Promiscuous Wealth: Emasculate The Rich | Ed Strong

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If corporations and individuals with $1 million or more in income each year paid taxes at 1961 rates, there would be an additional $716 billion a year.

Once upon a time in America, back a century ago, our nation?s rich paid virtually nothing in taxes to the federal government. And that same federal government did virtually nothing to better the lives of average Americans.

But those average Americans would do battle, over the next half century, to rein in the rich and the corporations that made them ever richer. And that struggle would prove remarkably successful.

By the 1950s, America?s rich and the corporations they ran were paying significant chunks of their annual incomes in taxes ? and the federal projects and programs these taxes helped finance were actually improving average American lives.

America?s wealthy, predictably, counterattacked ? and, by the 1980s, they were scoring successes of their own.

Today, the rich and their corporations no longer bear anything close to their rightful share of the nation?s tax burden. The federal government, given this revenue shortfall, is having a harder and harder time funding initiatives that help average working families. The result: a ?debt crisis.?

This ?debt crisis? in no way had to happen. No natural disaster, no tsunami, has suddenly pounded the United States out of fiscal balance.

We have simply suffered a colossal political failure. Our powers that be, by feeding the rich and their corporations one massive tax break after another, have thrown a monkey wrench into our national finances.

Some numbers ? from an Institute for Policy Studies report released this past spring ? can help us better visualize how monumental this political failure has been.

In other words, if the federal government started taxing the wealthy and their corporations at the same rates in effect a half-century ago, the federal debt to investors would almost totally disappear over the next decade.

Similarly stunning numbers have just come, earlier this month, from MIT economist Peter Diamond and the University of California?s Emmanuel Saez, the world?s top authority on the incomes of the ultra-rich.

These two scholars have calculated some fascinating ?what ifs? that dramatize just how spectacularly the incomes of our wealthiest have soared over recent decades.

In 2007, Diamond and Saez point out, taxpayers in the nation?s top 1 percent actually paid, on average, 22.4 percent of their incomes in federal taxes.

If that actual tax burden were to about double to 43.5 percent, the top 1 percenter share of our national after-tax income would still be twice as high as the top 1 percent?s after-tax income share in 1970.

So why aren?t we taxing the rich? Why are we now suffering such fearsome ?debt crisis? angst? Why are our politicos so intent on shoving the ?fiscal discipline? of layoffs and cutbacks ? austerity ? down the throats of average Americans?

No mystery here. Our political system is failing to tax the rich because the rich have fortunes large enough to buy off the political system.

After taxes, and after adjusting for inflation, 2008?s top 400 had a staggering $38.5 billion more left in their pockets than 1955?s most awesomely affluent.

Multiply that near $40 billion by the annual tax savings the rest of America?s richest 1 percent have enjoyed over recent years and you have an enormous war chest for waging class war, billions upon billions of dollars available for bankrolling think tanks and candidates and right-wing media.

In the face of these billions, should the rest of us, America?s vast non-rich majority, just throw in the towel and give up? Our counterparts a century ago certainly didn?t. They challenged their rich, on every front imaginable. They eventually sheared their rich down to democratic size.

Source: http://ed-strong.com/?p=3459

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