As most of the Republican candidates turn their inherently mean, greedy, and compassionless natures against each other during the debates, in what has become a free-for-all circus of incompetence, demonization of poor people, and back-biting, they have managed to bring the issue of tax fairness into America's living rooms. Mitt Romney has become the poster boy for how fabulously wealthy people can end up paying a lower tax rate than ordinary working people. Mitt Romney, who even though he tells us he does his own laundry, does have an estimated wealth of $190 to $250 million, and paid only about 13.9% in taxes, i.e. $3 million, on $21.7 million of unearned income in 2010. (Unearned--they got that adjective right, because the easier the work, the more you make) At least he pays more than nothing, as is the case with many corporations. His tax rate for the 2011 tax year is estimated to come in around 15.4%. The reason offered for why his rate is so low is due to the fact that most of his income is from investments (long-term capital gains), which are taxed at a 15% rate. The average person pays above 15%, some much more, when payroll taxes for medicare and Social Security are included. Newt Gingrich says he paid almost $1 million, or about 30%, on his 2010 income of roughly $3.1 million. Perhaps it is worth noting that in 1961, an individual making $200,000 or over, and a couple making $400,000 or over had a tax rate of 91%, which, even when adjusted for inflation ($200,000 in 1961=$1,504,608.70 in 2011), would still include both Romney and Gingrich.
The long-term capital gains tax rate is currently as low as it has been for at least the last 50 years. Until the George W. Bush administration, when it was lowered to 15%, it has ranged from a high around 40% to a low of 20%, and for most of the years before W, it was at, or most often above, 25%.
It is difficult however, for Newtie to criticize Romney or even to capitalize on what many people see as inherent unfairness in the tax code, because Gingrich has a 15% flat tax plan, which he now calls the Mitt Romney flat tax, and which would eliminate taxes on capital gains entirely, while cutting his own taxes in half. Then Newt will be able to keep $2.6million instead of a paltry $2.1 million on a $3.1 million income derived from influence peddling and speech making, and Mitt would pay almost nothing as a corporate raider/restructurer. Under Newtie's plan, the corporate rate would fall from its current 35% to only 12.5%, lower that the individual's flat 15%, and both corporations and the rich would reap large tax savings, while tax revenues tumble into the abyss. Fabulous ideas? Are we going to saddle the resurgence of the American Dream on the backs of the vast majority who are already seeing their share of the dream continuously shrink towards desperation? I read tonight that Obama said in his SOTU that he wants a tax plan where people making a $million or more pay at least a 30% rate, which is definitely a move in the right direction.
Romney responds to any criticism of capitalist inequality or thoughts of increasing the low tax load of the rich as "the politics of envy" and "class warfare," as if there couldn't possibly be an objective, fact based, critical analysis and thoughtful evaluation of tax fairness and our growing inequalities in wealth and opportunity between the rich, the middle class, and the poor. No, he and his class would have us believe that it's not the politics of fairness and justice, it's only "envy." He, and many Republican leaders, would have us believe that "class warfare" isn't by the rich on the poor, and isn't about the growing inequality and the increasing wealth and power of the rich at the expense of the poor and middle class, but that somehow, in the face of the facts, the poor are waging war against the rich! If he thinks that listening to poor and middle class people criticizing and protesting against outrageous inequality, in a peaceful, democratic fashion is warfare, then what would he call a situation where the poor actually decided to stand up and fight?
Partly in the hope of avoiding that eventuality, some folks are turning their skills to documentary film making so as to clearly explain the situation to Americans, in the hope that once armed with the facts, they will be able to bring change through the ballot box, even in the face of the Citizen's United ruling which grants corporations and unions unlimited campaign spending.
Below are two video variations on the same theme: We're Not Broke (We're just not taxing the rich and corporations enough, like we used to when all Americans mattered!) These are followed up by an informative Democracy Now! article on the Sundance Film Festival documentary "We're Not Broke," and a blog article by Robert Reich on the effects of globalization and "a Government Overwhelmed by Corporate money."
