Today the New York Times (1/18/11) reports a big scoop.
A “Tea Party commission” convened by Freedom Works is set to announce its crowd-sourced $6 trillion debt reduction plan—”A copy of the preliminary findings was provided to the New York Times,” Kate Zernike reports.
The story’s second paragraph critiques the plan from the right for not doing enough about Social Security and Medicare, which Zernike asserts “are two of the biggest contributors to the nation’s deficit.” This is not true, especially when it comes to Social Security—but corporate media prefer to have discussions of the deficit that bash Social Security.
The larger problem is why this proposal is being covered at all. Even Zernike’s account suggests that it doesn’t really add up:
FreedomWorks says that repealing the healthcare legislation would cut $1.2 trillion, but the Congressional Budget Office has projected that repealing the legislation would actually increase the deficit by $210 billion over the next 10 years.
It’s useful to recall how the People’s Budget of the Congressional Progressive Caucus was treated by outlets like the New York Times. This was a serious plan put forward by legislators and endorsed by several high-profile economists. And it couldn’t get into the news section of the New York Times. But this thing can.
It’s like Herman Cain’s imbecile 9-9-9 “plan” for the over haul of the tax system. The Chicago Tribune asked on it’s front page whether or not the Cain plan would work, and directed readers to a separate article back on about page eight. There, we discovered that it most certainly would not work, though one had to read way into the article to find the lone sensible voice on the matter. Cain’s crazy musings are of course just another call for a flat tax, a very bad idea indeed, but because certain very wealthy jackasses (like Steve Forbes) love the old flat tax, it always gets a hearing, no matter how lame and stupid the delivery or what nutzoid grifter is pitching it this week. I see–of course!–that the cracker from Texas has a flat-tax plan himself. As usual, this breath-taking idiocy is taken with great reverence by the press. Probably Ms. Zernike will do a nice write-up for the Times.
And so now the Tea-Baggers have a “plan” too . . . which will be revealed as a resentful, half-bright set of ravings that include destroying the already tattered social safety net, and perhaps making a pledge that one must kiss Grover Norquist’s ass in publick. Or, better yet, all Bagger congress-people must get a Norquist tramp-stamp on their asses (ladies can opt for the right shoulder) that contains a picture of the great man himself, with the legend: “I promise to never, never raise taxes, Daddy! Never!”
@TimN – I am in NO way a supporter of Cain (or any of the idiotic GOP candidates for that matter), and I certainly don’t agree with the sales tax portion of his 999 plan. However, I have long supported the idea of a flat income tax on businesses and individuals because it seems to be the most fair (and simple) approach to the tax system. So, I’m curious as to why you are against it. Would you help me understand why it might be a bad idea? Thank you.
I was at Walmart (sorry) yesterday and a supporter of a local TP “personality” was there. Written on the back window of their vehicle was a “I hate redistribution of the wealth” rant. I guess they were there to spend their fortunes at Walmart ??? The lady sitting in the vehicle looked to need a good dentist as well. Some people’s admiration for the OFTEN ill gotten gains of others is touching, isn’t it? Why didn’t the TP support all those whose pensions were redistributed back to their companies who then gave executives big bonuses. Or when the gov’t redistributed money with corporate welfare and tax breaks given to no one but the rich there was silence.
On the fairness of a flat tax:
Those who benefit most from the activities of government should contribute most to it’s operation. A trasnational corporation based in the USA but doing business in a third world dictatorship to take advantage of cheaper labor benifits from the very expensive force projection capabilities maintained by our government. Absent the backing of our power, the transnational could count on expropriation of any overseas investments. Yet, in practice, such entities are able to avoid even the taxes they are theoretically supposed to pay by leaving their profits in offshore shells until congress passes a
Tax holiday allowing them to repatriate their profits at a fraction of the regular corporate tax rate. This is done with frequency (most recently in 2004). This is just one line of argument, applying mostly to corporations. Reflect also on the fact that money is treated as political speech, so any surplus left over meeting basic needs can be used to increase one’s power and improve one’s ability to make more money. I could go on, but I need to cook breakfast for my family.
Sorry to post another comment, but I need to to add that interest paid on debt incurred to meet basic needs is essentially a tax paid by people with less money to people who have alot more. People without a surplus sufficient to influence public policy have no say in this sort of redistribution.
You betcha, TD: I’ts unfair because everyone is paying at the same rate. Think about it; there are people who don’t pay any Federal income tax now because they literally don’t make enough money to do so. I’ve been through this at FAIR blog just last week with a troll, but I’ll try again.
A flat tax is a regressive tax–if I make, say, $20K a year and pay ten percent of that, I take a serious hit (there are millions of Americans who do indeed make that amount, and less, per year) on my overall amount of income. It’s what you’re left over with that counts, always. If I make $200,000 a year . . . following me? And if I make, say, $20,000,000 a year (less than half of what Johnny Depp will make this year), well, Johnny Depp, under Cain’s flat tax, will realize a massive tax break. And not just Depp, of course. Pro baseball players, certain well-paid actors, Britney Spears, Lady Gaga, George W. Bush, Bill Clinton, many politicians (who just love them a flat tax) will realize huge breaks. The working poor, the lower and middle classes (economically speaking)? They take a hit, and a big one at that, on their overall income.
A progressive income tax takes more as a percentage as you make more. You are in a certain bracket until you make enough to put you in the next highest bracket, and so on. At $20k, I don’t pay at the same rate as Mr. Depp, or Derek Jeter, or that idiot Cain, or that dumbell Rick Perry (who of course unveiled a flat tax of his own). Do they pay a higher percentage of their earned or unearned money? Of course they do! But they have far, far more money, both before and after, and can afford to do so. A progressive income tax is fair; a regressive one is unfair. This is essentially the wisdom of the ages . . . except here, where malefactors of great wealth have convinced the ignorant that the more money you make, the less your tax burden should be.
