will be used for non-taxable expenses such as rent/mortgage and half would be taxable by a flat tax similar to sales tax.