My husband, Bob U., wrote a series of articles, which I think are really insightful. This is Part 15. I invite your comments.You can visit Bob at http://bobuhlar.gather.com/
In 2001, 80 percent of income tax payers earned less than $73,000. In the 2001 tax cut, they received on average a $350 tax cut. From 2001 to 2011, the yearly cut will generally remain below $500 for a total of less than $5,000.
From 2001 to 2011, the top one percent of income tax payers - approximately 130,000 American taxpayers earning more than $400,000 per year - will save an average of $45,000. In 2010, 52 percent of Bush's total tax cuts will go to this richest one percent. They will receive $121 billion of the $234 billion.[i]
In addition to the loss of revenues from individual income taxes, corporate tax revenues have also dropped. In the 1950s, corporate income taxes provided 33 percent of our federal revenues. By 2002, it was down to ten percent.
Some companies are avoiding taxes by moving their headquarters to other countries. Many have simply changed their official address to a post office box in a Caribbean country.
Republicans have justified these tax cuts by claiming that they stimulate the economy, which stimulates tax revenues. They often claim that government revenues doubled under the Reagan tax cuts between 1981 and 1988.
Actually, government revenues were $599 billion in 1981 and $909 billion in 1988. But you need to adjust these numbers for inflation. Adjusted to 1988 levels, government revenues in 1981 would have been $779 billion going up to $909 billion in 1988.[ii] So, revenues during those seven years went up 16 percent, not 100 percent.
Conservatives also don't tell you that many of the Reagan tax cuts were rescinded in 1982 and 1986, effectively raising taxes through both acts of Congress.[iii] They also doubled the FICA payroll tax so that Baby-Boomers would fund their own retirement. They also forget to mention that the Reagan administration hiked the national public debt from $0.9 billion to $2.6 billion during its eight-year reign.[iv]
But that still leaves us with some questions. What is a fair level of taxation? How much is it worth to you to live in the United States?
Tomorrow - Part 16: What is a Fair Tax Rate?
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[i] Peter Singer. The President of Good & Evil: The Ethics of George W. Bush; p. 19
[ii] Revenue figures from http://mediamatters.org. Inflation adjustment on http://minneapolisfed.org/Research/data/us/calc/index.cfm.
[iii] See http://en.wikipedia.org/wiki/Tax_Equity_and_Fiscal_Responsibility_Act_of_1982 and http://en.wikipedia.org/wiki/Tax_Reform_Act_of_1986.
[iv] See http://en.wikipedia.org/wiki/History_of_the_U.S._public_debt.
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Comments: 19
But how do you get rid of greed and corruption? Maybe we should start by putting those involved in all the current economic problems in jail. And we need to start at the top and "trickle down." Of course this is unrealistic as there are so many, so powerful, and so crooked, the courts would be jammed for years. But perhaps a few good "tokens" might help.
There is a reason people flock to the US and leave their good health plans behind. Freedom. I guess they value that more than good health plans.
Regarding our standard of living, Please paste these URLs into your browser and read the three articles:
1. http://www.alternet.org/story/106410/
2. http://www.alternet.org/story/106979/
3. http://www.alternet.org/workplace/119048/why_you_should_be_screaming_for_higher_taxes/
The taxes are already overwhelmingly placed on the upper classes. It gets old to constantly read your Utopian tax plans without a single concept of what such plans would do to economic activity. The higher the tax rates, the less activity among the higher taxed brackets. The same goes for revenue produced, initially it is on line with predictions but declines rapidly the payers either avoid activity that produces income or move any such activity to nations that tax less. If you would even bother to look at history, this is repeated again and again here and in other nations.
The booming 50s owed more the previous 20 years of war and Depression building up huge consumer demand than anything else Libramoon. With much of the world's industrial base in ruins or rebuilding, there was no competition for the US. As the world rebuilt, that advantage crumpled and the tax rates harmed us even further. Today, we have no such advantage of a world elsewhere in ruins. We also face many nations that are hungry for growth and who are undercutting us economically in many ways. Trying to compete on the world stage with the highest tax rates in the industrial world among other crippling factors is going to harm us even more in the long run.
Business goes where it can thrive. The US is becoming more and more like Europe, an over regulated but comfortable place for an aging population no longer eager to compete. US business is noticing that and that's why its moving. Punitive policies trying to prevent that will only increase the flight.
You wrote "The higher the tax rates, the less activity among the higher taxed brackets." If you had read these articles you would see why I disagree with you.
The rich do not spend less if they are taxed more. In fact, they are more likely to reinvest in companies to avoid higher income tax rates.
A Proposed Job Swap To Save American Capitalism
By Liz Lerman
Do Wall Street executives deserve big bonuses during hard times? Does increased arts funding have a place in an economic stimulus package? I’ll leave it to others to debate these controversies. Meanwhile I’d like to make a modest proposal to solve some of our economic problems: Let’s do a job swap. We’ll put the corporate executives to work as artists while the artists run Wall Street.
Since their first task will be getting economic markets back on solid footing, I’m convinced that artists have the perfect resumès for their new jobs. Here’s why:
[read the rest at the linked site]
Higher taxation is always a goal of government when it can't control it's own spending. That's why traditionally, under Dems and Repubs until the 20th century (notable exceptions being Coolidge, and to a certain extent Eisenhower and Clinton) government cut spending and taxes to give the economy breathing room and to free up capital for investment.