Economy

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Welcome To The Class War

Posted 8 months ago|8 comments|537 views
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"Class Warfare" is a term you will be hearing a lot these days. The term will be used on all sides, in both liberal and conservative media but mostly the cry will from members of the Republican Tea Party who feel that it's "their class" that is under attack.

President Obama had the gall, the nerve, to take Warren Buffett's idea that he recently wrote about in the New York Times piece called "Stop Coddling the Super Rich." and propose a "Buffett Tax" on millionaires as part of his recommendations to lower the 14 trillion dollar deficit caused by the Bush Tax cuts and the Bush Wars..

Buffett's opinion was that the wealthy should pay higher taxes like they used to and he defines wealthy as those making over $1 million and especially those making over $10 million. To prove his point, he explained how much he paid in taxes and points out that he pays a lower percentage than anyone in his office. He claims he paid about 17% in taxes, while others in his office pay between 33% and 41%.

All of this sounds like a very practical if not prudent idea that would at least bring in more desperately needed Tax Revenue from people who can surely afford it to help reduce the deficit which is hurting all of us, including said rich people. Except the members of the Republican Tea Party in Congress have already started with the same BS talking points they use for everything else they object to. Just once I'd like to hear them tell the truth and say…

"Taxing the Millionaires discriminates against the "Job Creators", even though they are not creating any jobs and many of them actually sent thousands of U.S. based jobs overseas and the "Buffett Tax" is just another "Obama The Kenyan Job Killing Bill" that we must unite to defeat because we signed "Grover Norquist's Pledge" of no new taxes for any millionaires and billionaires. Because we the members of the U.S. Congress have been bought and paid for by multibillion-dollar corporations, some of which, like GE, paid no U.S. income taxes at all. Now, thanks to the Citizens United decision of the Supreme Court we pretty much do what ever those corporations tell us to do. So, sorry middle class, it sucks to be you, maybe one day you'll be rich like us, ...not!

I would love to hear one of the GOP / Tea Baggers say that as that is the truth and then their head would explode, because they can't handle the truth.

Over the weekend in New York City's financial district on and near Wall Street, thousands of protesters gathered in a peaceful protest similar to those we saw in the Arab Spring. Twitter was lit up by hundreds of tweets from @OccupyWallSt and @USDayofRage and many others on the scene as the event unfolded. Mainstream media largely ignored covering it.

Starting in the 1980's under President Reagan we started to deregulate the financial industry. Congress proposed new Bills that repealed laws that were in place to protect us and the "Greed is good" era slowly began. The rich got richer until the rich messed up and then they turned to the taxpayers for help.

The Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA), was signed by President George H. W. Bush on August 9, 1989 after the failure of over 700 Savings and Loans in the 1980's. We bailed them out but failed to take real notice of the problems and on October 3, 2008. President George W. Bush signed the Troubled Asset Relief Program of 2008 (TARP) after the economy tanked and we again bailed out the financial industry by buying and insuring over $700 billion of "troubled assets" they themselves had created.

Why is that we seem to have to cut entitlements that help the middle class, (i.e. Medicare/Medicaid, Social Security) but not cut the entitlements (Bush Tax Cuts, Hedge Fund Tax Loophole) that only help the top 2% of Americans? Why can't the millionaires who can afford it pay just a little bit more, Why?

Welcome To The Class War. Why is anybody surprised that we are now fighting back?
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COMMENTS
Perfect Horizon
Perfect Horizon
Chicago, IL
8 months ago: That bold quoted section in the middle...probably the greatest thing I have read in a long time.
BadCyborg
BadCyborg
San Antonio, TX
8 months ago: Why is it that Buffet's company is $1.5 BILLION in arrears in corporate income tax?
Altruist
Altruist
Eugene, OR
8 months ago: Very good Post!

If you look at historic records, the rich are paying less taxes than they have for 60 years. At the same time the real wages of the middle class has actually gone down while the super rich are making 4 times as much. Income inequality is higher than ever before.

Income inequality is associated with a whole bunch of things that are bad for the nation, worse health, worse education, worse economic growth. http://faireconomy.org/enews/why_is_inco...

The class warfare has been going on for quite a while and the Republicans have shifted the tax burden onto the middle class every single time the tax structure has been "adjusted". A good example is the Ryan plan which became the official Republican budget plan that was voted on and passed by the House. According to the non partisan Tax Policy Center, if that budget is enacted the share of total taxes paid by the bottom 80% would rise from 35% to 42% while the share paid by the top 1% would fall by half from 25% to 13.5%.

The same is true of corporations. They used to contribute 20% of the total revenue generated. Now they only supply 6% of the total revenue. Yes we have high corporate tax rates, but the tax laws are so full of loopholes and tax breaks, that 2/3rds of the corporations paid NO Taxes despite record profits!! http://thepragmaticcenter.com/essay/23-a...
Perfect Horizon
Perfect Horizon
Chicago, IL
8 months ago: "If you look at historic records, the rich are paying less taxes than they have for 60 years. At the same time the real wages of the middle class has actually gone down while the super rich are making 4 times as much. Income inequality is higher than ever before."

