When we focus on the federal income tax, we miss all the taxes that low-income Americans do pay. The payroll tax, for instance. And state sales taxes. And lots of local taxes. Indeed,Citizens for Tax Justice, a left-leaning tax policy group, produces a study every year showing the total tax burden for different groups once federal, state and local taxes are taken into account. And when you include all the taxes people pay, then, as you can see in the graph atop this post, it turns out that most Americans do pay taxes, and they in fact pay about as much as the rich.
Since Republicans are back in the “St. Ronald” mode, hoping that Mitt Romney can channel the Gipper’s path to victory, a quick thought:
in the Reagan tax reform of 1986, all income, whether earned in salary or earned from investments, was taxed the same: as income. Today, capital gains…
Hmm.
The shape of American inequality. From Andrew Hacker.
Check how your income would be taxed at different countries’ marginal tax rates.
And a look at the history of taxes in the U.S. from Paul Solman.
(via rubenfeld)
Raise Taxes on Rich to Reward True Job Creators
By Nick Hanauer, Nov 30, 2011 Bloomberg News
It is a tenet of American economic beliefs, and an article of faith for Republicans that is seldom contested by Democrats: If taxes are raised on the rich, job creation will stop.
Trouble is, sometimes the things that we know to be true are dead wrong. For the larger part of human history, for example, people were sure that the sun circles the Earth and that we are at the center of the universe. It doesn’t, and we aren’t. The conventional wisdom that the rich and businesses are our nation’s “job creators” is every bit as false.
I’m a very rich person. As an entrepreneur and venture capitalist, I’ve started or helped get off the ground dozens of companies in industries including manufacturing, retail, medical services, the Internet and software. I founded the Internet media company aQuantive Inc., which was acquired by Microsoft Corp. (MSFT) in 2007 for $6.4 billion. I was also the first non-family investor in Amazon.com Inc. (AMZN)
Even so, I’ve never been a “job creator.” I can start a business based on a great idea, and initially hire dozens or hundreds of people. But if no one can afford to buy what I have to sell, my business will soon fail and all those jobs will evaporate.
That’s why I can say with confidence that rich people don’t create jobs, nor do businesses, large or small. What does lead to more employment is the feedback loop between customers and businesses. And only consumers can set in motion a virtuous cycle that allows companies to survive and thrive and business owners to hire. An ordinary middle-class consumer is far more of a job creator than I ever have been or ever will be.
Theory of Evolution
When businesspeople take credit for creating jobs, it is like squirrels taking credit for creating evolution. In fact, it’s the other way around.
It is unquestionably true that without entrepreneurs and investors, you can’t have a dynamic and growing capitalist economy. But it’s equally true that without consumers, you can’t have entrepreneurs and investors. And the more we have happy customers with lots of disposable income, the better our businesses will do.
That’s why our current policies are so upside down. When the American middle class defends a tax system in which the lion’s share of benefits accrues to the richest, all in the name of job creation, all that happens is that the rich get richer.
And that’s what has been happening in the U.S. for the last 30 years.
Since 1980, the share of the nation’s income for fat cats like me in the top 0.1 percent has increased a shocking 400 percent, while the share for the bottom 50 percent of Americans has declined 33 percent. At the same time, effective tax rates on the superwealthy fell to 16.6 percent in 2007, from 42 percent at the peak of U.S. productivity in the early 1960s, and about 30 percent during the expansion of the 1990s. In my case, that means that this year, I paid an 11 percent rate on an eight-figure income.
One reason this policy is so wrong-headed is that there can never be enough superrich Americans to power a great economy. The annual earnings of people like me are hundreds, if not thousands, of times greater than those of the average American, but we don’t buy hundreds or thousands of times more stuff. My family owns three cars, not 3,000. I buy a few pairs of pants and a few shirts a year, just like most American men. Like everyone else, I go out to eat with friends and family only occasionally.
It’s true that we do spend a lot more than the average family. Yet the one truly expensive line item in our budget is our airplane (which, by the way, was manufactured in France by Dassault Aviation SA (AM)), and those annual costs are mostly for fuel (from the Middle East). It’s just crazy to believe that any of this is more beneficial to our economy than hiring more teachers or police officers or investing in our infrastructure.
More Shoppers Needed
I can’t buy enough of anything to make up for the fact that millions of unemployed and underemployed Americans can’t buy any new clothes or enjoy any meals out. Or to make up for the decreasing consumption of the tens of millions of middle-class families that are barely squeaking by, buried by spiraling costs and trapped by stagnant or declining wages.
