Julie Morse

Julie Morse
Location
New York, USA
Birthday
December 31

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Editor’s Pick
AUGUST 11, 2011 2:20AM

Taxing The Poor: How To Squeeze Blood From A Stone

Rate: 22 Flag
If you tax us, do we not bleed? As it turns out, not necessarily... America’s current situation has resulted in a lot of debating over our system of taxation. Most of us seem to agree that the government needs to stop spending so much, and that we need more tax revenue. Then, the divide begins.

The Republicans generally argue that 50% of Americans don’t pay any tax, and that this should change. They complain about the significant cost of entitlement spending and welfare, insist that these are the root of America’s financial troubles and demand reform.

The Democrats tend to argue that the wealthy have more, can afford to pay more, and don’t actually pay the standard rates. They say there are too many tax breaks for corporations, and that we need Social Security, Medicare and low-income assistance programs, because people count on them.

If we look at the facts, it’s not terribly difficult to determine which argument makes more sense.

According to the IRS, 1,479 millionaires/billionaires paid zero federal income tax in 2009.

Citizens for Tax Justice [CTJ] reports that from 2008-2010, 12 major U.S. corporations not only paid zero federal income tax--despite posting a combined $171 billion in profit and collecting a combined $62.4 billion in federal tax subsidies--but actually had a negative federal income tax balance of $2.5 billion. Far from paying the 35% corporate tax rate, even the most highly taxed corporation paid tax at only 14.2% over that time period--60% lower than the standard rate--and was taxed at a miniscule 0.4% rate in 2009-10. Had they been taxed at the standard corporate rate, total federal tax revenue would have added another 12%. The Government Accountability Office [GAO] reported that two-thirds of all large U.S. corporations and large corporations controlled by foreign entities operating in the U.S. paid zero federal income tax on $2.5 trillion in sales during 1995-2008.

The poorest 50% of Americans do pay tax, just not federal income tax. But they pay sales tax, gas tax, Social Security and Medicare tax, property tax, school tax, the plethora of taxes on landline and/or cell phone service, etc.…many, many taxes. The amount they pay in various taxes adds up to a much more significant portion of their income than the proportion of income a wealthy person pays in taxes.

There is a very good reason the federal government--an entity that is extremely fond of separating residents from their cash--does not require low-income people to pay federal income tax: they simply cannot afford to pay any more. When the family budget is already pared down to the bone, an increase in expenses means that something has to go; “luxury” items like cable and phone services first, but eventually eliminating things like electricity and running water, then maybe transportation [resulting in job loss, and therefore, income loss], and finally, shelter. Requiring them to pay federal income tax might well mean creating a very loud, very visible group of homeless, starving families, which would certainly affect America’s international image in a very negative way. It wouldn’t be hard to correlate the timing of a sharp increase in the utilization of welfare programs, homeless shelters and food banks/pantries to the time of imposition of the federal income tax upon these families--statistics that would not be ignored. And this results in additional expense for everyone, via additional welfare spending to cover the additional load, and that wouldn’t be ignored, either.

There is a logical solution, which would benefit the vast majority of Americans. Rather than just taxing the wealthy, why not share the increased tax burden with the entities responsible for maintaining many Americans at an income too low to tax, in a manner that allows us to tax that 50% as well? Almost every working citizen would be paying federal income tax, along with almost every wealthy person and almost every corporation. We would all share the burden.

Sharing the burden involves ending federal corporate subsidies, and most deductions. It involves ending tax breaks that solely benefit the wealthy. [As a bonus we could even eliminate tax breaks that solely benefit the working poor and middle class.] And it involves substantial reform of the minimum wage.

Truly sharing the tax burden in this way would require either the mandate of corporations to pay every adult employee a living wage, or the offering of substantial tax considerations to corporations that voluntarily do so. This would improve the financial situation of adult Americans who work hard but don't have high-paying positions to a level at which they don’t need government assistance and could reasonably be taxed. America gains substantial additional tax revenue, spending on entitlements and social programs could be slashed dramatically with no ill effect, the elimination of complex and expensive tax deductions and credits would allow us to set new, lower tax rates, and the expense is directly applied to those responsible for the situation in the first place: corporate employers and, indirectly, the wealthy, who enjoy the financial benefits of owning or holding stock in these corporations, and whose desire for increased dividends and financial worth greatly influences a decrease in corporate expenses--like payroll and benefits. Exceptions could be made for small businesses, possibly based on number of employees and annual profit.

For this plan to work, we'd need to first develop a new and accurate cost of living [CoL] measure, customizable to locale. Real, necessary and widely varying costs would be taken into account, such as the cost of transportation to work, the vast difference in housing and nutrition costs from area to area, property and school taxes, the cost of retirement, etc. This CoL could then be used to determine a Living Wage [LW] for each locale. The LW would include items our government tells us are necessary--like health insurance, retirement funds, and emergency savings that cover at least 3 months worth of expenses--and would be based on the location of one’s workplace.

