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Phil's Liberal Rant of the Week - Taxes!

One last try to see if we can get through to Flips:

Corporate taxes are NOT a mechanism that discourages corporations from earning money. They are there to ENCOURAGE corporations to spend money. If a corporation makes profits and does not distribute them, then we have the same problem of pooling capital as we do with the top 0.01% – money is taken out of circulation and becomes unavailable to the economy. A corporation can pay out their income in salaries, they can pay dividends (REITs show no profits at all yet, strangely, people like to invest in them, blowing your entire theory), they can even invest in R&D or capital spending – all things that put money BACK into the economy and give other people a chance to earn some of it.

Taxes are meant to address imbalances in the system – our lack of adequate taxation has thrown our society’s imbalances back to – well, I would say the stone age but even in the stone age things were more equally distributed because everyone shared food and shelter and medical care. No, we have thrown our society back to the 1920s, when the term Robber Barron was created – combining the worst aspects of Capitalism and Entitlement to describe those who would charge outrageous rates for vital goods or services, using their monopoly power to extract money from the powerless users of those services.

It’s funny how when the Government wants to charge you money for a road or a bridge or a dam or the center for disease control you scream and call it a tax but when a utility company or commodity producer charges people higher prices that take money out of their pockets in order to create ever higher margins for themselves – that you call a fair profit. You are right, everyone is taxed – either by your beloved corporations who funnel that money up to the top 0.01% to buy yachts, private jets and much, much more land than you can ever dream of owning or by the government who, perhaps inefficiently, use that money to run our country as best they can.

If you want to cut government waste – I’m 100% behind it but I’m not going to get behind cutting government itself, just so more people can be left to your corporate wolves – it’s not the America I want to live in, that’s all and the people who do live in this country, INCLUDING THE CORPORATE CITIZENS, need to start paying their fair share.

Now, what is a fair share? Let’s say you are comfortable that a family making $30,000 a year is not poor and can happily live their life without government assistance. They can afford to have babies, raise the children through the normal childhood illnesses (and the occasional abnormal ones) and they can send them to school and buy them clothes the children will be proud to wear and feed them nutritious meals and send them off to college and then the parents will be able to continue working until 65 or 70 if they are not lazy and then retire without any outside support and, of course, pay for any illnesses or medical procedures they may have in 140 years of combined life.

Well, if you don’t think they need any assistance then $30,000 is ENOUGH to live on. That means that we can say a person making $60,000 is successful and a person making $90,000 is very successful and $120,000, $150,000,.$180,000 – well, those guys are REALLY successful then aren’t they?

If a person making $150,000 a year pays 20% tax – that’s $30,000. Should we expect the person earning $30,000 a year to also pay $30,000? No, that would be silly, right because clearly a person making $30,000 can’t afford to pay as much tax as a person making $150,000.

Should then, a person who is making $30,000 pay $6,000? Clearly that $6,000 would greatly impact their ability to spend and save since there are certain fixed costs that are shared by both the man who works 40 hours a week in a retail store for $15 an hour and the man who sits at a desk all day in a bank making $75 an hour. They both work hard all day, they both need a chair to sit in when they go home and a room for the chair and they both need to keep the room warm and they both need food to eat and clothes to wear (or do you have a secret desire to be served by naked men when you go shopping?).

So let’s take a stretch and assume there is a valid premise that there are some basic costs that must be met by all men to live. Now, does the man who sells you a toaster oven at Best Buy have the right to live in a home? Does he have the right to eat? Does he have the right to get married or have children – feel free to stop me wherever I go to far in humanizing him…

If you are kind enough to allow the serving class those rights, then what? Do we educate their children? Do we make sure they have adequate nutrition or shall we pretend that that is not important in developing a competitive mind and body? Is it OK for them to dress in rags if they can’t afford new clothes every time they get bigger? We spend so much money telling people what failures they are if they don’t look good and dress well, I’m just concerned it MIGHT send a mixed message to these kids if they happen to watch TV and see all the things they clearly can’t afford, knowing no one cares enough to help them – least of all their own Government.

