Arkady
President
I'm working on my taxes right now and, man, am I getting hammered! I will have paid $69,000 in federal taxes alone, this year.
I don't have a problem with paying that much -- I make a good income, and should pay accordingly. I pay relatively little compared to what someone in my situation would have paid during our economic golden age. Today, if you earn $315,000, married filing jointly, the federal rate you pay on your top dollar is 33%. If this were 1954, and we adjusted that same $315,000 downward for inflation, someone earning that much would be paying 53% on his top dollar. So, we're talking about a 20-percentage-point drop. Given how well the economy and society did in that earlier era from the 1950s through the 1960s, when GDP growth was stronger, poverty was dropping, incomes were soaring, and the nation was accomplishing great things like going to the moon and building the Interstate Highway System, I'd be perfectly comfortable paying considerably higher taxes.... with one proviso.
The proviso is this: if I'm going to be paying high taxes because of fairly high earnings, I want to know that those who earn even more pay even more, as they did during that economic golden era. Back when people like me paid 53% on their top dollar, in 1954, the very wealthy could pay as much as 91% on their top dollar. These days the income brackets flatten out only a little above my level. Even if you earn hundreds of millions of dollars per year, the most you'll ever pay is 39.6% -- just a few points above what workaday professionals are paying. In the Eisenhower and Kennedy years, the gap between what workaday professionals paid and what the ultra-rich paid was nearly 40 points -- commensurate with the size of the gap between the professionals and the poor.
It's even worse than that. Although, in theory, the very rich pay a bit higher rates than I do, in practice they often pay at much lower effective rates than me, which was not the case of the very rich in the economic Golden Age. What drives my taxes up so high is that I actually earn nearly all of that money through productive labor, and thus most of it is paid at 28% and 33%. If I "earned" that money by sitting around collecting the fruits of other people's labor, by way of dividends or capital gains, then I could pay 15%. And if I had the kind of money needed to play games with that income, by moving it off-shore or slipping it into a tax advantaged accounts (like Mitt Romney's infamous $102 million IRA), I could pay even less. Romney paid an astonishingly low 14.1% effective tax rate in a recent year -- lower even than the minimum theoretical rate for capital gains and dividends.
No wonder we have such huge deficits, despite years of spending growth that have been the lowest since the post-WWII demobilization. No wonder we're piling on the debt despite record-high real GDP/capita, and social spending levels that are considerably lower, per capita, than in any other major wealthy nation. We're basically allowing our national wealth to pool in the hands of a few ultra-rich people, who pay shockingly low taxes. The Mitt Romney types have a good scam going -- they acquire a greater and greater share of the national wealth, but keep an angry cohort of much-poorer upper-class people stirred up against taxes, which hit those lower-upper-class people hard even as the ultra-rich skate by. The ultra-rich turn the upper-middle and lower-upper classes against the poor (and especially poor minorities). They get everyone beneath them fighting over table scraps while they belly up to the banquet. They know as long as they can keep the resentments of the peasants stoked (and we're all peasants to them), few people will stop and ask why we've let them set the system up so that all new economic gains, and then some, flow exclusively to their elite caste.
I don't have a problem with paying that much -- I make a good income, and should pay accordingly. I pay relatively little compared to what someone in my situation would have paid during our economic golden age. Today, if you earn $315,000, married filing jointly, the federal rate you pay on your top dollar is 33%. If this were 1954, and we adjusted that same $315,000 downward for inflation, someone earning that much would be paying 53% on his top dollar. So, we're talking about a 20-percentage-point drop. Given how well the economy and society did in that earlier era from the 1950s through the 1960s, when GDP growth was stronger, poverty was dropping, incomes were soaring, and the nation was accomplishing great things like going to the moon and building the Interstate Highway System, I'd be perfectly comfortable paying considerably higher taxes.... with one proviso.
The proviso is this: if I'm going to be paying high taxes because of fairly high earnings, I want to know that those who earn even more pay even more, as they did during that economic golden era. Back when people like me paid 53% on their top dollar, in 1954, the very wealthy could pay as much as 91% on their top dollar. These days the income brackets flatten out only a little above my level. Even if you earn hundreds of millions of dollars per year, the most you'll ever pay is 39.6% -- just a few points above what workaday professionals are paying. In the Eisenhower and Kennedy years, the gap between what workaday professionals paid and what the ultra-rich paid was nearly 40 points -- commensurate with the size of the gap between the professionals and the poor.
It's even worse than that. Although, in theory, the very rich pay a bit higher rates than I do, in practice they often pay at much lower effective rates than me, which was not the case of the very rich in the economic Golden Age. What drives my taxes up so high is that I actually earn nearly all of that money through productive labor, and thus most of it is paid at 28% and 33%. If I "earned" that money by sitting around collecting the fruits of other people's labor, by way of dividends or capital gains, then I could pay 15%. And if I had the kind of money needed to play games with that income, by moving it off-shore or slipping it into a tax advantaged accounts (like Mitt Romney's infamous $102 million IRA), I could pay even less. Romney paid an astonishingly low 14.1% effective tax rate in a recent year -- lower even than the minimum theoretical rate for capital gains and dividends.
No wonder we have such huge deficits, despite years of spending growth that have been the lowest since the post-WWII demobilization. No wonder we're piling on the debt despite record-high real GDP/capita, and social spending levels that are considerably lower, per capita, than in any other major wealthy nation. We're basically allowing our national wealth to pool in the hands of a few ultra-rich people, who pay shockingly low taxes. The Mitt Romney types have a good scam going -- they acquire a greater and greater share of the national wealth, but keep an angry cohort of much-poorer upper-class people stirred up against taxes, which hit those lower-upper-class people hard even as the ultra-rich skate by. The ultra-rich turn the upper-middle and lower-upper classes against the poor (and especially poor minorities). They get everyone beneath them fighting over table scraps while they belly up to the banquet. They know as long as they can keep the resentments of the peasants stoked (and we're all peasants to them), few people will stop and ask why we've let them set the system up so that all new economic gains, and then some, flow exclusively to their elite caste.
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