THE MODERN UTOPIAN


WAR = DEFICIT

"If the US would just cut its military spending down to size, instead of spending as much as the rest of the world combined on war or preparing
for war--say by 75%--it would free up more than $450 billion a year that could go towards funding things like improved education, research into alternative energy, improving health care access, and paying down the deficit, too.   Toss in cuts in the outsized $40+ billion annual secret intelligence budget, in the nation’s obsolete and dangerous nuclear weapons program and other ancillary military-related expenditures, and we’re talking about saving half a trillion dollars a year."
                              from David Lindorff's article on "It's the War, Stupid"

TAX FAIRNESS 

 

   FIRST STEP:   Return the tax rate on person's making over 200K per year to the Clinton era levels.  (Already supported by the overwhelming majority of Americans.)  

Return the capital gains rate to 25% (recently reduced to 15%) 

Eliminate loopholes that benefit corporations and high income earners.  (For example, set a maximum on home mortgage tax deductions.)

Replace subsidies to oil, gas and coal compaines with subsidies to clean energy development, like sun and wind. (If necessary to do this on a gradual time line, then just do it.)

SPENDING VERSUS TAXES
Spending cuts are a "red herring". The Democrats have gotten sucked into the "reduce the deficit" argument by the Republicans. (Mostly because they too do not want to alienate their corporate and wealthy supporters.) If the corporations, Wall Street, and the wealthy were paying their "fair share", we would only need one other cut: military spending. (SEE EVIDENCE BELOW.)

Federal spending priorities must change. We have to stop pouring more money into the Pentagon and wars that only enrich the wealthy. The Deficit Commission came up with $100 billion in Pentagon cuts. Look carefully and you can come up with MANY, MANY billion more! We know that ending wars, closing military bases around the world, and eliminating nuclear weapons is the best way to deal with the deficit. (Do we really need 194 US military bases in Germany and 108 in Japan?)


    "Obama should veto any budget that does not increase taxes on the wealthy. pie chart

But missing from the entire budget discussion is the existence of

absurdly bloated military spending.

Military spending takes over halve of duscretionary spending and is protected by the silence of both parties and the media. Military spending hurts the economy, rather than boosting  it. Military spending makes us less safe, destroys the environment, erodes civil liberties, concentrates presidential power, blocks progressive initiatives, and kills large numbers of people. And polls show the majority of Americans want military spending cut. 

 
STATE CORPORATE TAXES
    “At the state level, a study of 265 large companies revealed that an average of 3% was paid in state taxes,
less than half the average state tax rate of 6.2%.

The 265 companies avoided a total of $42.7 billion in state corporate income taxes over the three years.

How do corporations respond? They pout, and complain about the corporate tax rate in the U.S., even though the percentage actually paid is very low relative to other OECD countries.”              - Paul Buchheit, Op-Ed.

 

CUTTING TAXES?

"A beneficial cycle (for taxes): We invest in infrastructure and public structures that create the conditions for enterprise to form and prosper. We prepare the ground for business to thrive.  When enterprise prospers we share the bounty, with good wages and benefits for the people who work in the businesses and taxes that provide for the general welfare and for reinvestment in the infrastructure and public structures that keep the system going.

"Since the Reagan Revolution with its tax cuts for the rich, its anti-government policies, and its deregulation of the big corporations our democracy is increasingly defunded (and that was the plan), infrastructure is crumbling, our schools are falling behind, factories and supply chains are being dismantled, those still at work are working longer hours for fewer benefits and falling wages, our pensions are gone, wealth and income are increasing concentrating at the very top, our country is declining.

". . . We must recognize and understand these tax cuts for what they are. They are a broken contract. These  tax cuts for the wealthy are theft. ...

We must recognize the Reagan Revolution for what it has cost us. Our democracy has been corrupted and our political system has been captured. A wealthy few are taking all of the benefits of our efforts for themselves. The lack of investment in infrastructure, courts, schools and other public structures is making our country less competitive in the world. The Reagan Revolution is stealing our future.   

                            -  from Tax Cuts Are Theft              

House Republicans passed a budget that cuts rates for the wealthy, which were 90% for decades and then 70% before tax-cut fever brought us the huge deficit.  And also cuts corporate taxes - 90% of corporate stock is owned by the top 10% - to 25%. They say more tax cuts will "promote growth and job creation."   

But all we have to do is look at the record to know what  has happened.      

WHAT PERCENT DO THE RICH REALLY PAY?

