Should The Wealthy Pay More Taxes?

Submitted by Lawrence Rafferty, (rafflaw), Guest Blogger

I know what you might be thinking after reading that title, “Duh”!  However, a few days ago, I read an article by former Labor Secretary Robert Reich, which proposed that the Wealthy must contribute more revenue to the government through the form of higher taxes.  When I first read it, I nodded my head in agreement and moved on to another article.  In light of my guest blog last week titled, The Tea Party Versus the Middle Class, and in light of the “deal” that was reached last night to keep the government from shutting down, I think it is imperative to review Mr. Reich’s words.

“Here’s the truth: The only way America can reduce the long-term budget deficit, maintain vital services, protect Social Security and Medicare, invest more in education and infrastructure, and not raise taxes on the working middle class is by raising taxes on the super rich.  Even if we got rid of corporate welfare subsidies for big oil, big agriculture, and big Pharma – even if we cut back on our bloated defense budget – it wouldn’t be nearly enough.”  Robert Reich When you read Nal’s excellent guest blog earlier today about the Paul Ryan Path to Prosperity, it seems obvious that the purpose of the Republican budget proposal is to grant more giveaways to the wealthy and to sock it to the Middle Class by raising taxes through Tax Bracket consolidation as Nal reported.  Path To Prosperity The case has been made by that article that the Budget proposal is a hoax and will be a drain on the economy, therefore, isn’t it time for the Progressives to insist that Congress raise more revenue in the form of increasing taxes on the wealthy?

In the aforementioned and linked article, Sec. Reich lays out his reasons why the Wealthy need to and can afford to be taxed more.  “The top 1 percent’s share of national income has doubled over the past three decades (from 10 percent in 1981 to well over 20 percent now). The richest one-tenth of 1 percent’s share has tripled. And they’re doing better than ever. According to a new analysis by the Wall Street Journal, total compensation and benefits at publicly-traded Wall Street banks and securities firms hit a record in 2010 — $135 billion. That’s up 5.7 percent from 2009.  Yet, remarkably, taxes on the top have plummeted. From the 1940s until 1980, the top tax income tax rate on the highest earners in America was at least 70 percent. In the 1950s, it was 91 percent. Now it’s 35 percent. Even if you include deductions and credits, the rich are now paying a far lower share of their incomes in taxes than at any time since World War II.  The estate tax (which only hits the top 2 percent) has also been slashed. In 2000 it was 55 percent and kicked in after $1 million. Today it’s 35 percent and kicks in at $5 million. Capital gains – comprising most of the income of the super-rich – were taxed at 35 percent in the late 1980s. They’re now taxed at 15 percent.”

Every way that you look at it, income tax, capital gains tax and the estate tax, they are all substantially lower than at any time in recent memory.  In order to save necessary programs and to help the economy, additional revenue must be received from the wealthy in addition to significant cuts in corporate and defense welfare.

Obviously, what Sec. Reich is proposing is sacrilege to the Tea Party and their corporate sponsors.  The idea of taking away all of these gifts to the Wealthy won’t be easy and I would expect some of the politicians on the Left to have problems with the proposal just like their brethren on the Right.  The fact of the matter is that if we don’t rein in corporate welfare where is the revenue going to come from?  If we don’t rein in the tax cuts for the wealthy, where is the revenue going to come from?  Nal’s article showed us in graphic form the hollowness of  Rep. Ryan and the Right’s claim that increased revenue will come with increased jobs, all caused by the almighty tax cuts to the rich and famous. Where have we heard that one before??

With that knowledge in hand, the only way that vital programs like Social Security and Medicare could be strengthened and saved is by increasing the revenue stream.  Sec. Reich reminds us that if we would get off the fence and cut defense spending the savings would be significant.  Add in a single payer health care system and the nation would save Billions.  Cutting the excess in our defense budget would be a crime according to many Hawks in Congress, but their anger is usually a disguise for the pet defense projects going on in their respective districts. We can’t wait any longer to rein in those excesses.