Our government and its citizens need to face the facts. We can either ensure that corporations pay their adult employees enough to actually live on, or we can directly bear their burden by funding health insurance programs, retirement programs and low-income assistance programs. Corporations aren't hurting; the record profits they continue to post proves that. In essence, working class America is paying for those profits, not just via ridiculous tax breaks and subsidies, but also by funding these programs that are necessary because corporations aren't pulling their fair share of the load. We can all be a part of changing that, just by passing on the facts.

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Excellent post; excellent analysis. The Republicans and Conservatives seem to have this short-sightedness and single-mindedness about their ideology without doing any math to objectively prove that what they say is true. Trickle-down doesn't work; Reagonomics was not the be-all that people claim it was. As I've said elsewhere: if Sarah Palin or Michele Bachmann get into the White House, I'm moving to Mars.
i think you are ignoring the gorilla: "the citizens can't fix it."

there is no way for citizens to do anything in the federal government. in creating a basic law to defend the rule of 'men of property,' madison disenfranchised the people.

they may support this master or that, but they can not establish law or policy.
If you just take the word "tax" and do the math, the lower and middle classes are paying so much more proportionately...Federal income tax is small compared to the daily burdens of fuel, sales, communications, state, tolls, property, utilities...And so many more death-by-a-thousand-slashes everyday taxes.
I guess I dismissed you too easily when I commented on your last post. This is a very thorough and factual analysis of the reality of the situation. Glad to see this on the "front page" today.
Good arguments. Rated.

I just wrote a similar post, an historical essay, about how similar policies in the 1780s led to the French Revolution.
Sure, craft a well reasoned post based on "facts" - that will certainly make a difference.

Sorry, my low opinion of the general populous is showing. I certainly appreciate and applaud your efforts - and rated.

Unfortunately, we live in a world of sound bites - so can you paraphrase your post in a simple declarative sentence?

Thanks!
I appreciate your exposition of the facts and rated this. On the other hand, "our government and it's citizens" "needing" to do something that is truly equitable would suppose that "our" representatives get there by means other than those which are controlled by people who think "equitable" means their five member family lives in a 13,000 sq ft house and yours lives in a 1300 sq ft house.

They're both houses, right? I mean, everyone should be equally happy, they get to live in a house and so do you. You BOTH get a mortgage interest deduction. Never mind there's is just one of a number of deductions that are more money per year than you will earn in a lifetime... What's the complaint? I mean, they probably employ a lot of people in their business (although of course, to be “competitive” most of those people are in foreign countries now).

And just because the CEO's in other industrialized nations are paid a fraction of what American CEO's pay themselves, well, that must be because we work so much harder. Funny though, in my own life I've frequently observed in jobs that paid me a lot more (in a linear progression through the same industry) I actually worked less and schmoozed more. Oh, sure, I could call it “work”. A casual observer might have called it a “tax write-off lunch”.

Now, how much influence over how and whom is elected to be "our" representatives, do you think those five people have and how much do you think those in your house have? The recent SCOTUS ruling on what the corporation they control can contribute, may also have just a small part to play in that calculation. Then there's that small issue of what capacity to comprehend any of this people who have the ability to vote have.

If I come up with a soundbite that's suitably manipulative and undemanding, I'll contribute it, but those folks in the 13,000 sq ft house probably have a few more people working on those for them.

Amazingly enough, the most powerful ones which keep the very people who should support your position disfavoring it, is the fantasy that they too, will someday live in the 13,000 sq ft house and have to pay those taxes. I call it the incredibly well sold myth of "Amway America". But it's worked well for a long, long time now.
Thanks to all, though it was very nearly my FINAL post, as I choked on my dinner upon discovering it on the cover...

William, you're right that "trickle-down" economics don't work, at least in a capitalist society. I've touched on that in other posts, but maybe it's time for one of its own.

Linnnn, agreed, but the politicians and wealthy don't seem to understand that these are, indeed, taxes. In their world, the only thing that seems to count as a tax is the federal income tax, probably because it's the only one that amounts to enough money for them to get excited about.

Jeanette, thank you, and congrats on your cover today as well. =)

Rwoo5g, I'll have to check that out; any post that presents history in an interesting way is well worth a read.

Mr. Culture: How about, "Pay us before we rebel and dump all your products into a harbor somewhere!" Jeez, the sound bite days really suck.