And as far as simplicity goes: Our current tax structure is complex not because it’s progressive, but because it was delberately made that way over the decades by politicians (of both parties) so that the rich and corporations could literally mine the tax code. It doesn’t have to be this way; our current progressive sytem could be made even more progressive, and equitable, but that won’t happen until the money is taken out of politics. A fair progressive system would allow everyone to take about five minutes to fill out their taxes on a 3 by 5 card. The whole business about the simplicity of a flat tax is a canard. The great irony here is that, even though, say, GE would theoretically pay less under a flat tax, they would never go for it: why pay a flat, guaranteed rate of ten percent when they can game the current, complex system (which is exactly what they do) and pay zero percent?
Taxes are the price we pay for civilisation, TD. We can have a low tax, low wage country (what we are getting now, and it’s getting worse by the day), or we can have a high tax, high wage country (what we once had, briefly, and what we deserve in a functioning democracy). We can’t have both. Democracy and fairness and shared sacrifice are irrelevant to the Right–indeed, they have open and hostile contempt for these things. They no longer pretend otherwise, and it’s time for us to give back the contempt for their bad ideas, along with heaping amounts of scorn and ridicule for their lies and treachery.
You absolutely need to read the following, in order of rank: David Cay Johnston’s Perfectly Legal, and Barlett and Steele’s America: What Went Wrong and America: Who Really Pays The Taxes? Read them, and be prepared to get really pissed off. And then you’ll know why the Occupy movement so frightens everyone from the Wall Street titans to their imbecile footmen and courtiers in the media. Ordinary people are starting to understand that the system has been rigged to benefit those that have the most. The Money Power will concede nothing without a fight. And remember: All taxation is redistribution of wealth. It cannot be otherwise.
P.S.: Carol Crown noticed something all too common in the modern era. Back 75 or 100 years ago, the Wal-Mart woman’s forebears never would have been fooled like she is. They would have recognized immediately, almost by cold instinct, that every one and every entity from Glenn Beck to Wal-Mart was part of something they would have referred to as the “Money Power.” When one can’t tell the difference between one’s friends and one’s enemies, one is truly lost.
@TimN – Thanks for taking the time to explain why you are opposed to a flat tax system. It’s always good to get differing perspectives. I’ll have to check out the books you recommend, as well, to gain an even deeper understanding. Thanks again.
Thanks to Darren and Ken for their great posts. Watch for the right’s trick about the top 1/5 paying 70% of federal income taxes; while true, it is no justification to cut their taxes, as the right would have you believe. Because of the huge and growing income gap, the wealthy pay a lower percentage of their tax on their incomes while contributing relatively more to the federal treasury. This seeming paradox occurs only because the bottom 4/5 have seen no gain in inflation -adjusted income over a 30 year period. Mechanization, trade agreements, and weakened unions have hurt their earnings the most, while those who deal in finance have benefited from these same changes in the US economy that have injured the bottom 4/5. Their (the bottom 4/5) relative tax contributions were bound to fall as they fell further and further behind, trying to catch up by working more hours, other jobs, and a spouse, while using expensive credit to keep afloat. Meanwhile, those with stocks and representative wealth saw their holdings go up 12 times since 1980, as you can prove through the Dow Jones Index, which was about 1000 in 1980, but stands at 11,000 today. That index represents the value of capital investment, which has often been taxed at lower maximum rates than earned income has been taxed. Or, think about Bill Gates walking into a small arena of 1,000 folks. If Gates pays 5% taxes on a billion in income, that would yield 50 million dollars in taxes, which would be 10 times the amount that the 1000 attendees collectively contributed in tax payments. 5 Thousand Dollars from each of the 1,000 attendees would yield Five Million Dollars in taxes, if we use 5 Thousand as the average federal income tax contribution. The right would claim that Gates’ taxes should be further reduced, to below 5%, since Gates has paid 50 million of the 55 million collected from this group (90.9%). This example shows how ridiculous the right’s argument is, as relative contribution has nothing to do with whether one is paying the fair amount of federal income taxes.
Well, thanks to Darren and TimN. Sorry.
Thanks for the interesting and accurate commentary about the tax situation in these here states, John Wolfe. The plain talk about the absurdity and real craziness of the reactionary right’s ideas about taxation needs to get a hearing–that a nincompoop like Paul Ryan and his bad plan are taken seriously by the media is unnerving. Meantime, The House Progressives put forth a sensible, truthful plan (the people’s budget) and it’s either ignored or ridiculed. Not good.
The tea party only makes sense to folks who don’t really want to do their homework. Ditto with the flat tax. Sounds good, but it’s like Ronald Ray-guns who let us all think that he was a boot-strap kinda guy when he was really a military boot-licking kinda guy. If trickle-down was gonna work, we ought to all be drowning in trickles by now. I never saw a drop.
Wouldn’t it be a wonderful event to celebrate if the Tea Party would show any concern about the big government that conducts endless wars with an unlimited budget: no expense is too great when it comes to blowing up things, destroying objects, and killing people. What a legacy the Tea Party leaves for future generations to ponder! Have these people no sense of decency at long last?
@ TimN and Darren. I wish I could so eloquently state the tax facts. You guys should get published. More people need to see this side of the tax debate. Thanks.
One more thing; I recently read three of Robert Kyosaki’s “Rich Dad Poor Dad” books. Over and over he states the tax laws are not fair – they’re (I’m paraphrasing) written by the rich for the benefit of the rich. Those books actually lowered my opinion of the ethics of the rich.