Posts Tagged ‘fiscal cliff’

First off, I want to state that I have nothing against the wealthy. In fact, I wish I could count myself amongst them. Unfortunately, I can’t, but that is besides the point. I want to lay out why I think those who CAN count themselves as being fortunate enough to be considered “wealthy” should pay a higher tax rate and I would also like to state as a non wealthy person, that I am willing to pay more in taxes as well – as long as Washington finally gets it through their collective idiocy that we NEED to cut spending.

Ever since the 1960’s when LBJ and Congress took it upon themselves to combine social security with the general funds, those who have been paying into it have been getting hosed. No corporation in the country would be allowed to pull such a thing on it’s employees with their retirement moneys, but our Congress and the president at the time decided they could get away with it. I mention this because part of the discussion going on now has to do with the Republicans demanding that “entitlements” be looked at in a comprehensive plan to balance the budget. What they apparently refuse to recognize, of course, is that Social Security (and medicaid) would  be solvent if they had simply left it alone and not included those funds in the general funds. Instead, “social security” has a bunch of worthless IOU’s that the government has no hope of ever being able to fulfill. This has absolutely nothing to do with why the wealthy SHOULD pay more in taxes (as should everyone else) but it is a sidebar to the overall discussion.

The reason(s) the wealthy should pay more in taxes is because for the past 30 years, they (and the Congress they own) have worked to increase their wealth by funneling more of the money of the nation upwards into their bank accounts, while simultaneously using Congress to make the rest of the population less wealthy. That is my basic argument and I will lay out the specifics as follows.

The “trickle down theory” The trickle down theory, as proposed by Ronald Reagan was a wonderful, Utopian idea. If we tax corporations and the wealthy LESS, then the money they save in taxes will “trickle down” into the economy and create jobs. Except, that’s not what happened. What really happened was people. People are greedy, merciless creatures and those who benefited from these tax breaks kept the money – plain and simple. And not only did many of them keep the money, they also moved it into offshore accounts where they could hide it and not be taxed on it in the future. This was really the first step in the war on the middle class. I don’t think Reagan intended for it to occur, but it did. The wealthy saved a ton of money on taxes and kept it for themselves. Unfortunately, even though this didn’t work as envisioned, the Republican party is still pushing this agenda of “trickle down” economics even though it has been shown for 30 years not to be a complete failure. Over the intervening years, the wealthy have simply increased their wealth while everyone else has simply gotten less wealthy.

NAFTA and other “free trade agreements”. There was a time, not that long ago, when manufacturing was BOOMING in America. In the late seventies, as a teenager, I was able to find a job virtually at will at any number of manufacturing facilities near where I lived. NAFTA changed all of that. This agreement (along with others to follow) allowed multinational corporations (and their ceo’s) to move good paying jobs with decent benefits (middle class jobs) to overseas markets where they could pay a pittance in wages and benefits and reap the benefits of higher profits. That is AWESOME  for the corporations and their CEO’s – not so good for American workers. As with the theory of trickle down economics, the money moved up the totem pole and the people lower on the totem pole simply felt more pressure from above.

The rest of us simply don’t have anything to give. I’m willing to allow Congress to increase my retirement age in order to help the government get the budget under control (see my thoughts on social security/medicare above), but why should the very people who benefited (by way of lower taxes) be able to continue to receive a lower tax rate while simultaneously asking me to work even longer (I’ve already got 35 years on the tax rolls and counting) than the 50+ years I am already stuck with? The wealthy can retire whenever they please. They don’t HAVE to work 50 or more years if they choose not to. I do. I don’t hold any grudges in that respect. Like I said, I wish I were wealthy too, but it didn’t work out that way. So please, be my guest, increase my social security back to 6.2% instead of the ridiculous 4.2% that it currently is because hey, we have to pay for our futures. 

Interest income – here is where it gets really sticky. There is an “income” tax rate which the wealthy already pay a fairly decent amount on but when it comes to realized income on investments, not so much. This is where Buffet had it right – we should charge more in taxes on investment income. Why? Because people who make money off of the stock market and other investments (and that DOES include me – though to a much lesser extent) are benefiting from the work of average people. IBM or APPLE or whomever only see an increase in profits because they have a decent product and because they require their people to continually improve on their performance. Essentially, their stocks make them money because the people who aren’t rich, work harder. Increased productivity is a wonderful thing but the people who are doing the actual work don’t benefit like the people who invest in their company’s. In fact, in real terms, their wealth is declining at the same time that those who benefit from their work are seeing record profits from that work. That, to me, seems like a fair reason to ask them to pay more in taxes on that income. Also, people are selling out of “dividend” stocks because their taxes on those dividends might go up? PLEASE! I hope my dividend stocks go up! In fact, I might buy some at bargain basement prices. I’ll be happy to pay the extra tax just because I made more money.

Finally, I want to say this. The wealthy should pay more in taxes because THEY created the system that allowed them to benefit so generously in this nation. They bought Congress. They bought the presidency. They got EXACTLY what they wanted by ensuring that people favorable to them got elected and NOW they got “citizens united” from the supreme court – a gift that will surely continue to keep on giving.

Many people will disagree with  me and I’m not saying that those less fortunate shouldn’t pay more in taxes, but I definitely am saying that the wealthy have to stop their complaining and pony up. They got wealthy BECAUSE of the system that they put in place and they should damn well be willing to pay more so they can keep the gravy train rolling.

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