We know that cutting the gifts to corporations and to the wealthy will go a long way in increasing economic stability, but we will never get there if the Left does not take a stand.  The huge and successful Wisconsin and Ohio demonstrations against runaway State governments attacking union rights and the middle class should be a stark reminder to all of us that the power to take the country back is in our hands.  The Tea Party is a small minority and look at what they have accomplished.  They have sent the Democratic House and Senate into hiding and convinced a President that the change he promised was actually to make the wealthy richer and corporations more solvent.   Where does the President think his votes are going to come from in 2012?  Certainly not from the Right.  I don’t know about you, but I think it is time for a collective Howard Beal moment!

Respectfully submitted by Lawrence Rafferty, Guest Blogger

 

Additional Source:  Think Progress

34 thoughts on “Should The Wealthy Pay More Taxes?

  1. Well I agree. However, in my experience, your friends at ThinkProgress and most people who circle jerk retweet them are often so busy bashing any Democrat that questions anything in the platform as a bigot, that Obama et. al., have perfect cover to go right on any issue, and it’s completely rational for them to do so!

    I am often told by ThinkProgress how there are no true gay conservatives, no true black conservatives, no true female conservatives, and that those who claim to be have somehow sold out, or our dupes, or are stupid. I am told by Joe Romm at Climate Progress that if I have any doubts whatsoever about his policy positions regarding global warming than I am a sold out dupe earth destroying mother raper.

    And that doesn’t even touch the typical young liberal position that any white male over 35 that doesn’t espouse their particular position is defacto a racist fascist corporatist duped stupid idiot pig too dumb to vote for best interests.

    So what can I say rafflaw, I agree with you, and with Robert Reich (who actually helped found ThinkProgress), and yet I find it amusing how much ThinkProgress is dumbfounded as to why so many people think they can just suck it.

  2. raff,

    Robert Reich getting national exposure from his time as Labor Secretary is one of the few net positives to come out of the Clinton administration.

    He’s a sharp fellow.

  3. Buddha,
    I agree with you and he should get more publicity. He is right on target, even if he did help found Think Progress.
    Anon,
    If you think that there is anything wrong in the linked information from Think Progress, let us know and why.

  4. Oh, and speaking of Howard Beale, Network director Sidney Lumet just passed away at age 86.

    Paddy Chayefsky’s words as put on the screen by Lumet and portrayed by the late great Peter Finch are as relevant today, perhaps even more so, as they were in 1976.

  5. Rafflaw, I was unclear. I was trying to answer your (implicit?) question as to why the Tea Party seems to have such power and why all of Democrats seem to have so little and why no one is going to come rushing to the unions’ aid.

    My response is that Democrats would have made a stand, and have made a stand at many important times, but what you call “the Left” is not necessarily Democrats and many of us have been ravaged and raked over the coals online by many of your friends at ThinkProgress and all the other retweeters of their particular genius blog posts. And our crimes? Yeah, we committed no crime. We just disagreed on certain points.

    There is a huge disaffection with the ThinkProgress Liberals who brought us NAFTA and outsourcing, affirmative action, Kelo, and many other policies that personally hurt one or more of us economically or otherwise seem to infringe on constitutional rights, and when some of us point that out, we are classified as old white bigots and dismissed.

    In the meantime, I do see on TV and online lots of gay conservatives, lots of female Republicans, lots of African American conservatives, and yet ThinkProgress constantly assures me, those people are not real, they are stupid, they have been duped.

    And now you want to rally the left to take a stand, and you actually want to blame people for not taking a stand, but you use ThinkProgress as your rallying point.

    ThinkProgress politics is its own worse enemy. You can’t call everyone who disagrees with you a stupid fascist racist chauvinist sold out creationist misogynist bigot for ten years and then wonder why no one wants to join in your fight. Well you can. I guess. I can see how well that works.