Sam & al, that's why I write about the topics I do, because I feel that it's important to at least try to get the facts out there. People aren't going to ever push for change if they don't know how badly change is needed. My posts aren't going to do anything in a big way, but it makes me feel like I'm contributing something to my countrymen. Besides, the truth can be contagious, especially when the mainstream explanations don't make much sense.
Wish someone in Washington would listen to you. And I'm with Mr. Belle--I'm moving to another planet if Bachmann or Palin become prez...which is starting to seem not all that far-fetched.
Being a cynic, I suspect that Palin and Bachmann are being pushed at us because the head honcho Repubs KNOW that they're too divisive and would lose the election if given the Repub nomination. I seriously doubt that the Repubs want to get rid of Obama, but they still have to appear as though they do. Obama has been so kind to the issues the Republicans hold dear, like caving on the Bush tax cuts, caving on the stimulus package [creating a too-expensive, ineffective, tax-cut-and-pork laden GOP present], caving on healthcare [dramatically increased profits for big private insurers, wrapped up in a bow], continuing old wars and beginning new ones [otherwise known as the "Yachts for Defense Contractors" program!], and continuing the steady erosion of our Constitution, U.S. law and the oath of office of the POTUS. Republicans are already getting what they would have with a Republican as POTUS; they have no reason to want Obama out, unless they're peeved about losing out on more of the campaign cash Obama gets from the same guys that contribute to them...
Thank you for this informative, reasoned and truly "fair and balanced" analysis.

I hope someone in a position of elected authoritu sees this fine piece.
You identified the problem - only 12 major corporations paid negative income taxes. When I'm elected, I'll make sure that all corporations pay negative income taxes. After all, I have compassion for people, and corporations are people. (People who aren't corporations? They're shit out of luck.)

I'm Mitt Romney and Corporate America approved this message.
Very astute analysis. You can't tax what people don't have. The wealthy are the people who need tax cuts the least in our current economic environment.
When you consider the folks against raising taxes on millionaires and billionaires, you discover something interesting: A lot of them are millionaires.

Mitch McConnell? He's worth $14 million without his six-figure Senate salary. Which makes a person wonder, "Why doesn't this man forego his Senate salary altogether if he's so concerned with the budget?

John Boehner, the one who adamantly refused to even compromise with the Democrats if tax-hikes for the wealthy were included in the deal, is worth approximately $3 million without his six-figure Congressional salary.

And look at multimillionaire Mitt Romney, a man who got rich as a corporate raider that threw people out of work, preaching values and morality--even when he claims that "corporations are people". Really? 67% of corporations doing business in the US pay little or no taxes. In fact, due to their lobbying power--an indulgence system quite similar to the Catholic system of indulgences which allowed people to forestall going to hell with just a minor contribution--corporations have millions of times more freedom of speech than either you or I.
When you consider the folks against raising taxes on millionaires and billionaires, you discover something interesting: A lot of them are millionaires.

Mitch McConnell? He's worth $14 million without his six-figure Senate salary. Which makes a person wonder, "Why doesn't this man forego his Senate salary altogether if he's so concerned with the budget?

John Boehner, the one who adamantly refused to even compromise with the Democrats if tax-hikes for the wealthy were included in the deal, is worth approximately $3 million without his six-figure Congressional salary.

And look at multimillionaire Mitt Romney, a man who got rich as a corporate raider that threw people out of work, preaching values and morality--even when he claims that "corporations are people". Really? 67% of corporations doing business in the US pay little or no taxes. In fact, due to their lobbying power--an indulgence system quite similar to the Catholic system of indulgences which allowed people to forestall going to hell with just a minor contribution--corporations have millions of times more freedom of speech than either you or I.
Great article. I do not understand why Democrats continually allow the Republicans to define this issue. There is always some spending that can be cut mostly duie to waste, fraud, and duplication. That results in some savings but not a lot. In actuality, we have a revenue problem. The Bush Tax Cuts of 2001 were the greatest shift of wealth from poor to rich we have ever seen. What did we get from it? We received huge deficits and an economic meltdown. Allow all of these tax cuts to expire and we will be half way to a balanced budget and we can save our social safety net from the Tea Party anarchists. Eliminate corporate tax breaks as you say and bring our troops home. Then institute your other ideas and this country will be in a booming recovery because the people who need to spend money will now have it. The recovery itself will then reduce spending on many of our social programs such as medicaid and unemployment insurance. Wonderful analysis Sickof stupid.
if only the very rich can afford to get elected then how do you expect any elected offical to undertand the plight of the poor and middle classses. Don't they all have cake to eat like the rich do?

the pesants are revolting! Of course they are the filthy slime!
It is straight downhill when the weak in society join together and want to destroy the successful. Sorry but rich people mostly did not inherit their wealth, they worked for it. They followed the tenants of the American dream by getting up in the morning and getting educated and working hard at everything they do. They planned their lives and they don't owe their efforts to anyone. 47% of Americans not pay everything to keep this country going. As that number gets smaller and smaller due to the welfare/nanny state attitude Liberals have, we will be Britain. There are producers and their are users; the users need to go to work and contribute to their keep.
I can't believe this got an EP.

"The poorest 50% of Americans do pay tax, just not federal income tax."
That's b/c they have no income. The unemployment rate that you see posted, such as 9.2% is only based on those people who are drawing unemployment benefits. It does NOT count people who have used up all their benefits and are still looking for work, or those who were fired and are now out of work, etc etc. It's a lot higher than what is reported and made publicly known.

