Put Down Like Dogs
It's just about 2:30 in the morning and I've just wrapped up another 16 hour work day. That's typical in the world of small companies, these days. Cash is hard to come by; I can tell you that my personal productivity factor is way up (rising productivity means GDP gains without additional employment).
Naturally I need to be pissed about politics before I go to sleep, so here's the thought of the night:
Lower tax rates are given to capital gains income because (supposedly) the money saved is re-invested into the economy, creating more jobs and more wealth. When we lower capital tax rates, we raise taxes elsewhere to compensate; these higher taxes are applied to the working class, which is pretty much everyone making under $250,000 or so.
We have seen a dramatic rise in direct investment; the GOP trumpet continuously about the ever-growing number of shareholders.
So if everyday folks are getting into the investment game, which should we be raising their taxes and handing that money to the very richest amongst us? If Joe Everyman is investing, like he apparently is, I really don't see why we don't just let him keep a little more of his money. He's going to invest it anyways, just like Thaddeus Q. Gatesfeller the IIIrd. And I'll tell you another thing: Joe Everyman isn't going to cheat on his taxes, or spend huge sums on legal fees just trying to avoid paying taxes.
Seems to me that the tax cuts for the rich come at additional cost to everyone else. And they aren't designed to increase investment; that would have happened anyway, with direct investing and 401k plans. Because he has to pay higher taxes to subsidize the truly wealthy, our Joe just doesn't have much of a chance of ever developing much wealth on his own. After all, his real income has only risen by 4% in constant dollars since 1972. Thaddeus has seen his wealth rise in that time frame by over 500%. Yes, that's five hundred percent. Trickle-down is working for someone...
So why are we screwing over the finances of this country and most people who live in it?
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"has to pay higher taxes to
"has to pay higher taxes to subsidize the truly wealthy"
The numbers don't back this statement up. The 'truly wealthy' carry over 80% of the tax burden.
The numbers absolutely do
The numbers absolutely do back this up. We can begin this discussion, if you'd like...first, you need to define what you mean by truly wealthy, and how you arrive at your 80% number.
I caution you that when you start looking into this, nothing is quite what it seems...
Classic quintile division analysis is a blunt tool used to hide what's really going on. Fractile analysis reveals what's underneath...
On income tax alone, by the
On income tax alone, by the way, to get to the 80% figure you have to reach all the way down into the 50k-75k bracket.
Source: Individual Income Tax Returns, Tax Year 2000
Table 1.1--Selected Income and Tax Items, by Size and Accumulated Size of Adjusted Gross Income--Continued
Income tax, published in this manner, is HIGHLY deceptive. Why? The TOTAL tax burden must also include social security taxes, which are currently in the 15% range (yes, 15%, including employer's contribution, which would otherwise be in that employee's pocket).
The picture changes dramatically when you start including that. I'll prep some tables.