    If you want people to rally with you, you may wish to start making the Democratic party a big tent again.

  6. The only reason there isn’t enough money to run the government is because government overspends. And it overspends on things it has no business spending money on.

    Why should rich people give more money to DC when it cannot even be responsible with the vast sums it already has? And to what purpose? The new totalitarian police state?

    There is no Constitutional authority for Social Security, Medicare, Medicaid, and a myriad other programs. If they were not around, there wouldn’t be a financial crisis in the first place and we would have enough money to run the government and do those things it is lawfully authorized to do.

    If the general welfare clause means that government can spend money on anything it deems to be in the public good and welfare, it would have been unnecessary to limit congresses power by the enumeration of powers listed in Article 1 Section 8. All that would have been necessary to define the power of congress would have been for Article 1 Section 8 to state that “anything the congress thinks benefits the general welfare of the American people may be permitted (and taxed for)”.

    But that is not what they wrote. And the criminal types (Democrats) pretend it is what was written.

    The Father of the Constitution, James Madison, makes it clear:

    “With respect to the two words ‘general welfare,’ I have always regarded them as qualified by the detail of powers connected with them. To take them in a literal and unlimited sense would be a metamorphosis of the Constitution into a character which there is a host of proofs was not contemplated by its creators.”

    A host of proofs which criminal types in the Democratic choose to ignore.

    [audio src="http://www.tenthamendmentcenter.com/wp-content/uploads/audio/podcasts/rob-natelson-111809.mp3" /]

  7. Buddha,
    I did see that Lumet died. That was a great movie!
    anon,
    I can’t agree with your generalization about Think Progress. If you think the Dems tent is small, it still looks huge compared to the Right. I do not see the large numbers of African Americans and Latino conservatives that you refer to. Maybe I missed them whenever there is a Tea Party “event” that is covered by mass media. Of course, when over 100,000 supporters of union rights in Wisconsin marched in Madison, there was hardly a mention.
    I do agree that the Dems and President Obama have missed the boat on several occasions to make the country stronger and strengthen their base. That is partly why I wrote the post. Obama needs to start doing something for the middle class if he thinks he is going to win in 2012.

  8. Tootie,
    As usual, don’t let the facts get in your way. Where is the revenue going to come from if we don’t tax the wealthy and corporations fairly?

  9. I’d like to see tax on the wealthy rolled back to what it was in the 40s, that’s when our economy was at its best and the middle-class was actually strong. So my answer would be a resounding YES!

  10. At about the 3 minute mark, the female character mentions that any program fitting the qualification of general welfare must apply to everyone if it is to be general in nature.

    This would mean that everyone has to participate in Obamacare (no waivers). FDR admitted to such a concept and made sure that everyone was forced into social security, including the rich. Otherwise it cannot be “general”. To grant waivers for Obama’s fascist health care scheme violates the notion that the program is for the general welfare and indeed targets certain groups. You could call it specific, and not general, welfare. And you have to call it a violation of a violation.

  11. The Wealthy and the Corporations must pay a fare share and that is under a system of graduated taxation. Anyone who doesn’t see that is either wealthy, a Plutocrat, or a fool that doen’t know their own self interests.

  12. Doubling tax rate on those earning $1M or more would raise about $200B per year against a deficit of $1500B. You simply can’t get close to a balanced budget by taxing the rich. Government spending must be cut or the federal and state governments must commence outright wealth confiscation. I expect the latter to happen eventually based on the recent history of our lawless government.

    Instead, end the wars immediately. Walk away.

    Shut down the empire, and half the 1000 foreign military bases per year. End all foreign “aid”.

    End the war on drugs entirely and the costly, massive, life-destroying prison-industrial complex it has created.

    End farm subsidies and all other meddling in the agricultural markets architected by ADM and ludicrous ethanol propagandists.

    Shut down national controls over education and dozens of other federal bureaucratic interventions in locally-administered programs.