Most people have no idea (because they file a 1099 from   an employer) what kind of deductions others can take.

People need to see and understand the first 2 pages of a

tax return to understand what a person earns and what

s/he pays taxes on.

A person can make a million dollars but only pay taxes on the NET INCOME. Maybe as much as half or even less.

Romney, for example, could have GROSSED 40 million but paid taxes on 21 million @ 13.9% - think about what  % was paid on the GROSS income. (You know a private jet

and all its expenses can be tax deductible, don't you?

Betcha every one of Romney's multi-million dollar homes had tax deductible expenses.)   

In terms of types of financial wealth, the top one percent   of households have 38.3% of all privately held stock, 60.6% of financial securities, and 62.4% of business equity. The top 10% have 80% to 90% of stocks, bonds, trust funds, and business equity, and over 75% of non-home real estate. Since financial wealth is what counts as far as the control of income-producing assets, we can say that just 10% of the people own the United States of America.

WHAT IS TOO MUCH?

Conservatives say "If you don't give the rich more money, they will lose their incentive to invest."

As for the poor, they tell us, "They(the poor) have lost all incentive, because we've given them too much money."

- George Carlin - George, where are you now that we need you more than ever.    

                                                

TAXES ARE NOT A PROBLEM.                                  HOW THE TAXES ARE SPENT IS THE PROBLEM.

New data released by the IRS reveals that, over a period   of 12 years, tax rates for the richest 400 Americans were effectively cut in half.   In 1995, the richest 400 Americans paid, on average, 29.93% of their income in federal taxes. In 2007, the last year for which the IRS has released data, the richest 400 Americans paid just 16.63%....                   If the richest 400 Americans simply paid the same effective rate in 2007 as they did in 1995, the government would have collected over $3 billion in additional revenue.

 

The National Priorities Project (nationalpriorities.org).

This group makes clear how federal tax money is spent. 
Please check them out!
      Although I understand why we got it,  the "payroll tax holiday" is a poor solution to our unemployment problem.
Reducing social security tax income and, as a result, using other taxes to pay for social security is no solution.
Infusing money into the system by giving workers 2% more dollars to spent does not provide enough additional jobs.
Instead of a tax holiday, the money would have been better spent providing jobs - needed federal & state projects

for infrastructure, education, alternative energy, etc.

(as well as job training where and when necessary).

Here is what I understood in a message from NPP:

"... the U.S. Treasury still owes the Social Security trust

fund around $2.6 trillion-- a huge amount of money.

It's  not clear how exactly that will be paid back. My understanding is that the $100 billion of general funds   used to pay for Social Security in 2011 did not count  against the total amount owed to Social Security (i.e. it did not reduce the total amount still owed to Social Security by the Treasury)."

We must be clear that Social Security income and expenses are totally separate and should not be included as part of the income tax percentages cited in graphs. This should

also be true of Medicare funding, even though it has not been adequately self- funded. (When separated, we learn that the overwhelming use of our tax dollars support the "military-industrial" complex, most of which is totally unnecessary for "national defense.)

Time to reorganize the Pentagon and eliminate most large private military contractors. Take social security and medicare income and expenses out of the federal budget equation. Let's make sure the Pentagon/military/non-veteran related budget is under 20% of the balance.

 

A PROGRESSIVE INCOME TAX?
A half-century ago, in 1962, Americans making over what today would be $1 million, after taking inflation into account,
paid 42.8 % of their total incomes in federal income tax.
Ten years earlier, they paid even more. In 1952, millionaires — in today’s dollars — paid federal income tax at a 55.2% rate, show IRS historical data. And those ric
h in 1952 were actually getting a good deal, compared to their counterparts ten years earlier.
In 1942, the first full year of World War II, taxpayers who would be millionaires in today's dollars paid their federal income taxes at an overall effective rate that hit 68.9%. - from Sam Pizzigati in Ourfuture.org (1/30/12)
Can it get any more clear than this? The Republican Party in particular, and all of Congress (Republican and Democrat) in general, have lowered the tax rate for the rich increasingly over the past 60 years. We know why, of course. The rich have the power to do what they want in this "land of the free", the USA.

 

FAIR TAXES
What are "fair" taxes? Start by eliminating loopholes to the wealthy and corporations.
Eliminate the capital gains tax and eliminate the tax limit (cap) on social security.
Learn from history: The income tax was supposed to be progressive, but that has been widdled away to where it is today:
 
THE INCOME TAX SYSTEM
It started with FDR, but did not end with him.