Is it then so grossly unfair if perhaps we say to the man earning $30,000 that we can do without his $6,000, so he can somewhat provide for his family and we say to the man earning $150,000 that he can pay 24% of his wages in taxes to offset the taxes we would rather not put on the poorer families. That would still leave the $150,000 earner with $124,000 to spend on his food, clothing and shelter vs. the $30,000 the poor man has after they both work their 40 hour weeks.

The funny thing about the tax code we now have is that the man earning $30,000 pays 15% (if married) of his salary plus another 6.2% for SS and another 1.45% for Medicare for 22.65% ($6,795) while the man earning $150,000 pays 28% plus 6.2% on the first $102,600 only plus the 1.45% for Medicare, which is about 33.5% ($50,250) but the man or Corporation who earns $150,000,000 pays only 16% taxes or no taxes at all if they have a good accountant and even the man with $150,000 doesn’t pay $50,250 unless his accountant is a fool.

The $30,000 family, they can’t afford an accountant – certainly not if one of the kids doesn’t have perfect vision or perfect teeth – braces alone are more than they pay in taxes….

The more money people on the top have to spend, the more stuff they buy. Some would consider that a good thing (trickle down and all that) but what they are really doing is sucking up resources and bidding up the price that everyone else has to pay.

If I make $1Bn a year and I decide that my home will have a fizzy swimming pool with a Coca-Cola waterfall that uses a million gallons a day and drives up the national price of Coke by a nickel for everyone else – who am I benefiting other than the Coca-Cola company, who know they can charge more for their product because the demand from the rich idiots with a Coca-Cola waterfall is inelastic.

That’s what the demand is like from people who drive Hummers and limos, or live in homes that cost more money to heat than other people’s entire mortgages or take 1,000 acres of good farmland and build private golf courses or fly place to in jets for one or two that use as much fuel as 100 regular passengers all going to the same place. Actually, the higher use of private jets leads to a lower demand for first-class seats, which is where the airlines used to make most of their money to offset cheaper fairs in coach – now the coach passengers pay far more because the rich can’t be bothered to fly with them any more….

As I said – imbalances that either are redressed or simply become greater and greater imbalances until, finally, the poor people come to realize that a rich man’s skull can be crushed with a poor man’s rock and that the only way to stop them from consuming all of society’s resources, including the money (after exhausting all legislative possibilities through the Government that only serves the rich) is to physically stop them. That’s how revolutions begin.

There needs to be a concept of enough and a concept of too much. The Conservatives clearly understand enough as they feel a family living on $30,000 a year is not poor and needs no assistance and, in fact, can have $7,000 taken from them in taxes because, really, $30,000 to spend, $23,000 – what’s the difference – just the choice between the sport package with leather seats or the basic model, right?

I have no problem with what we have for people AND corporations who are under $250,000 a year in income, which is about where you begin to have some real extra money but at $500,000, we are beginning to get into a realm where paying an extra 10% will not impact our lifestyle nor would 20% more over $1M or 30% more over $5M. But 40% of the money in this country is made by people and corporations who make over $5M a year and 30% of that is 12% of the income and that money – even if you don’t use it to reduce the debt – is enough money to let the people and corporations who earn less than $5M pay 20% LESS taxes.

Who needs it more?

Don’t forget, a guy who makes $5M a year is making $100,000 a week. If he’s upset about not having enough money, he can skip a week’s vacation and pick up another $100K or, like the government, he could cut out some wasteful spending from the family budget. A person who makes $15 an hour (60% of the people you see every day outside of an office building) has to work an extra three weeks (90 hours = $1,200) just to pay for the average cost of books in college for one of his children for one year (assuming they had perfect teeth and perfect vision and never got sick or had an accident).

Can you really look in a mirror and say that this is still a land of equal opportunity with a straight face?