If the average American family still got the same share of income they earned in 1980, they would have an astounding $13,000 more in their pockets a year. It’s worth pausing to consider what our economy would be like today if middle-class consumers had that additional income to spend.
It is mathematically impossible to invest enough in our economy and our country to sustain the middle class (our customers) without taxing the top 1 percent at reasonable levels again. Shifting the burden from the 99 percent to the 1 percent is the surest and best way to get our consumer-based economy rolling again.
Significant tax increases on the about $1.5 trillion in collective income of those of us in the top 1 percent could create hundreds of billions of dollars to invest in our economy, rather than letting it pile up in a few bank accounts like a huge clot in our nation’s economic circulatory system.
Consider, for example, that a puny 3 percent surtax on incomes above $1 million would be enough to maintain and expand the current payroll tax cut beyond December, preventing a $1,000 increase on the average worker’s taxes at the worst possible time for the economy. With a few more pennies on the dollar, we could invest in rebuilding schools and infrastructure. And even if we imposed a millionaires’ surtax and rolled back the Bush- era tax cuts for those at the top, the taxes on the richest Americans would still be historically low, and their incomes would still be astronomically high.
We’ve had it backward for the last 30 years. Rich businesspeople like me don’t create jobs. Middle-class consumers do, and when they thrive, U.S. businesses grow and profit. That’s why taxing the rich to pay for investments that benefit all is a great deal for both the middle class and the rich.
So let’s give a break to the true job creators. Let’s tax the rich like we once did and use that money to spur growth by putting purchasing power back in the hands of the middle class. And let’s remember that capitalists without customers are out of business.
(Nick Hanauer is a founder of Second Avenue Partners, a venture capital company in Seattle specializing in early state startups and emerging technology. He has helped launch more than 20 companies, including aQuantive Inc. and Amazon.com, and is the co-author of two books, “The True Patriot” and “The Gardens of Democracy.” The opinions expressed are his own.)
FACT: Reagan’s ‘82 and ‘84 deficit reduction plans were 80% tax increases.
(via motherjones)
In a typical year around 35-40 percent of households don’t owe any federal income tax. But most of them pay a significant share of their incomes in other taxes — particularly payroll taxes, as the CBO report points out:
- People in the bottom four-fifths of the income scale pay more in payroll taxes than federal income taxes, on average. The Tax Policy Center estimates that payroll taxes (including both the employee and employer shares) outweigh federal income taxes for 82 percent of households. (Most economists agree that workers pay not only the employee share of payroll taxes but the employer share as well in the form of lower wages.)
- Working-poor and middle-class Americans pay a much larger share of their incomes in payroll taxes than high-income people do (see graph). That gap has increased over the past 30 years, the CBO report shows. In addition, the share of federal revenues coming from payroll taxes has gone up while the share coming from income taxes has gone down.
- When you count all federal taxes (income, payroll, and excise), even people in the bottom fifth of the income scale are net federal taxpayers, on average. This group, whose after-tax incomes averaged just $17,700 in 2007, paid 4.7 percent of their incomes in federal taxes that year.
Moreover, these figures don’t consider the significant state and local taxes that virtually all Americans pay — taxes that, like federal payroll and excise taxes, tend to demand more of lower-income people relative to their incomes. (via Off the Charts Blog)
“53%” my ass.
If You Want To Be A Winner In The GOP, You Take The Oath! The Tax Purity Pledge!
05/23/2011 If you want to run for office as a Republican candidate and you want to win, you must take an oath and swear to Grover Norquist that you will never, ever, ever raise taxes. Defy Norquist and you will be denied an elected post. Go back on your oath and the consequences are swift and harsh: you will lose your position. When asked what happens to someone who goes back on his word and violates the pledge, Norquist says, “Ask George H. Walker Bush how his second term was?” Who is this dictator that can single-handedly decide winners and losers? Where did he come from? Why does he have so much power?
The answers to these questions are more than complicated. Like everything with the modern GOP, Norquist has more tentacles than an octopus and he is clearly the self-annointed and appointed ruler of the Republican party today. His past is full of scandal and corruption, yet with the exposure of each and every scandal, Norquist only continues to increase his power base. Most people in America have never even heard of him. Those that have usually know very little about him.