When Eisenhower was President, the income tax rate was PROGRESSIVE (as was intended) up to 90%

without all the loopholes that exist today making the effective rate today much, much lower than the top of   37% (?).
Look at the changes that have taken place as the income tax has been reduced.
Even under Nixon the rate was still around 55%.
Not long ago, the long term capital gains rate was 25%. Now the rate is 15% and people like Romney, for example,
pay an estimated tax on all their income, after loophole deductions, less than 15%.
The propaganda is that Corporations have a high tax rate (35%) but few if any of them pay any where near that percentage and some pay nothing, or even get a rebate.
 
THE SOLUTION: TAXES, TAXES & MORE TAXES

Here is a perspective no one wants to hear. (Even me?) What we need is more taxes, not less. 

(Now, when I say this, I expect EVERYONE will pay their  fair share and that the income tax system, for one, will be VERY progressive.)

    1)    Let's start with the federal income tax:

First, the tax rate should be progressive like in the days of the Eisenhower Administration (from 0% at the poverty  level up to 90%). ALL loopholes eliminated - period. A few necessary TAX CREDITS for homeowners who pay mortgages (a percentage of the interest paid) and for SMALL businesses - the emphasis is Small, under 50 employees - a percentage of employee benefit contributions and also on the cost of hiring and training new employees. 
In effect, we would have a Progressive Flat Tax with a very limited number of tax credits for their incentive value only.

    2)    Gasoline tax should be at least double. Get a life: don't you know other countries around the world pay double or triple for gasoline? They still drive. (Okay, smaller cars. If we want to pay less for gas, buy smaller cars or hybrids or electric ones.)

    3)    Higher Medicare and Social Security taxes. (No cap as there is today.) These are two ESSENTIAL programs that benefit everyone.  

Of course there is a lot we can do to reduce medical expenses, especially if we had Medicare for All. Elimination of fraud, limiting excessive compensation to doctors and hospitals, a more careful analysis of payment schedules,  etc.

Note: What in the world is wrong with our politicians? Complaining that Social Security and Medicare are in financial trouble and then reducing the payroll tax that supports them! (I know the idea: puts money to spend  back in the worker's pockets. Not the solution to the Jobs crisis. Getting more people employed, not giving tax breaks, is the solution.)

    4)    Although the sales tax is basically regressive, there is some justification for a federal sales tax, IF it is pinpointed to clearly defined programs like Medicare and Social Security. I love to tell the story of when I was at a gift shop in Canada and the sales tax was 15%.   I said, "Why so high?"   The clerk responded  "It pays for our Universal  Health Care."   I gladly paid the 15%.  Wouldn't you?

    5)    What ever happened to the LUXURY TAX? Yachts, diamond rings, fur coats (do they really still exist?), etc.

    6)    Ah, and the ESTATE TAX. The multi-million dollar heirs could pay a tax on money they never earned, no?

    7)    Ever heard of a Speculation Tax? Or a tiny Tax on Stock and Bond Transactions?   Wall Street and investors could afford a penny on a dollar invested to help their country, rather than just taking advantage of a smaller capital gains tax.

    8)    All corporations doing business in the USA must pay income taxes on all profits made in the USA.  No more loopholes, including having off-shore locations to avoid taxes. 

This is only 8 - there are more.

(Some are repeated and others are added below.)

 

A GRADUATED FLAT TAX.              

Not a flat tax that is the same for everyone, but a tax that  is progressive, like the current income tax system.  This system, however, would have NO loopholes.  A few Tax Credits could be used for incentives - with strict limits - on mortgage interest,  for SMALL businesses who hire new employees,  and scientific research & development studies in coordination wiith government funding.   All tax credits would have to be easily understood by the average citizen.

 

FIRST STEP:   REFORM THE TAX SYSTEM

Everyone knows by now we need to make our federal tax system fairer and much simpler. 

The Center for American Progress has a realistic tax reform proposal.  Sen. Ron Wyden (Oregon) has introduced legislation that deals with this proposal. 

This proposal include:   Closing 30 billion dollars of tax loopholes,  ending corporate offshore tax shelters and deferred taxes, eliminating payroll taxes for working people, not taxing low income people, eliminating deductions for companies who ship jobs overseas and pay exorbitant salaries to their executives...

 

We need 6 brackets: 10%, 20%, 30%, 40%, 50% & 60%. Even 60% is too low for those with salaries of 1 million or more per year.     Those salaries are unbelievable when the minimum wage is $7.25 per hour.   (The minimum wage MUST be tied to the COL Index,  and anyone earning under the poverty level should  pay no taxes whatsoever.)