"But they pay sales tax"
Well sortof. Foodstamps don't pay tax so there's one off the list. Medications, medical equipment, and health related expenses covered by Medicaid are not taxed either. Then as far as clothes and other goods most people consider normal expenses have been a scarce luxury for these people for a long time. So I am betting they were not texting on their non-existent cell phones while waiting in line at the mall to pay for back to school clothes, to the facebook account they don't have because the internet is an unaffordable luxury to them also.

"gas tax" - There is even govt assistance for gasoline.

"Social Security and Medicare tax"
If you don't have an income from a job, you don't pay these either.

"property tax"
lol! Are you kidding me? They prolly lost their house to foreclosure within the last 3 years. Unless they are newly poor. Then it will be within the next 2 - 3 yrs.

"The amount they pay in various taxes adds up to a much more significant portion of their income than the proportion of income a wealthy person pays in taxes. "
What is wealthy? An income of $120K back in 2006 paid federal income tax of $9K. I tend to think that's a lot. Double that plus 10 more and you are at around $20G in taxes. But since the rates have increased for this income bracket since then, it's even more. I'll leave it up to you if you think that's fair or not.

Now for the biggie. Corporate taxes. Take a drive through your town, then the capitol city of your state. Note how many vacant buildings and closed businesses you see. Many small businesses, but also quite a few larger ones as well. Possibly huge divisions of corporations have shut down like the Ford plant in Atlanta that employed thousands of people. Corporations are paying the higher taxes in all the things you said the poor are paying for, but with a realistic view of poverty, they actually are not. Corporations ARE paying higher phone tax, property tax, and GAS tax to transport their goods from warehouse to store, for example, ad valorem tax, plus they have to pay their employees. So lets say the government decides that corporations should pay more taxes, much more by most liberal opinions. What do you think will happen? Jobs will be cut. WHY? To make things simple, lets say that tax increase amounted to $500,000.00 the first year. That is the salary of 10 truck drivers who pick up and deliver the companies products. Because they are already operating at or just over cost, they have to let those 10 drivers go. The drivers are now down to half of what they used to be with the same amount of product needing to be delivered. The remaining drivers have to work twice as hard, maybe twice as long to meet quota.

Now I am curious how increasing unemployment, by choking out business, will improve the economy?

I think posts on poverty and wealth should be reserved for those people who have lived in both worlds.
"For this plan to work, we'd need to first develop a new and accurate cost of living [CoL] measure, customizable to locale. Real, necessary and widely varying costs would be taken into account, such as the cost of transportation to work, the vast difference in housing and nutrition costs from area to area, property and school taxes, the cost of retirement, etc. This CoL could then be used to determine a Living Wage [LW] for each locale.

******The LW would include items our government tells us are necessary--like health insurance, retirement funds, and emergency savings that cover at least 3 months worth of expenses--and would be based on the location of one’s workplace.***** "

Would you like the government to breathe for you as well? Have you read the preamble? The constitution? Do you know what freedom and the pursuit of happiness truly are? (they should never have stopped running those School House Rock videos on Saturday mornings...)

The solution is never simple. But reducing the size and therefore cost of the government itself, placing more power to the people as it was intended to be in this country, would be a big step in the right direction.
Thanks for reading, and thanks for all the comments.

Gordon, you're right about the millionaires/billionaires, but what scares me are the "regular" folk that feel the same way. Until they have the facts and believe them, we won't see significant change.

Thanks, Howard. I agree that we have a revenue problem, and that a good part of that is due to the Bush tax cuts. In fact, if we were to eliminate the Bush tax cuts for those making over $1 million, and cut defense spending by 50%, the total savings/revenue from these two items would be around $3.7 trillion over 10 years--close to the amount our government claims to be aiming for. And even if we cut defense spending in half, we would still be spending more than three times the amount any other nation spends on defense.
wshantz, absolutely correct, but fixing that would require substantial campaign finance reform, which doesn't have much real support amongst government officials. I feel that mandatory campaign finance is the way to go, so that lower-income candidates could play on the same level as the wealthy. Alternatively, mandate that at least one representative from each state have an income of less than $50K. I have too many ideas on this topic to include them all in a comment but I'll be posting a piece on this in future.
You raise some excellent points. Well written.
R
Ponte, I'm not sure who you're talking about. This particular post is targeting corporations, specifically the corporations that enjoy record profits as a result of failing to pay their employees a wage one could live on, collecting billions in government--taxpayer funded--subsidies, and not only failing to pay ANY federal income tax, but actually manage to collect millions of taxpayer dollars in tax REFUNDS. To me, this is unacceptable, and I have a difficult time understanding why it's acceptable to others. I promise to be openminded if you'd like to try to explain it to me.