Grover Norquist was born in October of 1956. He is a native of Pennsylvania and his father was vice-President of Polaroid. Norquist went to Harvard where he graduated with a BA, as well as an MBA. His first entry into the world of politics came when he was barely a teenager and young Grover offered his services as a volunteer for Richard Nixon’s 1968 Presidential campaign. From there, Norquist’s early career included work as both an a economist and speech writer for the Chamber of Commerce. Today, he is the President of Americans For Tax Reform, a group he founded in 1985. He serves on many boards of many conservative groups, including the NRA and the Nixon Center. He also co- founded the Islamic Free Market Institute.
According to the website of Americans For Tax Reform, Norquist currently has more than 1100 signers of his Tax Protection Pledge on the state level. On the federal level, his site boasts that as of 2009, 172 members of the House and 34 members of the Senate had signed, including Democrats Ben Nelson of Nebraska and Senator Arlen Specter of Pennsylvania. Although latest figures have not been published, most believe that every single Republican in the House and Senate right now, with the exceptions of Olympia Snowe of Maine and Dick Lugar of Indiana have signed ‘The Norquist Pledge’. Not only does Norquist recruit candidates on the state and local level, he is always working behind the scenes to find what he considers appropriate candidates on the federal level.
Norquist’s philosophy of government is simply stated. “I don’t want to abolish government. I simply want to reduce it to the size where I can drag it into the bathroom and drown it in the bathtub.”
Norquist believes in tax cuts and deregulation, so much so that the only two things that the federal government should be a part of are the miltary and police protection. That means that Norquist is against:
- government involvement in education
- environmental controls or regulation
- FEMA
- Medicare, Social Security and Medicaid
- regulations or consumer protection that control any aspect of business or banking
- the CDC, the Department of Agriculture, the Food and Drug Administration
The list could go on and on. Government agency? You name it; Norquist wants it gone! Norquist has been instrumental in most, if not all of the GOP efforts to ‘starve the beast’ of government. The theory is so basic that it does not require a degree in economics. The more and more you cut taxes, the fewer and fewer government programs you can offer. No revenue comes in and it then follows that there is no revenue to spend. Period! Norquist was directly instrumental in the design of the the Bush tax cuts. Norquist NEVER intended that they be temporary. The Bush tax cuts were to be the beginning. More and more tax cuts were and are planned. The economy does not matter, the global status does not change anything. The goal is to cut and cut and cut.
Mr. Norquist was the co-author of Newt Gingrich’s Contract with America which was precipitated upon the goals of conservative America: shrink government, decrease taxes and regulation, promote entrepreneurial activity, and at the same time, get rid of any public assistance programs and greatly limit tort protection. During Norquist’s tenure at the Chamber of Commerce, he learned the power of binding together and promoting a huge network of conservative business owners. Norquist knew that if conservative people were put into key positions, they would have access to change public policy, with or without public support.
Horowitz Insists That Norquist is a Muslim Terrorist Sympathizer At Norquist’s Own Event!
The Scandals Or Why Isn’t Norquist In Prison?
Grover Norquist has been a player during many scandals. The first controversy that he was involved in was weapon sales to the Contras during the Iran-Contra scandal. While Oliver North went to prison, Norquist went free. Every single scandal, Norquist seemed to have a ‘Get Out of Jail Free’ card.
- “Casino” Jack Abramoff and Grover Norquist were friends for years. Norquist managed Abramoff’s early campaign to become chairman of the College Republican National Committee. Norquist was directly implicated in the funneling of money for Abramoff during the gambling scandal that sent Abramoff and dozens of others to prison. Norquist did not go to prison.
- The K Street Project Lobbying scandal had Norquist’s name all over it. After the elections of 1994 in which the GOP overwhelmingly took control of Congress, Norquist and his buddies, Ralph Reed and Jack Abramoff, along with Tom Delay, pressured lobbying firms to hire key Republican party members. They also designed spread sheets and dossiers, showing political contributions and then bartered access to politicians. The more money donated, the more access. The less money, the less access. The ‘pay to play’ game became illegal after this scheme was unearthed. Tom Delay went to prison, Abramoff went to prison, Reed barely escaped prison and Norquist came away again unscathed. Reed, once disgraced, has since come back as the head and founder of the Faith and Freedom Coalition, which is eerily similar in its goals to every other conservative organization. On a side note, Rick Santorum was also a player in the K Street scandal. He was, by most accounts, the Senate liason who met with the lobbyists every week and ‘scheduled’ access to his Senate colleagues in the pay to play scandal.
