Where Pay for Chiefs Outstrips U.S. Taxes
From The New York Times:
At least 25 top United States companies paid more to their chief executives in 2010 than they did to the federal government in taxes, according to a study released on Wednesday.
The companies — which include household names like eBay, Boeing, General Electric and Verizon — averaged $1.9 billion each in profits, according to the study by the Institute for Policy Studies, a liberal-leaning research group. But a variety of shelters, loopholes and tax reduction strategies allowed the companies to average more than $400 million each in tax benefits — which can be taken as a refund or used as write-off against earnings in future years.
The chief executives of those companies were paid an average of more than $16 million a year, the study found, a figure substantially higher than the $10.8 million average for all companies in the Standard & Poor’s 500-stock index.
The New Resentment of the Poor
From The New York Times:
Representative Eric Cantor, the House majority leader, and several senators have made similar arguments, variations of the idea expressed earlier by Senator Dan Coats of Indiana that “everyone needs to have some skin in the game.”
This is factually wrong, economically wrong and morally wrong. First, the facts: a vast majority of Americans have skin in the tax game. Even if they earn too little to qualify for the income tax, they pay payroll taxes (which Republicans want to raise), gasoline excise taxes and state and local taxes. Only 14 percent of households pay neither income nor payroll taxes, according to the Tax Policy Center at the Brookings Institution. The poorest fifth paid an average of 16.3 percent of income in taxes in 2010.
Economically, reducing the earned income tax credit and the child tax credit — which would be required if everyone paid income taxes — makes no sense at a time of high unemployment. The credits, which only go to working people, have always been a strong incentive to work, as even some conservative economists say, and have increased the labor force while reducing the welfare rolls.
The moral argument would have been obvious before this polarized year. Nearly 90 percent of the families that paid no income tax make less than $40,000, most much less. The real problem is that so many Americans are struggling on such a small income, not whether they pay taxes. The two tax credits lifted 7.2 million people out of poverty in 2009, including four million children. At a time when high-income households are paying their lowest share of federal taxes in decades, when corporations frequently avoid paying any tax, it is clear who should bear a larger burden and who should not.
What Obama Can Learn From Harry Truman
From The Atlantic:
[Republicans] judged that they could win even though their bottom-line position was indefensible on its face. After eight years of squandering a surplus and racking up record deficits, they now suddenly determined that deficits were destroying the country. But despite this, and despite the fact that income disparity is now greater than it has been at any time since the late 1920s, greater than that of any other advanced industrialized nation, and despite the fact that middle class income has been effectively stagnant for the past 30 years while the richest 1 percent have grown ever richer, and despite the fact that the Bush tax cuts took $2 trillion out of the public coffers, and despite the fact that, as Drew Westen recounted in his New York Times piece, 400 people now control more of the country’s wealth than 150 million others, despite all that, the Republican caucus categorically refused to consider one penny of tax increases for even the wealthiest Americans. This position can no longer be considered economics, and it can’t even be considered politics. It’s more like religious dogma. And it isn’t only absurd, it’s obscene.
Bad Food? Tax It, and Subsidize Vegetables
While I’m not wild about this particular course of action, we must do something. Our country continues to gain weight, which adds tens of billions to our collective health care costs. Meanwhile, many Americans struggle to feed themselves. Here in Arkansas, roughly one in four children are at risk of going hungry each day. (Arkansas is currently saddled with the highest rate of food insecurity in the country.)
From The New York Times:
The average American consumes 44.7 gallons of soft drinks annually. (Although that includes diet sodas, it does not include noncarbonated sweetened beverages, which add up to at least 17 gallons a person per year.) Sweetened drinks could be taxed at 2 cents per ounce, so a six-pack of Pepsi would cost $1.44 more than it does now. An equivalent tax on fries might be 50 cents per serving; a quarter extra for a doughnut. (We have experts who can figure out how “bad” a food should be to qualify, and what the rate should be; right now they’re busy calculating ethanol subsidies. Diet sodas would not be taxed.)
Simply put: taxes would reduce consumption of unhealthful foods and generate billions of dollars annually. That money could be used to subsidize the purchase of staple foods like seasonal greens, vegetables, whole grains, dried legumes and fruit.
We could sell those staples cheap — let’s say for 50 cents a pound — and almost everywhere: drugstores, street corners, convenience stores, bodegas, supermarkets, liquor stores, even schools, libraries and other community centers.
This program would, of course, upset the processed food industry. Oh well. It would also bug those who might resent paying more for soda and chips and argue that their right to eat whatever they wanted was being breached. But public health is the role of the government, and our diet is right up there with any other public responsibility you can name, from water treatment to mass transit.
Wrong Wrong Wrong
From The New York Times:
Bruce Bartlett points out something I had forgotten: the 1993 Clinton tax increase wasn’t the first time conservatives predicted doom from any rise in tax rates. They did the same in response to the Reagan tax hike of 1982 — and yes, the sainted Reagan, after cutting taxes at the beginning, raised them repeatedly thereafter.
What actually happened, of course, was a V-shaped recovery — Morning in America — which was mainly due to Fed policy, but got credited to the 1981 tax cut. And the 1982 tax hike got sent down the memory hole.
The story I knew was about that Clinton tax hike, which was supposed to send the economy into a tailspin.
Let’s also mention the Bush tax cuts, which were supposed to produce a vast boom, and ended up being followed by the weakest recovery of modern times.
The point is that these people have been wrong about everything — and yet tax-cut magic is the official religion of the GOP.
The Bush Tax Cuts: Ten Years Later
From Mother Jones:
You probably didn’t realize it, but June 7, 2011, is a momentous day in US history. It marks the 10-year anniversary of the signing into law of the Bush tax cuts, a day when President George W. Bush helped replace an unprecedented federal budget surplus with a mountain of debt in order to slash taxes for rich people (including dead ones). The anniversary of the cuts comes at a particularly fortuitous moment, with the political classes deep in debate over the increase in the federal deficit. Now is a good time to take a look back to see just how well those tax cuts have worked out for the country.
Super rich see federal taxes drop dramatically
From the Associated Press:
WASHINGTON – As millions of procrastinators scramble to meet Monday’s tax filing deadline, ponder this: The super rich pay a lot less taxes than they did a couple of decades ago, and nearly half of U.S. households pay no income taxes at all.
The Internal Revenue Service tracks the tax returns with the 400 highest adjusted gross incomes each year. The average income on those returns in 2007, the latest year for IRS data, was nearly $345 million. Their average federal income tax rate was 17 percent, down from 26 percent in 1992.
Over the same period, the average federal income tax rate for all taxpayers declined to 9.3 percent from 9.9 percent.
The top income tax rate is 35 percent, so how can people who make so much pay so little in taxes? The nation’s tax laws are packed with breaks for people at every income level. There are breaks for having children, paying a mortgage, going to college, and even for paying other taxes. Plus, the top rate on capital gains is only 15 percent.
The 3 Biggest Tax Breaks -- and What They Cost Us
From The New York Times:
If there is one big-ticket budget item on which Democrats and Republicans should be able to find common ground, it’s tax breaks. Each of the various bipartisan deficit panels has called for a big reduction, saying such breaks — exemptions, deductions, credits and other loopholes — are inefficient and unaffordable. All told, they cost the federal government about $1.2 trillion in lost revenue last year. As it happens, the budget deficit was $1.3 trillion.
