Senator Lindsey Graham (R-SC) said, “It’s really American to avoid paying taxes, legally…It’s a game we play…I see nothing wrong with playing the game because we set it up to be a game.”
It’s not a game for Americans who need jobs and education and public transportation and infrastructure repair. But public services continue to be cut, while the wealthiest Americans benefit the most from a government they say they don’t want. TheyĀ need government, but they don’t want to pay for it.
Here are some reasons why the super-rich should be payingĀ a lot moreĀ in taxes.
1. $2 of Every $5 Owned Today was Created in the Last Five Years, and Went Mostly to the Richest 10%, Mostly Untaxed
And most of it was accumulated passively, and unproductively, by just waiting out the stock market. As America’s wealth increased fromĀ $47 trillionĀ to an incredibleĀ $80.66 trillionĀ in just five years, the richest 1% areĀ estimatedĀ to have added an average of $5 million each to their fortunes. They pay no wealth tax, they can defer their income taxes, and they pay a reduced capital gains tax when they decide to cash in.
2. A Beggar Saving for a Hamburger will Pay More Sales Tax than the Entire Financial Trading Industry
There isĀ no sales taxĀ on financial transactions, no matter how speculative, and despite the fact that total trading value is many times more than the world economy. Derivatives trading was aĀ major factorĀ in the economic crash that depleted middle-class homeowner wealth in 2008. The trading volume on theĀ Chicago Mercantile ExchangeĀ reached $1 quadrillion in notional value in 2012 (that’s a thousand trillion). Yet no sales tax is paid.
3. It’s Not Possible for a Financial Person to be Worth 100,000 Teachers or Firefighters
Defenders of excessive incomes use the “meritocracy” argument. But based on merit, some of the biggest moneymakers may be among the least worthy of us. ConsiderĀ hedge fund managersĀ who profit from shortages of homes and food, pay a smaller percentage in taxes than people making thousands of times less, and have the opportunity toĀ defer allĀ of their taxes. OrĀ super-wealthyĀ stock owners, like Mark Zuckerberg or Bill Gates or the Koch brothers, whoĀ takeĀ more from society than they give, yet can make up to $10 billion in one year, enough to pay the salaries of a quarter of a million medical technicians, andĀ all of whichcan be tax-deferred indefinitely.
4. Corporations Make Billions by Appropriating Public Research and Federal Assets
Google’s business is based on the Internet, whichĀ startedĀ as the Defense Department’s ARPANET; the National Science Foundation funded theĀ Digital Library InitiativeĀ research at Stanford University that was adopted as the Google model; and Google Maps came from the massiveĀ geographical databaseĀ of the U.S. Census Bureau.
Pfizer has thrived on government largesse, relying on basic research performed at theNational Institute of Health. The company is also starting toĀ profitĀ from theĀ Human Genome Project, which by oneĀ estimateĀ will generate economic activity of about $140 for every dollar spent.
Just as our public research has been misappropriated, so has our land. The recent episode withĀ freeloadingĀ Cliven Bundy highlighted the takeaway from the public, the sense of entitlement among the rich, and the disdain for a government that is supposed to protect the common good. Yet instead of defending the commons, our government leaders see it as a means of profit. Paul Ryan’sĀ Path to ProsperityĀ proposed to sell millions of acres of “unneeded federal land.” Representative Cliff Stearns evenĀ recommendedĀ that we “sell off some of our national parks.”
5. The Great Majority of Tax Breaks go to the Rich
Most of the annual $1.3 trillion in “tax expenditures” (tax subsidies from special deductions, exemptions, exclusions, credits, and loopholes)Ā goes to the top quintileĀ of taxpayers. OneestimateĀ of total tax expenditures is a nearly incomprehensible $900 billion a year.
For those who believe that the wealthiest Americans already pay most of the taxes, they couldn’t be more wrong. Lower-income earners pay aĀ much higher percentageĀ in combined state and local income, property, sales and excise taxes. When all taxes are considered, middle-income and upper-middle-income earners pay aboutĀ as much asĀ the richest 1%.
A Conservative-Inspired Summary:
Paul Ryanās great-grandfather started a construction firm,Ā still in operationĀ today, which in the 1950s received government contracts to help build the Interstate Highway System. Ryan attended a public high school and a public university. Part of his tuition was paid with Social Security survivor benefits. His mother, whom he refers to as his “role model,” rode public transportation every day to earn a degree at the University of Wisconsin, a public university.
We’re all dependent on the government services that we too easily take for granted. The wealthiest Americans receive the greatest benefits, but they insult the rest of us by treating their tax responsibility like a game.
Paul Buchheit is a college teacher, an active member of US Uncut Chicago, founder and developer of social justice and educational websites (UsAgainstGreed.org, PayUpNow.org, RappingHistory.org), and the editor and main author of “American Wars: Illusions and Realities” (Clarity Press). He can be reached at [email protected].
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1 Comment
A good article Mr. Buchheit . From the late 40’s until 1960 the Federal Rate of Corporations was 41% Today, it’s 15%. That percentage difference translated into Canadian shekels is trillions of dollars. Todays Corporate owned newspapers don’t(won’t?) tell you that because,”Free Markets are better that Kensyism”.(sigh) For more info on this read Linda McQuaigs 1987 book,”Behind Closed Doors – How The Rich Won Control of Canada’s Tax System..And Ended Up Richer” I’d like to see the return of equiatble taxation but Canada’s NDP have become “Capitalism Lite”. Good article Mr. Buchheit.
Max