- Most recently and even in the not so distant past, Norquist has been accused by some conservatives of being a supporter and money launderer for Islamic terrorist groups. His one time partner and the co-founder of Americans For Tax Reform, Kahled Saffuri, previously worked for Abdurahman Alamoudi at the American Muslim Council. It was with $20,000 from Alamoudi, that Norquist founded the Islamic Free Market Institute. While that sounds innocuous enough, just a few years after that, Alamoudi was arrested with well over a quarter of a million dollars given to him by Moammar Gaddafi (Libya) to finance the support of jihad. Alamoudi is serving a 23 year prison sentence. Alamoudi was so well-placed that it was he who helped establish and approve certain Muslim chaplains in the military. Many, both conservative and liberal, have questioned not only Norquist’s ties to Alamoudi, but Alamoudi’s ties to the Department of Defense. For more information about Norquist’s partner, Saffuri, link to: http://victoryinstitute.net/2010/09/30/khaled-saffuri-where-is-he-now/
- Norquist has been most vocally criticized by Frank Gaffney, the extreme right wing head of the Center For Security Policy. Gaffney’s sanity has often been questioned, but he has been consistent in his distrust of Grover Norquist and even goes so far as to label him a ‘Muslim extremist’. Most recently, Norquist was slammed at his own CPAC event, for being a supporter of the Muslim Brotherhood by the more well-respected conservative, David Horowitz. The battle is being waged by conservatives on the one side, who believe that Norquist is a sympathizer and funnels money and influence to Hamas, and those on the other side, who believe that Horowitz and Gaffney are simply paranoid.
- Most recently, Senator Tom Coburn, (R), from Oklahoma is waging a war with Norquist. Norquist has called Coburn out for violating the pledge and Coburn has fired back, saying in his defense, “…which pledge is the most important? Is it the pledge to uphold your oath to the Constitution of the United States or a pledge from a special interest group who claims to speak for all of American conservatives when, in fact, they don’t.” Perhaps Coburn should ask one-term President George H W Bush how well his second term worked out. Maybe Coburn doesn’t realize that Norquist has stated that Coburn will face harsh consequences for his violation of the purity pledge. Perhaps, Coburn is not aware that Norquist has over 100 thousand big time corporate donors, just ready to do his bidding. Coburn, on April 25th bumped it up a notch and said, “Norquist is chief cleric of Sharia tax law”. Norquist has stated that “Coburn lied to get elected!” The war is heating up. This is going to be a good one to watch!
Norquist Is The Most Powerful Man Not Sitting In The White House!
Lawrence O’Donnell, MSNBC host of the Last Word calls Grover Norquist “the most powerful man in America that does not sit in the White House.” O’Donnell may be correct. Norquist has ties to countless corporations, including tobacco and big oil, lobbyists, and most of the conservative think tanks in the country. The ever-powerful Koch brothers are supporters. Norquist is the self-appointed managing director of the hard core right and he takes his position seriously.
If you have never heard of him, it is time to get acquainted. This man has influenced EVERY Republican legislator beginning with President Reagan. Go easy! Start with Wikipedia and go from there. The articles are endless, perhaps because his power is endless. He is the GOP king maker, but he is the real king! The ruler of the Republican party! And don’t forget! The road to any GOP-controlled White House is conditioned upon a signature on a ‘pledge’ to the king,
The Pledge
Taxpayer Protection Pledge
I,________________, pledge to the taxpayers of the (____district of the) state of ________________and to the American people that I will: ONE, oppose any and all efforts to increase the marginal tax rate for individuals and business; and TWO, oppose any net reduction or elimination of deductions and credits, unless matched dollar for dollar by further reducing tax rates.
WONDER WHY THE GOP VOTES NO ON REMOVING LOOPHOLES OR SUBSIDIES THAT PROTECT THE RICHEST OF CORPORATIONS?
They are not allowed to vote “YES”! Even if their constituents disagree, they are bound by their oath to Norquist first and foremost. That oath is primary. Even primary to their oath to defend and protect the Constitution of the United States.
Fair Share?
Contribution of individual and corporate income tax to government and social infrastructure over time. I made this graph from official tax revenue data of the US government. It shows the ratio of percent of GDP of individual tax revenue to percent of GDP of corporate tax revenue over time. As you can see, even though they consume far more public resources and earn greater profits, the share being paid by corporations to our infrastructure, roads, transportation, education of workforce, etc has decreased greatly over time, shifting the burden of all public infrastructure to labor.
Blue is people. Gold is corporations. What’s graphed is the bill for running the country. It goes from 50-50 to individuals paying most of the bill.