    Most federal entitlements must be radically reshaped to reflect demographic realities, if not planned for shut down entirely just like the 1970’s GE nuclear reactors our government sponsored decades ago.

    Government must be radically cut or we have sold our children and grandchildren into debt slavery for their lifetimes. “Taxing the rich” will only hasten the capital flight already heading to Asia.

  13. anon,

    You wrote:
    “My response is that Democrats would have made a stand, and have made a stand at many important times, but what you call “the Left” is not necessarily Democrats and many of us have been ravaged and raked over the coals online by many of your friends at ThinkProgress and all the other retweeters of their particular genius blog posts. And our crimes? Yeah, we committed no crime. We just disagreed on certain points.”

    My response:
    That’s your perspective. I follow ThinkProgress. I don’t feel the same way as you. I’m not sure which specific individuals you’re talking about who, you say, have ravaged and raked people over the coals at ThinkProgress. Are you talking about the people who write for ThinkProgress–or people who have commented at ThinkProgress?

    Are you suggesting that Democrats haven’t taken a stand on certain issues because someone/some people at Think Progress criticized their viewpoint? If so, I’d say those Democrats don’t have the courage to stand up for their convictions.

    **********

    You wrote:
    “ThinkProgress politics is its own worse enemy. You can’t call everyone who disagrees with you a stupid fascist racist chauvinist sold out creationist misogynist bigot for ten years and then wonder why no one wants to join in your fight. Well you can. I guess. I can see how well that works.”

    My response:
    Have the authors of posts at ThinkProgress called everyone who posts comments in disagreement with their articles stupid fascist racist chauvinists sold out creationist misogynist bigots?

    Try again!

  14. rafflaw,

    Here’s an article from Vanity Fair that I think you’ll find interesting:

    Of the 1%, by the 1%, for the 1%
    Americans have been watching protests against oppressive regimes that concentrate massive wealth in the hands of an elite few. Yet in our own democracy, 1 percent of the people take nearly a quarter of the nation’s income—an inequality even the wealthy will come to regret.
    By Joseph E. Stiglitz
    May 2011
    http://www.vanityfair.com/society/features/2011/05/top-one-percent-201105?currentPage=all

    Excerpts:
    It’s no use pretending that what has obviously happened has not in fact happened. The upper 1 percent of Americans are now taking in nearly a quarter of the nation’s income every year. In terms of wealth rather than income, the top 1 percent control 40 percent. Their lot in life has improved considerably. Twenty-five years ago, the corresponding figures were 12 percent and 33 percent. One response might be to celebrate the ingenuity and drive that brought good fortune to these people, and to contend that a rising tide lifts all boats. That response would be misguided. While the top 1 percent have seen their incomes rise 18 percent over the past decade, those in the middle have actually seen their incomes fall. For men with only high-school degrees, the decline has been precipitous—12 percent in the last quarter-century alone. All the growth in recent decades—and more—has gone to those at the top. In terms of income equality, America lags behind any country in the old, ossified Europe that President George W. Bush used to deride. Among our closest counterparts are Russia with its oligarchs and Iran. While many of the old centers of inequality in Latin America, such as Brazil, have been striving in recent years, rather successfully, to improve the plight of the poor and reduce gaps in income, America has allowed inequality to grow.

    Economists long ago tried to justify the vast inequalities that seemed so troubling in the mid-19th century—inequalities that are but a pale shadow of what we are seeing in America today. The justification they came up with was called “marginal-productivity theory.” In a nutshell, this theory associated higher incomes with higher productivity and a greater contribution to society. It is a theory that has always been cherished by the rich. Evidence for its validity, however, remains thin. The corporate executives who helped bring on the recession of the past three years—whose contribution to our society, and to their own companies, has been massively negative—went on to receive large bonuses. In some cases, companies were so embarrassed about calling such rewards “performance bonuses” that they felt compelled to change the name to “retention bonuses” (even if the only thing being retained was bad performance). Those who have contributed great positive innovations to our society, from the pioneers of genetic understanding to the pioneers of the Information Age, have received a pittance compared with those responsible for the financial innovations that brought our global economy to the brink of ruin.