I'm not saying the wealthy don't work, and I'm not saying they don't work hard, because some of them certainly do. But they do enjoy benefits that would not exist in other nations. Why do you suppose they're still here, if things are so bad? It's because it's as bad or worse in other nations. Opportunity costs, and like it or not, the opportunities they enjoy were paid for by taxpayers. It's now time for them, in turn, to cover the cost of opportunity for someone else.

I'd like to add that most of the people who receive some type of government assistance [and are not retired, sick or disabled] DO work. Cops, nurses, teachers, waitresses, cashiers, laborers and even young airline pilots are examples of people who may receive food stamps and daycare assistance, and even Medicaid, if they have a family and high medical bills. All of these jobs are demanding in some way. Would you argue that they don't deserve to make enough money to live on?

I think that the majority of Americans don't have an accurate picture of those who receive help from the government. Sure, some people on assistance are just plain lazy, and want a free ride. Unfortunately for them, there are laws regarding how long they can receive assistance; there are also requirements that they seek work, or work at a job site assigned to them in order to continue to be eligible for assistance. They are not good representatives of the average person receiving help. A better picture would be the single mother with 3 kids and no skills. The way welfare is set up right now, she has to work and put the kids in daycare, despite the fact that she will never get a job that pays enough to support her family without receiving job training. So, someone else raises her kids--probably part of the reason many kids today don't seem to know how to behave--while she works for minimum wage, and the taxpayers cover her more than $300/week daycare bill. Or the nurse, who makes a decent wage but can't afford to buy food for his family because the cost of his health insurance is so high. Or the airline pilot, whose starting salary is around $20K/year, but had to quit his first job with a particular airline and take a different one, because his first employer prohibited employees from seeking any type of assistance, out of fear that the public would react negatively. THESE people SHOULD be the face of government assistance, but the American public is led to believe that everyone getting help is a lazy, baby-making stoner crackhead.

To me, the REAL menance here are the wealthy elderly, who are now able to enjoy a free ride on nursng home costs, because they are now eligible for Medicaid. [**Please note: this is true in NYS; I'm not sure about other states.] The elimination of the asset test means that an elderly person with a million bucks or more in the bank, homes, cars and a healthy portfolio does not have to pay as much as a single cent towards their own nursing home bill. The best part is that a disabled person receiving SSD benefits who is not yet retirement age DOES have to pass an asset test. So, our tax dollars pay $5K/month or more for wealthy people to receive nursing care. Ain't that great?
apache savage, thanks for reading, and for your comments. I'm happy to address them.

I'm having a hard time believing that I earned an Editor's Pick, too. Many thanks to that individual for reading my work and finding value in it.

I agree with you that the real unemployment rate is much higher than the 9% or so the government reports, and that the underemployment rate is even higher. But even the real unemployment rate doesn't come close to approaching 50%. Most people on assistance that are not sick/elderly/disabled do work, and they do pay a wide variety of taxes. Even most of those who are not employed end up paying tax on something. We all need toilet paper, for example. I haven't heard of government assistance with gasoline in particular, but I cannot imagine that the gas would be exempt from taxes. Food purchased with food stamps isn't taxable because food isn't taxable [though certain items are; that tax is covered by food stamps, bottle deposits, for example]. And I can assure you that there are people receiving food stamps who still own their home--barely--and have to pay property tax if they want to keep it.

As for "what is wealthy", I consider "wealthy" to be people with an income of at least $1 million annually. To consider even those with an annual income of $250K "wealthy" is a joke, these days. They may have been once upon a time, but they're now "upper middle class". Welcome to the club, folks.

As for corporation, yep, they pay some of the same taxes the poor pay, and because they use more services, they pay more of these taxes. But the kicker is that they get to deduct these taxes as business expenses, and the poor/middle class do not. When we look at income versus taxes, the poor do pay a much greater percentage of their income in taxes than the wealthy corporations do. And corporations close plants because it's cheaper to pay some guy in India 3 bucks an hour than to contribute to the well being of their own nation by paying their employees a living wage. They are not operating at or below cost. What would be the point? They close American factories and outsource jobs overseas because doing so allows them to increase the already record profits they are posting. Oh, and it allows them to deduct all the taxes they pay to that nation from their U.S. tax bill. Hello, taxpayer-funded refund! Must be nice.

Small businesses probably ARE having trouble, but that's not who we're talking about here. We're talking about multi-million and multi-billion dollar companies who not only refuse to pay anything close to their fair share [or anything even approaching the standard corporate tax rate of 35%], but manipulate the tax code and ship cash overseas until they can demand a refund, which is paid for by the "regular folk" who actually paid money in.

I think posts on poverty and wealth should be reserved for everyone who enjoys the First Amendment right of free speech, and for anyone else who's willing to risk it. Censorship only results in the situation we have now.
apache savage, indeed I HAVE read, and understand, the preamble to our Constitution. The part that people seem to want to leave out reads, "...promote the general Welfare...". Basically, doing our best to ensure and improve the wellbeing of the American public.