       Today, thousands of Americans who earn hundreds      of thousands of dollars, even millions, pay no tax at all.      This needs to stop.  Those earning low wages (under the poverty level) should pay no taxes - not the other way around.

 

The ESTATE TAX only imposes a tax on estates over        3 million dollars  (1% of the wealthiest Americans.)   The estate tax should be revised to tax inheritants who receive over 1 million dollars each.  

The ultra rich can afford to pay a tax on money they pass on to their rich heirs.  That tax will help pay for some of our national debt, ensuring a better life for ALL in future generations.

 

TAX RELIGIOUS INSTITUTIONS

The constitution is and was intended to be a secular document with separation of church and state.             So ...  why in heaven or hell would churches have tax-exempt status?   Not to mention they can influence their parishioners politically!   See the film or read the book:
"What's the Matter with Kansas?" by Thomas Frank. Demonstrates what happened there: From being populist (progressive) in the early 20th century to right-wing Tea Partiers today, thanks to the fundamentalist Christian preachers who told them how to vote.
 

 

On Campaign for America's Future, Daniel Marans proposed 5 taxes. (Modest ptoposals from my point of view.)  Here they are in summary:     1) Eliminate the cap on Social Security payroll tax.

(I also have mentioned this elsewhere.)

2) Add a tiny tax (.25%) on every purchase and sale of stock and a .02%     tax on every purchase and sale of a future, option,or credit default swap.

3) Corporate income tax rate increased by only 1%. (Of course, evenn more important is to eliminate the vast number of loopholes.)

4) Large financial institutions with assets of 50 billion or more can pay a tiny 0.15% tax.

5)  Tax "carried interest" as income. That' a loophole hedge funds use to

educe thei tax rate.

These 5 taxes alone would eliminate any social security funding problems and add 1.2 trillion dollar in revenue!

 

A TAX BONANZA
    Make people happy with this tax. States have their lotteries to support education. How about a federal lottery to reduce the deficit?  
    Here is a good example:   Charge $5.00 a ticket. Use $2.00 as pay out; $1.00 as administrative costs (including commission to retailers); and  $2.00 to reduce   the federal debt. Start as once a month and increase more often as demands and ability to administer dictates. 
    Pay out is based on income, but with a maximum of 1 million tax-free dollars  per winner. (This way there can be several winners with each drawing.)
    I would love this to be tied to education. Here is how. On each ticket purchased there is a true or false question.   For example. "George Washington was the first President of the USA. True or false."  Ticket purchasers who mark the incorrect answer are eliminated, if their name is drawn.  Name it the "USA Freedom Education Lottery".  Perhaps this way Americans can learn a little about the history of their country!
    
A WALL STREET TAX
    One very important tax:  Just a little one that will go unnoticed by everyone: Tax, maybe one half a cent, on every single Wall Street transaction.  When we (you or me or anyone) buy and sell a stock or  bond, charge us a penny tax (more would be better).
    Do you have any idea the huge amount of government revenue that would generate? 

 

Here are three more taxes you can only dream about:

        1)    LEGALIZE, CONTROL & TAX ALL DRUGS.                        We already do it with cigarettes and alcohol.  Initially, these drugs will require more oversight.  Still,  why should all those violent Mexican Cartels get all the money?  Can't we share a bit and eliminate most of the violence in the process? 
        Think of all the other money we will save by ending another unjust and ineffective "War" (on Drugs).   Plus, we save multi-millions on prisons and we'll   get the cops to catch real criminals.
        Statistic anyone?  No longer 830,000 arrests on marijuana possession each year and no longer hundreds of thousands of people       in jail for illegal possession. 
        2)    LEGALIZE, CONTROL & TAX PROSTITUTION.   (Already legal in Nevada, you know.)   Help the police to go after traffickers in underage girls instead of johns and the prostitutes that serve them. 
        3)    TAX THE CHURCHES.  Follow the true meaning of separation of church and state. Churches can pay taxes just like anyone else. If you don't believe in the separation of church and state, at least believe the churches should pay taxes on the profits they make through non-church business activities.
 
PS:   There are careful and incremental ways to do all of this. 
But, don't worry,  it ain't gonna happen.
 
Disclaimer:  I have a graduate degree in theology and was a preacher in    a church.  The only drug I care to use is alcohol (in limited amounts),  
and I have never been with a prostitute and don't ever plan to be...durn it.