    Some people look at income inequality and shrug their shoulders. So what if this person gains and that person loses? What matters, they argue, is not how the pie is divided but the size of the pie. That argument is fundamentally wrong. An economy in which most citizens are doing worse year after year—an economy like America’s—is not likely to do well over the long haul. There are several reasons for this.

    First, growing inequality is the flip side of something else: shrinking opportunity. Whenever we diminish equality of opportunity, it means that we are not using some of our most valuable assets—our people—in the most productive way possible. Second, many of the distortions that lead to inequality—such as those associated with monopoly power and preferential tax treatment for special interests—undermine the efficiency of the economy. This new inequality goes on to create new distortions, undermining efficiency even further. To give just one example, far too many of our most talented young people, seeing the astronomical rewards, have gone into finance rather than into fields that would lead to a more productive and healthy economy.

    Third, and perhaps most important, a modern economy requires “collective action”—it needs government to invest in infrastructure, education, and technology. The United States and the world have benefited greatly from government-sponsored research that led to the Internet, to advances in public health, and so on. But America has long suffered from an under-investment in infrastructure (look at the condition of our highways and bridges, our railroads and airports), in basic research, and in education at all levels. Further cutbacks in these areas lie ahead.

    **********

    Alexis de Tocqueville once described what he saw as a chief part of the peculiar genius of American society—something he called “self-interest properly understood.” The last two words were the key. Everyone possesses self-interest in a narrow sense: I want what’s good for me right now! Self-interest “properly understood” is different. It means appreciating that paying attention to everyone else’s self-interest—in other words, the common welfare—is in fact a precondition for one’s own ultimate well-being. Tocqueville was not suggesting that there was anything noble or idealistic about this outlook—in fact, he was suggesting the opposite. It was a mark of American pragmatism. Those canny Americans understood a basic fact: looking out for the other guy isn’t just good for the soul—it’s good for business.

    The top 1 percent have the best houses, the best educations, the best doctors, and the best lifestyles, but there is one thing that money doesn’t seem to have bought: an understanding that their fate is bound up with how the other 99 percent live. Throughout history, this is something that the top 1 percent eventually do learn. Too late.

  15. I have read and was taught about some of the innovative people from history who became very wealthy because they lived in America. And, those people never thought twice about paying taxes and paying back into the system that gave them the opportunity to become rich and famous. That is what made this country great. People who got rich and knew that they got rich because of opportunities America gave them that other countries would not have given them. Now, we have rich people who are so selfish and only wish to horde their wealth to keep other people from getting it. What a sad bunch of losers America’s wealthy are. They now feel they are entitled to everything and the rest of us are entitled to nothing. They seem to think this country still owns them something–what, I surely don’t know. But, America’s rich people are an embarrassment these days, starting with Donald Trump.

  16. Bonnie,

    Donald Trump! How many times has he had to file for Chapter 11? What a great businessman. One has to wonder what “The Donald” would be doing these days if his daddy hadn’t had money.

  17. Elaine,

    “One has to wonder what ‘The Donald’ would be doing these days if his daddy hadn’t had money.”

    I vote either used car salesman or pimp. Possibly both.

  18. Well … I know one of the articles posted is on the money (pun intended) when the usual naysayers show up … their nonsensical reasoning isn’t worth the time it takes to read.

    Of course these taxes need to be raised and sooner or later it’s going to happen. I vote for sooner.

    As for the teabaggers … once upon a time they were the silent majority (Nixon), then they were the moral majority (Reagan/Bush I), then under Bush II they became the religious right/family values crowd but always, alway they have been the evangelical bloc upon which the republicans depend to turn up on voting day. The name has to change every few years because of the negative connotations that build up in the general public’s mind due to the extreme nature of the bloc’s political philosophy. The newest name change is “Tea Party”. Negative feelings are once again growing stronger within the general public’s mind so the Tea Party will have a new name soon.

