Shared by Pradeep G.
Corporations and the Rich Paid 1960s-Level Taxes...
By feeding the rich and
their corporations one massive tax break after another, lawmakers
have thrown a monstrous monkey wrench into our national finances.
for America's Future / By Sam
July 24, 2011
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.
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
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 monstrous monkey
wrench into our national finances.
Some numbers — from an Institute for Policy
Studies report released
this past spring — can help us better visualize just how
monumental this political failure has been.
If corporations and households taking in $1 million or
more in income each year were now paying taxes at the same annual
rates as they did back in 1961, the IPS researchers found, the
federal treasury would be collecting an additional $716 billion a
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
vanish over the next decade.
Similarly stunning numbers have 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
shared some fascinating
“what ifs” that dramatize 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
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. Again, some numbers can help us better visualize
that plutocratic big picture.
In 2008, the IRS revealed this past May, 400
Americans reported at
least $110 million in income on their federal tax returns. These 400
averaged $270.5 million each, the second-highest U.S. top 400 average
income on record.
1955, by contrast, America’s top 400 averaged — in 2008
dollars — a mere $13.3 million. In other words, the top 400 in
2008 reported incomes that, after taking inflation into account,
amounted to more than 20 times the incomes of America’s top 400
a half-century ago.