July 20, 2011
How the Super-Rich are Bleeding the Treasury
Understanding the Federal "Debt Crisis"
By SAM PIZZIGATIOnce 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.
If corporations and households amassing $1 million or more in income each year were now paying taxes at the same annual rates as they did in 1961, the IPS researchers found, the federal treasury would be collecting an additional $716 billion a year.
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. Again, some numbers can help us better visualize the 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.
In 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.
But 1955's top 400 didn't just make far less than 2008's top 400. The rich in 1955 paid far more of their income in taxes than today's rich. In 2008, the new IRS data show, the top 400 paid only 18.1 percent of their total incomes in federal income tax. The top 400 in 1955 paid 51.2 percent of their total incomes in tax.
The bottom line: 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.
We can do the same.
Sam Pizzigati, a veteran labor journalist, edits Too Much, the Institute for Policy Studies weekly newsletter on excess and inequality. To keep updated on the growing pushback against that inequality, sign up to receive Too Much in your email inbox and check Inequality.Org for more background on the groups working to narrow the economic gaps that divide us.
Sam Pizzigati, a veteran labor journalist, edits Too Much, the Institute for Policy Studies weekly newsletter on excess and inequality. To keep updated on the growing pushback against that inequality, sign up to receive Too Much in your email inbox and check Inequality.Org for more background on the groups working to narrow the economic gaps that divide us.
Exclusively in the New Print Issue of CounterPunch
UNHOLY ALLIANCE
The Press, NATO and the Attack on Libya
The Press, NATO and the Attack on Libya
Has Libyan press coverage been worse than in the attacks on Yugoslavia and Iraq? In a special report, Alexander and Patrick Cockburn make the case. PLUS Stewart Lawrence on Alabama’s new racist law attacking immigrants; Richard Wilcox on censorship in Japan and the Fukushima cover-up; Mike Snedeker interviews Jan Haaken on domestic violence and feminism’s Pyrrhic victory. Subscribe now! If you find our site useful please: Click here to make a donation. CounterPunch books and t-shirts make great presents.
Recent Print Issues, Still Available for Purchase
How Tre Arrow Became America's
Most Wanted Green "Terrorist"
Most Wanted Green "Terrorist"
Jeffrey St Clair and Joshua Frank excavate the New War on Environmentalism. PLUS Sally Eberhardt dissects Federal Judge Cormac Carney’s sinister recent decision: the U.S. government can lie in court and won’t be charged with perjury. PLUS Asset management: Are breast implants and liposection a better bet than Prozac for jobless women? Mona Chollet explains why in this economic depression cosmetic surgery keeps on booming. Subscribe now! If you find our site useful please: Click here to make a donation. CounterPunch books and t-shirts make great presents.
Japan's Post-Nuclear Future
Takashi Hirose outlines in convincing detail how Japan can prosper without nuclear power. PLUS Andrew Cockburn dissects Donald Rumsfeld’s self-serving memoir PLUS Margot Patterson describes Syria close up.
Apocalypse Soon:
the Coming Earthquakes in Kabul
the Coming Earthquakes in Kabul
Patrick Cockburn reports on what politics and geology have in store for Afghanistan's capital and US "nation building." PLUS His eyewitness account of the stasis in Iran. PLUS Behind the Fukushima blackout: Richard Wilcox sends an update from Japan. PLUS Jean Bricmont on left fantasies about "humanitarian intervention."
The Sex Smears Against Julian Assange
What did Anna Ardin and Sofia Wilen really claim he did? Read Guy Rundle’s dissection of how the Guardian stitched up the man who gave them Wikileaks. PLUS Israel Shamir on Russia’s real political divisions, beyond the Putin/Medvedev burlesque peddled by the western press PLUS Larry Portis on the rise of Marine Le Pen. Is fascism looming in France?
"Follow the Money"
Why the US Defense Budget Soars,
Even as the Military Shrinks
Why the US Defense Budget Soars,
Even as the Military Shrinks
A brilliant, extended account by Andrew Cockburn of what, in terms of Pentagon spending, the Cold War was really about, and what has happened to military spending between the end of the Cold War and today. ALSO a marvelous report from Andrea Peacock on the battle over Badger-Two Medicine in Montana, sacred to the Blackfeet Indians and the target of oil companies.