There is a level of income under which one simply cannot survive. If that level, in some areas, is more than three times the amount of a full-time minimum wage job, what are people supposed to do? Working more than 120 hours per week isn't really an option, particularly when you consider the time it takes to commute to three different jobs and the number of hours of sleep one must have in order to avoid killing or severely maiming yourself or someone else.

I disagree with you. The solutions ARE simple. Politics is the only thing that makes all else complicated, and polititians depend on the wealthy to stay in office. So, money, greed and selfishness are all that stands between the American public and a system that works for everyone--including the wealthy. Mandatory public campaign financing and mandatory term limits--both quite simple--are all that are needed to spark real change that is reasonably beneficial to all citizens.
The problem is that tax expenditures (credits, deductions, exemptions) don't get counted as part of the budget. So, they get far less scrutiny than budget items, but damage the budget the same way.

We need to simplify the tax code and get rid of the millions of tax expenditures, before we monkey with rates.
Fine. When AT&T--with frost hanging off Satan's nutsack--pays their fair share, I will pay mine. Until then I will continue to be a "burden," and fuck you.
rate
Hey SOS, I'm on your side re the sentiment but don't quite agree with the remedy. If 50% aren't paying (income) tax, it's because most are too poor to reach the lowest tax bracket, or are so rich that they can hire tax accountants with clever sheltering methods. My own preferred tax measures would include:

Sharply higher tax brackets for the richest and elimination of lots of loopholes and deductions

A national sales tax like every other developed country). You'd exclude things like food (though not in restaraunts), kids' clothing and rent below a certain level and offset that with some form of tax credit for the poorest.

I'm not much concerned about corporate taxes. When they have profits, either they pay out dividends which are taxed, pay higher wages which are taxed, or invest more in their own business which is desirable.

It's important to note that the U.S. is NOT over-taxed in comparison to any developed economy. The tax "burden" is around 28% of GDP compared to the 34-50% range for Western Europe, most of eastern Europe, Canada and Australia plus several other countries. That gap of 6% GDP is far greater when you adjust for the vastly huge proportion that is spent on the military.
And let's not forget that much US military spending is done by way of specially earmarked debt sold to the Japanese, Saudis and Koreans.
Are you for real. Do you really think that anything like you propose could happen. If you make corporations give a "living wage" all you do is cause the economy to raise prices to compensate for everyone having more money. There is no such thing as a living wage. You really need to study economics and come up with some real ways to improve the economy.
after I read your comment to somebody else about how you don't believe Republicans really want to get Obama out of office, it dawned on me, the irony in your screen name.

That being said, I hardly find it worth replying to your comment back to me, but in a halfassed manner I guess I will pose the obvious question regarding the taxes corporations pay, as referenced - phone, electricity, gas, etc, as a business expense! OMG! Are you like totally serious??? Do you think maybe that might be because they ARE business expenses.

If a job doesn't pay jack shit, keep looking. Now THAT'S a simple solution for your living wage problem. Or either move to China - they already have your plans in practice (and if you happen to have more than one child, they will deliver it and then kill it). I lost my grand high dollar job long ago, and when all the other shit hit the fan, making jobs impossible to find, I sang for my damned supper and 7 years later we are still surviving. I run my own business, I DO work 126 hrs a week 7 days and no holidays and no vacations - not ever. No health care, obviously, but I freaking get by.

The biggest thing facing our government right now is debt.
The biggest thing facing the American people is jobs (lack of jobs)
Kill corporate America and you kill more jobs But if you put people back to work, more people are paying income taxes and those same people are now buying things they didn't buy before: income tax from more workers brings in revenue to the government to help pay a lot of that debt, purchases and taxes on those purchases grows our economic confidence.

Oh and uh, food IS taxed in a lot of states. Where are you? NJ? In my state, all food is taxed (except for foodstamps). In case you *are* in NJ, we have to pay taxes on our clothes here too.
Agreed, Malusinka. I doubt we'd have to do anything to the rates if we got rid of all the convoluted crap, and then maybe the IRS could stop picking on those of low income who can't afford good attorneys, and go after the REAL tax evaders again.

Thanks, Dr. Lee; much obliged. Love the imagery and the sentiment.
Abrawang, I mostly agree with you. I'm just of the impression that sharp tax increases for the wealthy sound really bad to the wealthy, who by virtue of their money control the media and most of the government. I'm trying to make the point that social program expenditures are only as expensive as they are because people don't make enough to live on, let alone retire on. A living wage would drastically decrease the amount we need to spend on "welfare" programs, because fewer people would need them, particularly Social Security, Medicare and Medicaid. Not that SS is the problem it's made out to be; see my post on Social Security myths here. But it must be one or the other. Either the taxpayers foot the bill directly, or we make the corporations who employ these people pay them a fair wage. We'd have to deal with cheap imports, but it really wouldn't be THAT difficult.