~This is true, however you must recognize context. In the past middle class wages were higher because the middle class was largely educated and were working in their fields. Today this is simply not true, Educated people are making less money than before because they are working outside of their fields as inexperienced workers. People without experience get paid less. It is a compacting problem because even within the field of study it is difficult because more education can often lead to more unemployment. I struggled to find employment because I was "overqualified" (meaning "We don't want to pay you for those Masters Degrees") While a few friends with associates degrees had a plethora of employment options because they fit the bill. Educated enough to hire, but not educated to the point where the $$$$ start showing up in the employer's eyes.

As for class warfare, It seems to me that people who were once considered Upper-Middle or Lower-Upper class are now being defined as Lower-Middle class and people who were Middle and Lower-Middle are now Lower Class by definition....perhaps it's unemployment, perhaps its an issue of the economic down turn...maybe it is inflation...or maybe it is a complex set of issues that combined with doomsday preachers and fearmongering radio/tv hosts that have really caused the current situation.

As for taxes...get rid of the national income tax all together. Tax Corporations the same way they are taxed now and implement a national sales tax on every product sold. Revenues will skyrocket because you will be adding 20-60 million taxpayers to the till (all of the 20-60 million illegal immigrants that pay no income tax would then be paying their fair federal share because they still go to the store)
8 months ago: Can he pay more than required by the I.R.S.? Has he?
Are his taxable monies from regular income or investment income?

What again was that quote of his? You know the one.

Something along the lines of "Hold it Forever".
Altruist
Altruist
Eugene, OR
8 months ago: Perfect I think you are right that the answer lies in tax reform.

The current tax structure is unbelievably complex. Let's simplify it so people don't have to hire tax attorneys to pay their taxes.

The right wing is always wanting to go to a sales tax or something similar (The Fair tax) because they are hugely regressive and would allow the rich to pay only a fraction of what they are paying now.

The tax system should be simple, fair, progressive, and should generate more revenue than it does now.

The tax system should reward good behavior like hiring, research, charity, and it should discourage bad behavior like pollution, outsourcing, smoking, drinking, and other drugs.

The simplest would be a small transaction tax (Europe is going with .05%). The banks could automatically deduct this tax every time any money is moved. This would eliminate off shore tax shelters etc. Any corporation or person that did anything in the country would pay. You wouldn't need any tax lawyers, tax forms or anything, it would all be automatic.

Then to make it fairer you could issue 3-4 different types of credit cards, each with a different rate of tax for different behaviors.

A black card that is taxed at .1% for bad behavior. All carbon usage should have this rate as well as nuclear, toxic chemicals, tobacco, drugs, alcohol, hedge funds, derivatives and other types of risky fiscal gambling.

A Brown card with the regular .05 % rate for most stuff.

A green card for R& D, education, charity, clean renewable energy, and food.

Wall Street and the right would hate this of course so the progressives would have to give the right some of what they want by abolishing the Income tax and instating the Fair tax.

This would be a good compromise and rates could be tweeked till we brought in sufficient money to start paying off our debt.

Perfect Horizon
Perfect Horizon
Chicago, IL
8 months ago: A few things:

1. Progressive taxes like that will simply not generate nearly as much revenue as a national sales tax. All taxes are regressive regardless of how they are handled. Taxing the poor is always going to create a higher burden than a proportional version of that tax on the rich.

2. "The tax system should reward good behavior like hiring, research, charity, and it should discourage bad behavior like pollution, outsourcing, smoking, drinking, and other drugs."
~You cannot be serious with this. Taxing people for activities that are legal is essentially kicking liberty in the face. On top of that, taxing smoking and drinking would be the most regressive tax you could put in place...as the vast majority of people that smoke and drink are poor(er).

The tax system should not reward or punish anything, that is what the legal system is for. If you are going to "cave" and go for the national sales tax then your ideas of adding other transaction fees would be making it even more regressive (the natl. sales tax is the least regressive tax we could have). You want to charge more taxes for no reason. A flat national sales tax would generate revenue from the 20-60 million illegal immigrants that are here and not paying taxes now. That difference alone would generate massive increased revenues for the federal government. Not to mention that IRS could be cut down to about 10 employees and the government could stop destroying the rainforests by having to print 10213017324983267498061981728193612986419012837 tax documents every year.
Altruist
Altruist
Eugene, OR
8 months ago: The green card would be half the normal rate (.025%)

This system would be progressive in that the richest 20% who has 85% of the money in the country would be paying 85% of the transaction taxes.

The Fair tax would be more regressive but the prebate would make it more fair and if combined with the transaction tax, the rate could be only 13% instead of the 23% they claim would make it revenue neutral.

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