As my income has grown, the taxes I pay (especially income and property) have grown due to making more money and moving into higher tax brackets. I feel fortunate that I’ve been able to earn more, and don’t find higher tax brackets I’ve entered to be punitive.
Interestingly, if someone were born into an extremely wealthy family, went to the best schools in the country (without ever filling out a financial aid form), and developed an incredible network of connections along the way, the tax policies Michele Bachmann supports would allow that potentially highly productive citizen of the United States to sit on their butt and live off long term capital gains of the money they inherited with no estate taxes.
Personally, I think we’re a better country if everyone contributes to the best of their ability. That means no lazy rich. And it means enabling the less fortunate so they can create better lives for themselves. For example, I think kids are capable of learning more in school if they’re not going to school hungry.
Do Taxes Promote Growth?
It’s common to hear corporate Republicans suggest that taxes don’t promote growth, but it seems likely that many of those same people would be willing to concede that educated people are more capable of helping our state and country compete, while earning higher incomes than those who are uneducated. Using the Minnesota Democrats Exposed bloggers as examples, taxes pay for Ryan Lyk’s education (and paid for Andy Post’s). Does that make Ryan and Andy welfare queens? It seems likely to me that they’ll end up earning more money over their lifetimes, and pay more in taxes, due to the educations they’re earning or have earned. It sure seems like a case could be made that taxes promoted growth in Ryan and Andy’s cases.
George Soros
George Soros, and his political strategies are another popular topic for the right to attack. It’s not surprising to see FOX programming devote so much air time to trashing opposing viewpoints. Soros like the kind of guy who thinks government (the people of a country) should step in to make up for the shortcomings of free markets. That’s crazy talk to FOX supporters (and, not surprisingly, people who get their news from FOX).
George Soros has explained that there are limits to what free markets can achieve, so many people will be better off under a system where the government makes up for the shortcomings. Free markets don’t provide education for all or health care for all. We now have a system where the free market provides education for many and health care for many. They’re not perfect systems, but more are better educated and healthier under these imperfect systems than we had under the more imperfect systems we had before.
Soros could contribute his money to organizations that can help the poorest among us, provide for more open governments, and saner drug policies. However, he has also chosen to leverage his wealth to make an even greater positive impact on the poor and powerless by influencing public policies and political campaigns. Soros explained this in a 1997 piece in Atlantic Monthly:
When I had made more money than I needed, I decided to set up a foundation. I reflected on what it was I really cared about. Having lived through both Nazi persecution and Communist oppression, I came to the conclusion that what was paramount for me was an open society. So I called the foundation the Open Society Fund, and I defined its objectives as opening up closed societies, making open societies more viable, and promoting a critical mode of thinking.
It’s no different than what the Koch brothers, Richard Mellon Scaife, and other right-wing billionaires do, with one exception: he’s supporting policies and politicians that help the poor and powerless while the Kochs and Scaife support policies and politicians that support the Kochs and Scaife.
Inheritance Taxes
As I see it, taxing the inheritances of the very very rich is among the greediest and most disgusting tax policies Republicans oppose. You’re either greedy from the grave, or a greedy next of kin who thinks they’ve got it bad if a portion of the money they’ve inherited from their extremely wealthy parents is taxed before being handed over.
A tax policy that rewards greed and laziness does not belong on the platform of any major political party.
This post was written byEd Kohler and originally published onThe Deets. Follow Ed on Twitter:@edkohler
Is this about Mark Dayton?
Indeed, if we do not stop borrowing massive amounts of money from other nations in order to enable the richest of the rich within our own borders to continue to be greedy and lazy (i.e. to protect them from paying taxes), we (and our greedy, lazy, rich friends) are likely to discover that we no longer own our own country, but have given our creditors the power to call a lot of shots (including how much taxes our own wealthy classes pay) within our own borders under the threat of dumping enough of their massive quantity of US “T” bills on the market to take the value of the dollar down in very damaging ways.
Although that might lower the value of their own investments in those “T” bills, they have proven before that they’re willing to stand a certain level of pain in order to enact revenge for what they regard as sufficient cause (such as our attempting to stand in the way of their increasingly belligerent attitude toward their immediate neighbors and toward Taiwan).
Back in the 1940s, if we had borrowed as much money from Germany as we have now borrowed from China, we would likely never have dared enter WWII, but could only have stood by and watched as Hitler took over all of Europe and probably a good chunk of Western Russia as well.
@Steve, good example. Dayton seems to have done just fine without Michele Bachmann’s preferred estate tax policies in place.
According to the IRS, the top 5% of all income earners in 2008 paid 58.7% of the personal federal income tax collected. You might call that lazy, or you might call it downright unfair.
Ed:
I don’t pretend to know when and how Dayton’s wealth was passed to him, only that he did not earn it. Wealth transfer tax laws have changed over the course of the 20th century, and loops holes opened and closed.
Dayton is a good example of a person you would describe as “lazy rich”, who was not prevented from being such by wealth transfer laws.
steve, The top 1% earn something like 21% of all income, and pay something like 33% of all income taxes. So, yeah, you make a disproportionate share of the income, you’ll pay a disproportionate share of the tax.
David:
Actually, the top 1% pay 38% (2008); in 2007, they paid 40% (Source: IRS). Meanwhile, the bottom 50% pay 2.7%.
Clearly, the wealthy aren’t paying their fair share; they must pay wealth transfer taxes too.
In 2009, 47% of Americans paid no income tax. Because some tax credits are refundable, some families got a return without paying any taxes.
That is 47% of Americans that are completely disconnected from the cost of government. Government is something that is financed by somebody else for nearly half of Americans.
Just imagine what they could accomplish if they all got together to vote.
“That is 47% of Americans that are completely disconnected from the cost of government.”
Not true. They still pay payroll taxes, they still pay various excise taxes such as gas taxes. They also pay income, sales, property and other excise taxes to state and local governments. In Minnesota, that results in the wealthiest paying a lower total tax incidence than those earning less.
And Steve, nothing you said changes the fact that when you earn a disproportionate share of total income, you’re going to pay a disproportionate share of total taxes.
David:
How much state income tax do they pay, when it is calculated from a federal tax of $0?
Please explain this claim: “In Minnesota, that results in the wealthiest paying a lower total tax incidence than those earning less.”
We all understand that the wealthy pay a disproportionate share of the total taxes. This discussion is about whether or not they should be taxed more. If we taxed them at a 90% rate, it would still be disproportionate, and some would still claim that they are not paying their fair share.
Increasing a person’s taxes as his income increases would happen even with a flat tax system. Ten percent of $50,000 is more than 10% of $40,000. But to also increase the tax RATE with higher earnings is a marxist principle and unfair in a free society.
There is no other transaction or cost in this society where the charge varies depending upon your income and very idea is the antithesis of equal protection under the law.
Also, if Ed is concerned about the “lazy rich,” he should focus on a wealth tax, since most rich people don’t even earn a salary. If people like Soros, or Buffet or Gates or Oprah had to pay an annual 25% surtax on their net worth, they probably wouldn’t be so outspoken about the need to raise income taxes on wage-earners like me.
Say you go out to dinner or on a golf weekend with a college buddy. He is clearly more financially successful than you, and makes twice your annual earnings.
When the tab comes, what is your share? It seems like about a 20/80 split, assuming it is handled like income tax. It only works once though, as his calendar is booked for every date you propose for the next get-together.
Dennis, I think inheritance taxes are a decent way to tax wealth. Make a boatload while you’re alive, then either give it away or have it taxed heavily rather than passing it along to someone based on genetics.