As for a national sales tax, I've been kicking that around, too. I think it's a great idea, except that it will hurt the people we're trying to help. A tax credit will help replace the money spent on this sales tax throughout the year, but it won't help these people pay their bills during the year, unless the landlord and utility companies are willing to accept an annual payment to make up the shortfall. When you're alternating the bills you pay each month so that you're always behind but nothing gets shut off, there really isn't any wiggle room, unfortunately. Maybe a swipeable tax exemption card could be worked in somewhere to address that; I'll think on it, and I'd love to see what you come up with.

The problem with corporations is that yes, dividends are taxed, but all money is taxed at some point. We can't really think of it that way, because we don't tax money, we tax the people that have it. All the money that you have was once owned by someone else. The corporation is supposed to pay tax on their profits, the shareholders are supposed to pay tax on their dividends, the employees are supposed to pay income tax, the merchants the money is spent with are taxed on THEIR profits, and their employees are taxed, and so on. It won't hurt corporations to pay more than they actually do, particularly when they pay nothing, or less than nothing, despite posting record profits and paying their employees right into government assistance. They generally don't increase wages, other than for those at the very top tier, who can afford tax lawyers of their own, and reinvestment in the business doesn't do much to benefit America if they are always going to be able to avoid paying tax. And that's what taxation is for; the nation is supposed to benefit from the use of these funds. But when we give tax refunds and subsidies to corporations that shouldn't be receiving them, we're basically stealing from the middle class and honest wealthy to give to the dishonest wealthy, and I cannot for the life of me see how that benefits the People or the nation.

Thanks again for reading and commenting; I enjoy the debate!
Makingsense, considering how any schools of economics exist, and how much they differ, I don't see how that would help anything.

I disagree that it's better for the wealthy to continue their enrichment via the middle class than allow the middle class to keep more of their own money, and I disagree that it's better to allow the corporations to get richer while the people who work for them become poorer. Besides, these people are already getting these funds. They're just financed by the taxpayer and come from the government. Paying a living wage just means that people would receive this money in their pay, as they should; they worked for it. And it means that the people ultimately responsible for the necessity of government assistance would finally be paying their own bills.

Do I think it could happen? Sure. A bunch of other stuff would have to happen first, but it could happen. And I think it would sell to the wealthy better than a straight "tax the rich", and would make more sense to the middle class, who have been conditioned to believe that entitlements and welfare are the reasons for the deficit. And it would certainly sell to the working poor.

Feel free to convince me otherwise; I'm genuinely interested in what EVERYONE has to say, not just those who agree with me.
apache savage, I often find that people resort to attacking others because they are unable to coherently counter the argument.

My apologies for not making my point crystal clear. Yes, corporations pay the same taxes individuals do, such as taxes on utility services. However, these taxes are then deducted as a business expense. Because they are deducted, it's as though they don't pay the tax at all, because they get to use that amount to reduce the amount of their federal [and possibly state] income tax bill. Because corporations are using those taxes to offset part of their tax bill, those taxes cannot logically be used to good advantage to argue that corporations pay more taxes as a proportion of income than the poor.

One cannot find a better-paying job if there are no better-paying jobs. One cannot even take on an additional job if there are no available jobs. Starting your own business is admirable, but it's not something that everyone can do, because not everyone has the knowledge or skill [or funding, for that matter] to do so. Your suggestion regarding China is interesting, but moving to China would likely prove somewhat difficult if one is trying to subsist on the income from a minimum-wage job or two.

There can be an enormous difference between a minimum wage that is referred to as a "living wage", and a true living wage, which would cover the expense of all basic needs in a specified area. China's gap between the stated "living wage" and the true living wage is substantial, just like there is an enormous gap between our federal minimum wage and the wage one actually needs to survive.

Incidentally, China's one-child policy was revised upon discovering that an excess of men and a decided lack of women for them to marry created widespread social issues [an explosion of the homosexual population and gang violence, for those interested] that China found to be rather undesirable. There are now several circumstances under which Chinese citizens can legally have a second child.

No one is suggesting "killing" corporate America, only that we end corporate welfare. American corporations are sitting on more than $3 trillion dollars. They aren't hiring, because they don't need to hire anyone, because no one has money to buy much of anything beyond the absolute necessities. Corporations do not hire people out of kindness. They hire people when the workload exceeds the capacity of the employees to perform it. Workload exceeds capacity when demand for the corporation's goods or services increases. Corporations ARE firing mid-level employees, and hiring entry-level when absolutely necessary. They are also posting record profits, and giving executives enormous bonuses. Making wealthy corporations pay their true fair share in some way, be it reform and enforcement of tax laws or a mandatory living wage, is not going to harm them.

