The income tax system in this country is another broken function of government. It is so far off from what makes sense.. and it is continually getting worse as money wants more money. Talk to most average folks that you know, and they say they just want the government to leave them alone and and stop taking their tax money and wasting it... (lots of wars... lots of waste).
They really don't make mention of just how unfair the current system has become. When the huge majority of the wealth being generated today is going almost entirely to the very rich and to corporations.. how can it be justified to increase taxes on any other group. And how is it at all sensible most of the very wealthy and a sizable portion of corporations now can avoid paying taxes entirely... and if they do, they pay at rates far lower than the average individual.
For the approximately 1.4 million people who make up the top 1% of taxpayers, the effective federal income tax rate dropped from 29% to 23% in 2008...(it may seem too unreal to be true, but the top 400 ended up paying a lower rate than the next 1.4 million people). Speculators in the financial markets now can individually earn billions of dollars, and at most pay taxes at the capital gains rate of 15%... if they pay anything at all.
Between 1948 and 1979, the richest 10% of families in the U.S. claimed 33% of average income growth.... between 2000 and 2007, the richest 10% claimed the full 100% of average income growth in the U.S.
The very rich have reaped the vast majority of every economic expansion over the last 30 years, including the top 1% gaining two thirds of it in recent years. The top 0.1% have seen a 94% income growth since 2002. The richest of them all (the top 400) have seen an astounding 476% increase since 1992. The richest 74 people made as much as the 19 million lowest-paid people in America.
As for corporations picking up their share.. nearly two-thirds of U.S. corporations currently do not pay any income taxes... (many are America’s most profitable companies -Exxon-Mobil, General Electric, Bank of America & Citigroup, all paid $0 in federal income taxes... some adding insult to injury have income credits in addition!!).
Business taxes in the U.S. were cut from 46 to 34% 25 years ago... but today almost 25% of the big 500 companies listed on Standard and Poor’s paid federal and other taxes of less than 20% over the last 5 years. Tax loopholes and lobbying have lowered the top tax rate to its lowest point since the Truman era, and now corporate tax dollars only account for 5-7% of all federal tax receipts.
The change in corporate taxes — not merely rates, but what they actually paid — over the past half century is astounding...
- Corporate Taxes as a Percentage of Federal Revenue
1955 . . . 27.3%
2010 . . . 8.9%
- Corporate Taxes as a Percentage of GDP
1955 . . . 4.3%
2010 . . . 1.3%
- Individual Income/Payrolls as a Percentage of Federal Revenue
1955 . . . 58.0%
2010 . . . 81.5%
The power of money has never been as great and selfish and shameless as it is now. Corporations now paying for campaigns of elected officials, and who own the mainstream media, are allowed to avoid paying their fair tax share. Also through their Citizens United decision, the Supreme Court has opened the door allowing corporations, now designated 'as people' to spend millions lobbying political leaders to continue avoiding their tax obligations (this was/is a HUGE deal... 'a game changer'). As well intensified lobbying for more and more tax breaks like the 'tax holidays as the Chuck Collins article details... read it and get pissed.. ...you've every right to be!!
Corporations are now lobbying HARD for another tax holiday (spending tens of millions, employing dozens of lobbyists)..
to bring an additional 1.5 trillion dollars back into the country... at ridiculous low rates similar (or less) than what
GW permitted them to do back in 2004...
to bring an additional 1.5 trillion dollars back into the country... at ridiculous low rates similar (or less) than what
GW permitted them to do back in 2004...
..subsequently corporations laid off hundreds of thousands of workers the next couple years in 2005-2006...
... most all that 'holiday' money went towards executive compensation and share buyback.
At the end of the Second World War, every $1.00 Washington raised in taxes on individuals, it raised $1.50 in taxes on business profits. Today, that ratio is dramatically different:.. every $1.00 Washington gets in taxes on individuals, it takes only $0.25 cents in taxes on business.
In short, the last half-century has seen a massive shift of the burden of federal taxation off business and onto individuals.
The system must be brought back to one that is fair... we had a progressive tax system that although not perfect did work fairly well for decades. Top marginal tax rates have traditionally been very high in the US, averaging 61% since 1917. The average top tax rate was at one time over 81%. Today it stands at 35%, which is 27% below the historical average, and 59% below it’s highest rate.
There are numerous progressive tax proposals for taxing the wealthy... this is but one of many that have been put forth..
A progressive tax code to create new brackets for the wealthy and ultra wealthy. Restore tax rates to 35% for those with an income between $250,000-$1 million per year.
Add new brackets that increases the level to 45% for anyone with an annual income between $1 million to $10 million, 50% for $10-50 million, 60% for $50-100 million, 70% for $100 million to $1 billion, and 80% for anyone over $1,000,000,000 per year...(that's 20 million a WEEK!!!)
Tax Rate - Income Bracket
35% $250,000-$1 million
45% $1 million-$10 million
50% $10 million-50 million
60% $50 million-100 million
70% $100 million-1 billion
80% $1 billion and above
The U.S. has seen diminishing progressivity of its tax structure for decades... and the present system only fosters discontent, class separation and alienation... we are in for some serious long term trouble if it does not get fixed soon.
Studies comparing nations found that flattening the tax risks flattening social well-being as well. The more progressive the tax policy is, the happier citizens are. Researchers analyzed the relationship between tax progressivity and personal well-being in nations surveyed by the Gallup Organization in 2007.
On average, residents of the nations with the most progressive taxation evaluated their own lives as closer to “the best possible.” They also reported having more satisfying experiences and fewer discomfiting ones than respondents living in nations with less progressive taxes.
If the goal of societies is to make citizens happier and better off, it must be realized equitable and consistently enforced tax policy truly does matter. Certain policies, like tax progressivity, seem to be more conducive to the well being of the people. It is time we went backwards on this issue.
