Underlying my belief in a progressive taxation system is the idea that those who make the most money are the ones who have benefited most from the American system. Without an educated labor force, an infrastructure that promotes commerce, a system of institutions that spur growth, and the social stability provided by social programs, the wealthiest Americans would not be where they are today. As such, they have a responsibility to pay a higher percentage into the system than other Americans.
Furthermore, to view taxation only in terms of income and wealth taxes is to oversimplify taxation. Payroll taxes are a flat 7.65% of earnings up to $85,000. These taxes fund Medicare and Social Security, and are funded primarily by the middle and working classes. It’s not fair for a $250,000 a year executive to pay a lower percentage of his earnings than an entry-level associate into Social Security and Medicare. Property taxes and sales taxes are also fixed-rate taxes that tend to take a bigger chunk out of the incomes of middle and working class families. Sure, sales tax is a tax on the consumption of goods, but the wealthy don’t spend as much of their income on goods as do other Americans. Add to this the various fees we pay to various local and state agencies, and you will find that the discrepancy between taxation of the richest Americans and the rest of us is not that great. Finally, the wealthy have many options to protect their wealth from taxation that are simply not available to those with lower incomes.
As for the Libertarian argument against taxation and government, I’d like to see them take over a country and implement their ideas. Let’s see how a purely market-based society runs, where every family has to pay for their own education and roads, where there is no health insurance for the elderly and poor, where people who lose their jobs have nothing to fall back on, where no one protects consumers from corporations that lie, where no one insures bank deposits against the failure of that institution, and destruction of the environment is standard business practice. Libertarians are so simple.
The government is not a burden on the people. The government should be the agent of our society and civilization.
There’s nothing better than data to back up an argument. Unless you’re talking to an imbecile who, when confronted with facts, will deny the veracity of the data and attack the source as a member of a conspiracy of some sort. In those cases, there’s nothing better than a gun to back up an argument.
Back to the point:
The US Census bureau has lots of data, and publishes a lot of reports that talk about who we are as a nation, and more importantly, where we’ve been. For instance, the creatively-titled Money Income in the United States report talks about just that. I’ll wait while you follow that link above and download the PDF.
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Ready?
Turn to page 25. Share of Aggregate Income Received by Each Fifth and Top 5 Percent of Households: 1967 to 2001.
If you examine the Share of aggregate income columns, you will see that every quintile (20%) of the population has lost some of its share of income except for the highest quintile. In fact, most of this increase in share of income occurs for the highest-earning 5% of Americans. Note that these are households that last year made $150,499 and up (probably after taxes and deductions, but I’m not sure).
If you chart the percentages over time, you notice that the increases in income share for the highest-earning Americans begin around 1982. This is the Reagan tax cut. You will also notice that there is a huge jump from ’92 to ’93. This is the Bush recession. The interesting thing is that both the tax cut and the recession were opportunities for the highest-earners to get a larger share of aggregate income.
Let’s look at some real numbers, too. From 1982 to 1992, the upper limit for quintiles 1-4 rose 4%, 6%, 9%, and 11% respectively. The lower limit for the 5% of income-earners rose 14%.
This may be a gross simplification, but if there were any doubt in your mind that supply-side, “trickle-down” economics truly is “voodoo” economics, just look at the effects. The highest-earners raked it in while everyone lost out. It’s true that all incomes rose over the ten year period, but with inflation, those increases are either negligible or are in fact decreases.
That isn’t to say that trickle-down economics doesn’t work. It’s very effective at redistributing the income and wealth of this nation to the highest-earning and wealthiest Americans. It’s very effective at earning Republicans $2000 checks from a grateful wealth class. It just doesn’t do jack shit for the economy, and anyone who claims it’s Keynesian is full of shit.
What about Clinton?
Well, Clinton raised taxes on the wealthiest, but you will notice that this has little negative effect on income share for the highest-earners throughout Clinton-Gore. So either they didn’t raise taxes high enough, or they raised taxes on wealth (capital gains, etc.), or the economic expansion and tech bubble mitigated the tax increases, or higher-paying jobs generally saw faster wage inflation than lower-paying jobs.
…with the exception of Jeremy’s, of course, but if Bister, Ester, and Jacobs had thrown in a few profanities and exclamation marks, they could have given him a run for his money.
Donna Bister, Marc Estrin and Ron Jacobs: Vermonters on Howard Dean
I think it’s important to read the criticism, though I think this article would be better served by providing endnotes or links to backing documentation.
That said, I think one of the most disturbing thing in Dean’s record (as it was in Clinton’s) is the bogus Welfare Reform programs. But I’m not a single-issue activist, so this is not going to stop my support of Dean. Especially when the alternative is certainly going to be more jobs lost, higher tax burdens on the middle class and poor, attacks on workers’ rights, etc.
Most importantly, though, I don’t buy the line Bister et. al. push about there being no difference between Bush and Dean. That’s a fucking lie we don’t need right now.
Check it out. Save the picture.
Ananova – Madonna snogs Spears and Aguilera:
Madonna has stunned the audience at the 20th MTV Video Music Awards by giving open-mouthed kisses on stage to Britney Spears and Christina Aguilera.
Heh.
Ownership Statistics Why a Shared Capitalism is Needed…
Current trends in economic inequality, both domestically and abroad, pose dangers to human dignity, democracy, political stability, fiscal sustainability, social justice, freedom, civil society, physical/mental health and environmental sustainability. These dangers are palpable, real and on the rise.
This page from the Shared Capitalism Institute (i.e., Communism in Rushspeak) lists a number of statistics about wealth in this country and the world.
Here’s an interesting one:
Government debt securities are owned dominantly by upper-crust households. The latest figures show that tax-exempt interest was reported on 4.9 million personal tax returns for 1997, about 4 percent of all taxpayers. Total tax-exempt interest income was $48.5 billion in 1997. [Note 14]
So if that trend were to hold true today, that would mean that the the Bush Administration “borrowed” money from the wealthy to give tax cuts to the wealthy… which ultimately pays off in the form of $2000 checks for Bush-Cheney ’04. Unbelievable.