We're Not Broke (Documentary at Sundance Film Festival)
From Synopsis in Sundance Film Festival Film Guide:
"With the United States in the grip of the worst economic recession since the Great Depression and an unprecedented budget deficit, the conclusion that our country is broke seems unquestionable. At least that's what politicians and pundits want ordinary citizens to believe as they call for massive spending cuts. Karin Hayes and Victoria Bruce's searing exposé reveals that, strangely absent from this rhetoric, is the infuriating fact that multibillion-dollar corporations are based in the U.S., make money from American consumers, and often even receive lucrative contracts from the government, yet pay nothing in U.S. income taxes. By exploiting tax-law loopholes and spending millions on lobbyists to pressure politicians to protect their interests, corporations pocket billions while the less-connected middle class disappears, and the poor get poorer. . . . ."
Watch a short clip on Prescreen:
As Romney Releases Tax Returns, Fmr Senate Investigator Says: We’ve Got To Start Taxing Corporations
During the GOP primary, Mitt Romney has come under fierce attack for parking millions of dollars of his personal wealth in investment funds set up in the Cayman Islands, a notorious Caribbean tax haven. We speak with Tax Justice Network USA chair Jack Blum, a former top congressional investigator of financial crimes, who says tax evasion could seriously cripple the already struggling economy. Blum appears in "We’re Not Broke," a documentary that premiered at the Sundance Film Festival. The film examines widespread corporate tax evasion in the United States and the increasing role of offshore tax havens. "Has [Romney] cheated? No," Blum says. "What he’s done is take full advantage of a system that has been structured the way it is because of political influence and a tremendous amount of lobbying money on Capitol Hill... We must not only rewrite the Internal Revenue Code, but we must get a fair contribution from the very wealthy and from corporations, and that is the only way to balance the budget."[Link added] [Read rush transcript]
We're Not Broke, Just Twisted: Extreme Wealth Inequality in America
Go To inequality.org
The State of Our Disunion: A Globalizing Private Sector, A Government Overwhelmed by Corporate Money
MONDAY, JANUARY 23, 2012
. . . .
An Apple executive says “We don’t have an obligation to solve America’s problems. Our only obligation is making the best product possible.” He might have added “and showing a big enough profits to continually increase our share price.”
. . . .
What they want in America is lower corporate taxes, less regulation, and fewer unionized workers. But none of these will bring good jobs to America. These steps may lower the costs of production here, but global companies can always find even lower costs abroad.
. . . .
Put simply, American workers are hobbled by deteriorating schools, unaffordable college tuitions, decaying infrastructure, and declining basic R&D. All of this is putting us on a glide path toward even lousier jobs and lower wages.
Get it? The strategic responsibility for making Americans more globally competitive can’t be centered in the private sector because the private sector is rapidly going global, and it’s designed to make profits rather than good jobs. The core responsibility has to be in government because government is supposed to be looking out for the public, and investing in public schools, colleges, infrastructure, and basic R&D.
But here’s the political problem. American firms have huge clout in Washington. They maintain legions of lobbyists and are pouring boatloads of money into political campaigns. After the Supreme Court’s Citizen’s United decision, there’s no limit.
Who represents the American workforce? Organized labor represents fewer than 7 percent of private-sector workers and has all it can do to protect a dwindling number of unionized jobs.
Republicans like it this way, and for three decades have been trying to convince average working Americans government is their enemy. Yet corporate America isn’t their friend. Without bold government action on behalf of our workforce, good American jobs will continue to disappear.
Robert Reich is Chancellor's Professor of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. He has written thirteen books, including The Work of Nations, Locked in the Cabinet, Supercapitalism, and his most recent book, Aftershock. His "Marketplace" commentaries can be found on publicradio.com and iTunes. He is also Common Cause's board chairman.
Income inequality: Theme of 2012
By Marshall McComb
LTE, Baker City Herald
Baker City, Oregon
. . . .
But the inequality issue is not going away. Despite Republicans’ avoidance of this issue or their decrying it as “class warfare,” most of us realize that we have become a society more unequal than at any time since the 1920s. Automation, globalization, union-busting, and legalized financial abuse have drained middle-class purchasing power and stymied upward mobility. Health care and public education are in critical decline. Most of us have been left behind, while Romney and his cohorts pursue a never-ending quest for more money ... and the political power to cut their taxes even further. . . . .
Iris Dement Wasteland Of The Free