Most of my posts regarding the state in any way are from the NYS perspective. My information indicates that groceries are exempt from tax in most states, including New York; are taxed at a greatly reduced rate in others, and six out of the nine states that tax food at the regular rate give income tax credits to the poor for taxed food purchases. Groceries in New Jersey appear to be exempt from general sales tax, with the exception of prepared food, candy and soft drinks.
apache savage, my reference for the groceries exemption in New Jersey: http://www.state.nj.us/treasury/taxation/pdf/ssutfood.pdf
Just want to take a moment to thank Kent Pitman, for inspiration and for his great tutorials on using HTML in comments! The tutorials are linked on the left side of his blog, for easy reference.
My information also indicates that clothing is exempt from general state sales tax in New Jersey. New York does charge sales tax on clothing over $55, and is scheduled to return to sales tax applicable to purchases over $110 in 2012. However, local sales taxes may still apply; that may also be the case in New Jersey.
It's like when you blame yourself for an abusive parent beating the shit out of you. Or yell at your sibling, "if you could have just done your chores, this wouldn't have happened." The blame is never placed on the abuser. It's not okay to abuse your family, just like it's not okay to grind the poor into the ground and make people work 120 hours a week, who then blame anyone and everyone but the source. Rated.
Thanks for reading/rating commenting, Joseph. You're right, it IS similar to abuser/abusee behavior; I've never thought about it like that before. But it makes sense to me, as I've known abused women who blamed themselves for the actions of the abuser. I hope it won't be as difficult to wake America up, but the cynic in me says it'll be at least as difficult, and likely more. The more people we have spreading the facts, the better chance we have of eventually achieving change; every person passing the word knocks another "brick" out of the wall.
Sales taxes almost always hit the poor harder than the rich. The rich can vacation in lower tax locales and do their shopping there. I've lived in Europe for nearly 20 years and do most of my clothes and electronics shopping in the US, where taxes are lower. When Canadian sales taxes were sky high, there were charter flights of Canadians going to shop in Freeport, ME. When I lived in England, I knew Brits who did a significant portion of their summer shopping while visiting Florida on Spring break. You have to be able to afford the Disney vacation to do that.

Technically, you are supposed to remit to the gov't taxes on the stuff you buy, but in practice, it is do rare that no state, local, or national gov't even bothers to make it easy. I've never known anyone who felt it was their patriotic duty to pay taxes that they could avoid.
Agreed, Malusinka. But we're all supposed to forget about the large percentage of income the poor pay in sales tax and other taxes, as if they don't count, as if income taxes are the only issue.
"Truly sharing the tax burden in this way would require either the mandate of corporations to pay every adult employee a living wage, or the offering of substantial tax considerations to corporations that voluntarily do so." - This pretty much sums up your world view that corporations exist entirely for the benefit of everyone else except themselves. It's exactly the opposite. Jobs and benefits are a necessary evil to do business. Businesses don't respond to politicians and just start hiring to create jobs. They also pay wages based on the lowest rates that the market will bear because wages are an expense just like inventory or capital. I mean, are you stupid or something? That is a serious question too. If you sold hotdogs or lemonade on a street stand, and depended on that income for a living, you would try to get by on your own until you absolutely needed to hire someone. Then, you would hire someone dependable, yet cheap. Why would a larger business like a corporation do any different? What's with this new movement in America to re-invent communism? That was proven wrong in the last century. I'm not conservative, by the way. I'm just confused with all this talk about holding corporations accountable for their bad behavior, which consists of making a profit. I mean, it's bad behavior for a business but not for individuals who go to work everyday and earn a living based what the market will bear to pay them.
Stu, thanks for reading.

I understand what you're saying, but you may have missed my point. I don't have a problem with businesses making money. What I have a problem with is businesses paying so little to their employees that the employees require government assistance programs to survive. This essentially socializes a large portion of corporate expenses, including wages, retirement, healthcare, etc., placing the burden on the taxpayers, rather than on the corporate employers who pay their employees less than they need to live, despite posting record profits.

I have an even bigger problem with these low-income workers then being humiliated--other then the humiliation they must feel just having to apply for assistance--and demonized by the government, the GOP and the MSM as the problem behind our government's out-of-control spending. I have a problem with these people being characterized as freeloaders who don't pay any tax, especially as so many wealthy individuals and corporations pay zero federal income tax on billions of dollars in profits.

So, what do we do? Is it fair for the corporations to pay their empoyees too little, and place the burden of paying for their most basic needs on every taxpayer? Is it fair for them to join in and complain that "50% of Americans don't pay any tax", when they don't pay their employees enough in wages to afford to or be required to pay federal income tax?

I think not.

Either we shift the burden of this expense back to the corporate employers, who can afford it, and who are responsible for every cent we spend on government assistance programs that provide critical help for the working poor, or we mandate that every large employer pay every employee a living wage, including healthcare and retirement, boosting these employees into an income level at which they could afford to pay tax, and would be required to pay tax, which would reduce the individual tax burden.

Either way, it's a win for America.