The Tax Hikes That Republicans Love
Paul Ryan and Herman Cain want to raise taxes on the middle class
This is the Democratic "fairness" argument turned upside down, which may prove to have limited appeal. What will appeal to most Americans even less are the proposed Republican solutions, like a national sales tax. And what might surprise them is that the first president to expand tax relief for the working poor was that almighty Republican icon, Ronald Reagan, whose name is constantly invoked by politicians unworthy of his legacy.
However piously they cite the Gipper as their idol, the Republican candidates for president seem united in their desire to repeal the earned income tax credit, which he justly praised in 1986 as "the best anti-poverty, the best pro-family, the best job-creation measure to come out of Congress."
Now, Republican politicians increasingly reject the earned income credit as an immoral form of "welfare," because its provisions have helped to ensure that roughly 47% of Americans pay no federal income tax, with the poorest receiving a modest rebate, instead. That statistic has been distorted all too often into the false assertion, usually uttered on Fox News Channel or right-wing talk radio, that the poorer half of the nation's population "pays no taxes."
Of course the working poor pay lots of taxes. In fact, they tend to pay more as a share of their income than the very rich, plenty of whom do not work at all. The poor pay state and local income tax as well as sales taxes, gas taxes and utility taxes, but above all they pay Social Security and Medicare taxes on the very first dollar of income they earn (and on every dollar up to the $106,000 ceiling that shelters the income of higher earners). To suggest that the working poor receive government benefits without paying anything is a brazen lie.
Workers Can't Afford Higher Taxes
Aside from the earned income credit, there is another very basic reason why the working poor don't pay income taxes. After decades of falling wages and rising inequality, they literally cannot afford it. As the noted economics reporter David Cay Johnston explained last April 15, the average annual income among the bottom half of American taxpayers was around $15,000. With the first $9,350 exempt from federal income tax for single people, a figure that rises to $18,700 for married couples, millions of households don't earn enough to owe anything to the IRS.
At the same time, Johnston pointed out that many of the wealthiest families in the country also pay no taxes thanks to loopholes such as the "carried interest" provision, which Republicans fight ferociously to preserve against "socialist" demands that bankers and investors pay the same rate as their secretaries and janitors.
Although polls show that most Americans—including most Republican voters—strongly favor raising rates on the wealthiest taxpayers, the GOP leadership is sworn to prevent any such reform. Rather than close the grossest loopholes and deductions exploited by billionaires, Republican politicians want to punish all those families living large on $300 a week by taxing them more.
One way to do that—favored by House Budget Chairman Paul Ryan (R-Wis.), and presidential candidate Herman Cain, among others—is to impose a national sales tax or value-added tax.
The result, as any tax expert could explain, would shift the national tax burden even further from the wealthy to the working poor and middle class. It is their form of class warfare. And unless the rates were much higher than proposed in Cain's "9-9-9" plan or Ryan's original budget, a sales tax would increase deficits and debt instead of reducing them.
Why millionaires like Ryan and Cain favor such schemes is obvious enough. What is far less obvious is why they can still pretend that they revere Reagan—or that they want to cut taxes for anybody except themselves.
© 2011 Creators.com
People don't choose poverty. Nice try. As for taxes, people should pay taxes according to their means. Earn more, pay more. Earn less, then pay less. If there are no taxes, how do you suggest making your government work? Not interested in a functioning government? How do you define government? What do you want government to do for you? What do you want it to do for others? Perhaps you'd like to dismantle government and privatize most of government's functions. How do you propose to pay for a privatized government?
Okay, he is blacker than Obama, but he is a BUSINESSMAN. Right-wing minded people keep saying we need more business people in government, not regulatory Ralph Nader types. -- And he did the right thing, built his Godfathers Pizza business the way it should have been, off the no-benefits backs of "casual workers", young workers who are just passing through, not intending to stick around and collect a pension or build up a 401k. -- Not like Henry Ford, the businessman who idolized Adolph Hitler (and Hitler idolized Ford). Ford, who wanted his workers to be paid well enough to buy the products his company made. Henry's high pay standards was the root of the UAW rise to power that created all the structural defects of unsustainable obligations after the business is to be cashed out, cashed out due to the plant being old, it's ground too polluted to sell to the next buyer.
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9-9-9 plan, Think about it... Drop Corporate tax rate to 9%, way down from the current rate of 35%. Business will no longer have to find valid deductions anymore, can go into "harvest mode", take in record profits, do not re-invest in the company, be cash flush even more so than today. (does that create jobs?)
Drop personal tax rate to a flat tax of 9%, down from Reagan's bottom 10% bracket, way down from the top 35% bracket, perfect for paying out huge salaries instead of giving stock options. What a way to cash out of a dying American business you cannot sell, especially after the 9% corporate tax allowed the build up of cash. -- Oh, no capital gains tax either (doesn't even rate a 9), dropped from the current rate of 15%, the reason Warren Buffet pays less % in taxes than his secretary. -- And what can I do with my sell-out cash? I can take it to a low cost country where there is no room to go but up! (Again, does that create American jobs?)
Oh, but that 9% national sales tax. Whoops, this hits the working class who used to have their 10 or 15% bracket, 'cuz now the working class has their 9% income tax, plus the 9% sales tax when they spend that paycheck, total of 18% (who from the working class saves these days, every penny gets spent by necessity)... Tax increase for them. -- Mr Penny Packer will love it, because he collects his income, but does not spend it! We all know that the bank does not collect 9% sales tax when we buy a CD or investment... or will Herman want to charge that 9% sales tax for every investment purchased by the wealthy? Congress will not let him, only Russ Feingold would have voted in favor.
Know what else? That 9% sales tax is for when I buy an American product, no US sales tax at all if I spend my money outside the US, and buy a factory in China or India. (3rd time is the charm, does that create American jobs?)
Back to the tax on buying a CD... Double taxation you say? No way can they charge a 9% sales tax as MoneyBags buys his CDs, treasury notes, stocks, and bonds when he was already taxed 9% from his paycheck... But, when I buy my Burger King Whopper, I still pay that sales tax even though both the feds and state have taken their income tax on my paycheck!
Can we keep this thing fair? I don't think so!