During the George W. Bush years, 65% of all income gains went to the top 1%. During the Obama years so far, 93% of all income gains have gone to the 1%. Income tax rates have not been lower on the super wealthy than they were during the Eisenhower administration. The wealthy SHOULD be paying the majority of Income taxes. But there are many, many other taxes that are paid by folks other than the Super wealthy.
Let’s take the example of Social Security withholding [FICA]. A person who earns $10 Billion a year pays not a dollar more in Social Security withholding than does a taxpayer who earns $106,000 annually. That’s because of the SS income cap. That is a tremendously regressive tax that allows the wealthy to escape a huge amount of taxation. The monies taken for Social Security withholding have not been set aside to pay future benefits. Instead, they have been used for decades, starting with Reagan to pay for the expenses of the country at large.
In a time when Conservatives are crowing that we need to decrease Social Security withholding, it’s curious that they did not complain when those making less than $106,000 were paying Social Security that was diverted to pay for the regular budget expenses of the United States, thereby freeing the wealthy from paying for it. Thus, you are pushing a myth that the wealthy are overtaxed. They have not paid so little in income taxes since the 1950s and most of the US budget is actually paid for by the non-rich through Social Security withholding. All of this ignores the fact that most wealthy have engineered their income to come in the form of Capital Gains which is taxed at 15%.
So, considering these factors:
- 93% of income gains have gone to the 1%
- Rate of taxation has never been lower on the rich since 1950
- The US budget is paid for by the non-rich through Social Security withholdings diverted to pay general budget expenses
- Most wealthy don’t actually pay 36% in income taxes but 15% as capital gains
The comments Conservatives make about the debt ignore the fact that 93% of all income gains during the Obama years have gone to the 1% and that the wealthy gain huge advantages by being US citizens and having other Americans pay for roads, utilities, police, fire, military, the CDC and other organizations that the wealthy benefit from while not paying for them.
Because of rampant tax evasion and the use of tax shelters in secrecy jurisdictions such as the Caymans, the Bahamas, Bermuda, the BVI and the Channel Islands, and the abuse of Transfer Pricing to move income to offshore entities, most US corporations do not actually pay high taxes. The richest “American” companies have already moved their IP offshore so they can abuse Transfer Pricing to shift their tax burden entirely away. So, again, it’s a complete myth that US companies pay a large amount in taxes. They don’t! If fewer Americans are employed it is a side effect of this transfer pricing and the effect of globalization.
Conservatives hang their arguments on myths that are actually not true. Wealthy Americans DO NOT pay high taxes–they evade them. American corporations DO NOT pay high taxes–they evade them. Finally, as is customary, Conservatives often fall back on claiming “envy” whenever anyone points out the flaw in their arguments and the myths they push. They make false assumptions when they assume envy. They apparently cannot imagine that some high income Americans are blind to what is happening, and the unpatriotic behavior that is being practiced by HNW and UHNW Americans who evade their taxes and by “American” corporations who use Transfer Pricing and Secrecy Jurisdictions to evade their actual taxes.
The comments of Conservatives are offensive because they are based on their beliefs that the rest of us are unaware of what is actually going on. That is a false assumption and with the passage of the FATCA law which goes into effect in June of 2014, it is time to pay the piper. Across the globe, the net is closing on tax evasion. The only choice for tax evaders is to take their chances in 3rd World “havens” and the criminals who are waiting to pounce on them there. When that happens, Conservatives, you’re on your own.
Edited/Published by: SB
