There is a crap statistic that is often passed around on the right about taxes, summed up in this headline form Heritage Foundation: “The Top 10 Percent of Income Earners Paid 71 Percent of Federal Income Tax.”
I am always tickled by this meme, because at the same time, when the Right isn’t thundering about taxes, they will also crow about the benefits of the American economy in the age of freemarket globalisation – among which is the enormous increase in wealth of the top ten percent. Or, as the right likes to put it, the normalization of the millionaire next door.
Put these two memes together and it becomes obvious that the wealthiest can pay 70 percent of the U.S. income tax without breaking a sweat. Their enormous engrossment of higher and higher percentages of the national wealth – the latest figures show that the top 1 percent control some 36 percent of the national wealth. This is a stat from the uber-right Wall Street Journal. Meanwhile, the bottom 90 percent hold an astonishingly small 25 percent of the national wealth.
These stats should be carved into the liberal mind with a power drill. Because – alas! – the liberal mind keeps thinking that the bottom 90 percent is going to have to pay more taxes for, well, something – Medicare, social security, our wonderful war machine.
The usually level headed Digby quotes with approval a journalist who is proposing a ‘left’ alternative to the Ryan budget to get rid of the deficit. Special gold stars for those who notice what is wrong with this proposal:
“An equally extreme proposal on the left would balance the budget, first, by raising new taxes--on everybody and, most likely, with particular levies on carbon.”
This is simply nutty.
Here’s what an equally extreme proposal on the left would look like: lets balance the budget by raising taxes on the richest ten percent alone. Let’s raise those taxes so that they pay 100 percent of the income tax in America. Let’s drop the federal income tax load to all individuals in the bottom 90 percent to approximately zero.
That’s right, zero.
This would not dent the lifestyles of the rich and the famous. They would still be as rich as fuck. However, if you wanted to do one thing to create instant wealth in households all across America, that one thing would be simply getting rid of the delusion that taxes are like church tithes. They aren’t. America doesn’t need the widow’s mite. America needs the hedgefunder’s billion.
I find it puzzling that liberals have not figured out that the shift in the composition of wealth in this country gives them an extremely popular issue. Instead, liberals think of themselves as the spinach party. I say no in thunder. I say desserts for the masses. I say let us eat cake. Why raise taxes on everybody? There is no reason that the household making 50 thousand dollars should pay a penny more in taxes at any level - their taxes should be heading downward. If we are really going to all "benefit" from globalisation, the simplest way to do so is to redefine what it means to be rich. To be rich should mean not only engrossing an absurd amount of the national wealth, but paying all the national taxes, save for FICA. Every bit. The right has inadvertently shown the way, here. We have merely to follow.
But how about the Galtian thesis. They might move? I'd love it. Then we could get into serious wealth taxes on the assets they have in the U.S. But in fact they aren’t going to go anywhere. Wealth, we are assured, is extremely sneaky peteily fast. But as we all observed in the crisis, when the crunch came, the rich had nowhere to hide. If it wasn’t for Uncle Sam loaning the banks their little dribs and drabs of billions (adding up to 9 trillion loaned at 0.07 interest between 2008 and 2010), the rich would be out there doing real work, cleaning plates and putting the white stripes down the center of roads. When taxes on millionaires were at 90 percent in the Eisenhower era, there's no evidence that millionaires were buffaloing it to Batista’s Cuba and Ireland. They will moan, they will groan, they will find loopholes. Others who want the millions (and realize that when tax time is over, they still have millions) will take their place. Social mobility, quoi? Survival is to the fittest, and we do want to breed the finest, Galt-ian wealthy. Over time, they will buy enough politicians to lower their rates once again, and we will have to revisit this. Such is history.
Taxing the rich isn't complicated. Let's do it under the slogan: ANOTHER 30 AND WE’RE DONE!