Why the Entire Nuclear Industry is Insane,
Then, Now and Forever
Then, Now and Forever
Will Parrish on Obama’s boost for nukes WHILE Fukushima was in meltdown, and how US “Atoms for Peace” helped birth Japan’s nuke program; while back in US homeland “let them eat plutonium” mindset has maimed and killed for 70 years and will go on doing so till it’s stopped dead in its tracks
PLUS Shaukat Qadir on why Davis was in Pakistan in the first place PLUS Larry Portis on how much the French loathe Sarkozy. The Great Upsurge
Esam al-Amin and Vijay Prashad on the rebellions that have already changed the world. PLUS Shaukat Qadir on how the US hopes to quit Afghanistan. PLUS Andrew Levine on labor’s stand in Madison Wisconsin. Subscribe now! If you find our site useful please: Click here to make a donation. CounterPunch books and t-shirts make great presents. Order CounterPunch By Email For Only $35 a Year!
The Empire Trips Up
How “putting Israel first” led US into blindness about Egypt. Kathy Christison reviews Wiki-cables exclusive to CounterPunch PLUS Stan Cox on mass death on the high seas as shipping owners send seamen to their deaths in floating coffins PLUS Larry Portis on sociocide – a better term than genocide. Subscribe now! If you find our site useful please: Click here to make a donation. CounterPunch books and t-shirts make great presents. Order CounterPunch By Email For Only $35 a Year!
Wikileaks on Gaza
Read US State Department cables from the Wikileak trove, previously unpublished anywhere! They concern Israel’s onslaught on Gaza a year ago and the advice the US was giving Israelis on how to justify their war crimes. Kathy Christison guides us through these nauseating secret dispatches. Tunisia …Egypt … Alexander Cockburn on Tremors in the Empire; Carl Ginsburg on record U.S. corporate profits; Larry Portis on how a 93-year old Frenchman is rekindling the spirit of ’68. Subscribe now! If you find our site useful please: Click here to make a donation. CounterPunch books and t-shirts make great presents. Order CounterPunch By Email For Only $35 a Year!
"Ending US-Sponsored Torture Forever"
Joann Wypijewski reports on the growth of the U.S. torture archipelago and on the church-led campaign led by the National Religious Campaign Against Torture (NRCAT) which is striking a spark amid the darkness. Also in this latest newsletter, Diana Johnstone explores the one of the sinister monuments of the Clinton years: Kosovo, whose gangster premier runs a criminal enterprise which has murdered Serbian prisoners in order to sell their vital organs on the world market. Subscribe now! If you find our site useful please: Click here to make a donation. CounterPunch books and t-shirts make great presents. Order CounterPunch By Email For Only $35 a Year!
Recent Print Issues, Still Available for Purchase
Is the Next Great Awakening at Hand?
The First Great Awakening led after many years to the American and Jeffersonian Revolutions.
The Second Great Awakening led, after many years, to the Civil War and Abolition.
The Third Great Awakening led, after setbacks, to the Populist and then Progressive Movements.
The Fourth Great Awakening led to the New Deal
The Fifth Great Awakening led to the second Reconstruction, the Great Society, Feminism, and social upheavals.
Is The Sixth Great Awakening now due? What quarter will it come from? Read Mason Gaffney’s extraordinary history and predictions.
The Hidden History of Animal Resistance
Don’t miss Jeffrey St Clair’s riveting account of how animals fight back against cruelty and exploitation. This is history written from the end of the bear’s chain, from inside the tiger’s cage, from the depths of the orca tank. Read too the forgotten sagas of medieval animal trials, where non-human species were given rights, their consciousness acknowledged. Also in this exciting new newsletter, Larry Portis on why Sarkozy is getting away with it.
NICE…. ^_^v…..
ReplyDelete.. :) :) :) :) :) :) :) :) :) :) :) :) :) :) :) ..