Tea Party

[jose-uno]

More options Apr 16, 8:39 am

From: Biff <jacobsenj...@sbcglobal.net>
Date: Thu, 16 Apr 2009 06:39:56 -0700 (PDT)
Local: Thurs, Apr 16 2009 8:39 am
Subject: A Short Citizen's Guide to Kooks, Demagogues, and Right-
Wingers On Tax Day
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"No one likes to pay taxes, so tax day typically attracts a range of
right-wing Republicans, kooks, and demagogues, all of whom tell us
how
awful we have it. Here's a short citizen's guide (that is, a
citizen's
guide that's short rather than a guide for short citizens) responding
to the predictable charges:

1. "Americans pay too much in taxes." Wrong: The United States has
the
lowest taxes of all developed nations.


2. "The rich pay too much! The top ten percent of income earners pay
over 72 percent of all income taxes!" Misleading: The main reason the
rich pay such a large percent is they've become so much richer than
the bottom 90 percent in recent years. If you look at what they pay
as
individuals -- the percent of their incomes over and above the
highest
rate below them -- you'll see a steady decline over the years. When
Republican Dwight Eisenhower was president, the marginal rate on the
highest earners was 91 percent (after deductions and tax credits,
closer to 50 percent); by 1980 it was still up there, at 70 percent
(an effective rate of closer to 45 percent); under Bill Clinton, it
was 38 percent (an effective rate closer to 28 percent).


Look at the after-tax earnings of families and you'll see what's
really going on. Between 1980 and 2000, the after-tax earnings of
families at the top rose more than 150 percent, while the after-tax
earnings of families in the middle rose about 10 percent. The Bush
tax
cuts of 2001 and 2003 raised the after-tax incomes of most Americans
by a bit over 1 percent -- but raised the after-tax incomes of
millionaires by 4.4 percent.


3. "The bottom 60 percent pay only 3.3 percent of the taxes!"
Misleading again. Most Americans are paying more in sales taxes than
they ever have. Property taxes have also been rising at a steady
clip.
And Social Security taxes have also risen (thanks to the Greenspan
Commission), while earnings over about $100,000 aren't subject to
Social Security taxes. So-called "sin" taxes (mostly beer and
cigarettes) have also skyrocketed. All of these taxes take a bigger
bite out of the paychecks of people with lower incomes than they do
people with higher incomes.


4. "Obama is raising your taxes!" Wrong. Obama is cutting taxes for
95
percent of Americans, by about $400 per person a year -- not a
whopping tax cut, to be sure, but not a tax increase by any stretch.
Only the top 2 percent will have a tax increase, but even this tax
increase is modest. Basically, they go back to the rates they were
paying under Bill Clinton (their deductions will be limited to 28
percent, which is only fair). And they won't start paying this until
2011 anyway.


5. "The huge debts we're wracking up will cause your taxes to rise!"
Wrong again. When it comes to the national debt, as I've said before,
the relevant statistic is the ratio of debt to the gross domestic
product. The only sure way to bring that debt down and make it
manageable in future years is to get the economy growing again --
which requires that, in the short term, the government spend a lot of
money (because consumers and businesses won't). In the long term, the
biggest source of concern is rising health-care costs. And that's
something Obama and Congress are aiming to tackle.


6. "We have a patriotic duty to stand up against Washington taxes!"
Just the opposite. We have a patriotic duty to pay taxes. As multi-
billionaire Warren Buffett put it, "If you stick me down in the
middle
of Bangladesh or Peru or someplace, you'll find out how much this
talent is going to product in the wrong kind of soil. I will be
struggling thirty years later." President Teddy Roosevelt made the
case in 1906 when he argued in favor of continuing the inheritance
tax. "The man of great wealth owes a particular obligation to the
state because he derives special advantages from the mere existence
of
government."


An acquaintance from law school, now a partner in one of Washington's
biggest and wealthiest law firms, explained to me one day over lunch
how he and his partners use tax rules to create offsetting taxable
gains and losses, and then allocate the gains to the firm's foreign
partners who don't pay taxes in the United States. That way, they
keep
the losses here and shelter their income abroad. I noticed he had an
American flag lapel pin. "You're supporting our troops," I said,
referring to his pin. "Yup," he replied, entirely missing my point.


True patriotism isn't cheap. It's about taking on a fair share of the
burden of keeping America going."