    It is this evangelical bloc that has consistently done the bidding of the wealthy who identify with the Republican Party … they are the serf/peasants who worship those who hold wealth and these serf/peasants will always sacrifice the good of their own for the betterment of their betters. It is a religious duty. They have even gone so far as to personify wealth into graven images by creating icons out of Corporations. To tax the wealthy, to tax the Corporation is to tax God.

    Make no mistake … that is the mind set with which we have to deal.

  19. The other thing to consider about Trump is that he basically tried to run his father and brother out of business with frivolous lawsuits. He also sued a Chicago-based buyout artist for essentially having the same name and choosing to use it as part of his enterprises’ corporate name.

    As for the usual trolls, there’s nothing like the suggestion of raising taxes on the rich to bring them out. OTOH, the notion (readily supported with data) that the wealthy benefit more from the tax code than the rest of us is always lost on them.

  20. @ anon: i think the Democrats being the big tent party IS the problem – we can’t agree on anything, while the Republinazis have a single goal in mind and stick to it: everyone else pays, we don’t.

  21. If the super-rich and the corporations like GE, which pays no taxes, were taxed heavily–to the point they were limited in the amounts they could spend to control their serfs in Congress and the judges they elect on the state level, would that not carry us along the road that leads back to democratic, representative gov’t? (Note “democratic” is an adjective, not a noun.)

  22. rafflaw,

    Most of the credit is yours. Via your Robert Reich link, I saw the video. All I had to do was retrieve it from Colbert Nation… :-)

  23. Blouise,
    You are correct that many of the Tea Party regulars do vote against their best economic interests. How do you break through that kind of thinking?

  24. Restoring American Democracy
    by Jeffrey Sachs

    Economist and Director of the Earth Institute, Columbia University

    04/10/11

    http://www.huffingtonpost.com/jeffrey-sachs/restoring-american-democr_b_847125.html

    The White House is basically an ally of the Republican Party. Even the president’s words chortle with delight:

    “A few months ago, I was able to sign a tax cut for American families because both parties worked through their differences and found common ground. Now, the same cooperation has made it possible for us to move forward with the biggest annual spending cut in history.”

    It reminds me of the old Russian joke: “We were at the edge of the cliff. Now we’ve taken a giant step forward.”

    President Obama’s words are incredible. The tax deal last December was perhaps the greatest domestic policy shame of our time. In that particular capitulation to greed, he agreed to extend the tax breaks for the richest Americans, slash their estate taxes, give other corporate tax breaks, and raise the deficit by nearly $1 trillion over 2011 and 2012. Now, he has agreed with the far right to slash entitlements spending for the poor in another “historic” act of cooperation. One more such historic act of cooperation and we’ll be completely ruined.

    end excerpt

    (puzzling, Love the pie.)

  25. Anon nurse,
    It is sad that the President won’t take a stand for the middle class. He should be sticking to the central theme, “what will this do to create jobs?”

  26. rafflaw
    1, April 10, 2011 at 8:25 pm
    Blouise,
    You are correct that many of the Tea Party regulars do vote against their best economic interests. How do you break through that kind of thinking?

    ==================================================

    You don’t. Unprincipled men and women if given an opportunity to grab will continue to grab until stopped. Teabaggers support this unprincipled behavior in others because they harbor it within themselves. They literally worship it.

    There is no changing that behavior, or rehabilitating it, there is only controlling it through law and the enforcement of law in order to protect society from the actions of those who worship the unprincipled.

    These are not the kind of people you ever want on your side … ever. Leave them to the republicans. And when appropriate, bring them to trial and seek a conviction and a prison sentence.

    That has not happened so they are still out there grabbing whatever they can.

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