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TODAY’S SCHEME OF THINGS IN AMERICA

January 20, 2012

TODAY’S SCHEME OF THINGS IN AMERICA

Ideology and propaganda aside, it must be clear to any thoughtful citizen that with the demise of the middle class we are now divided into a poor and a rich class and headed to a Central American fate. It is equally clear that we have brought it on ourselves by allowing a number of things to happen that are detrimental to our economic health, one of which is the rigging of the Internal Revenue Code to favor the rich and corporate class. In short, the result of such finangling amounts to governmental socialism for the rich and corporate class, and an increasingly brutal form of capitalism for the poor.

Evidence? There is much; I will cite a few examples. Congress in its wisdom has decided that “investment income” (of which the poor have little or none) should be treated differently from ordinary income (the kind poor people have – when they have a job). The upper tax limit on investment income is 15%; the limit on the income of the poor is more than twice that. The poor, in other words, are paying a tax rate over twice what the rich are paying as measured by investment income versus wages. How fair is that? Warren Buffet is properly ashamed of such a low tax on his own investment income, stating that he pays a lesser rate of tax on such income than his secretary pays on her salary. I say that income is income, whatever and wherever sourced, whether from investment or labor, but the Congress does not agree. I say that income from offshore sources by American-based multinational corporations should be reported and the appropriate taxes paid on such profits in the fiscal year earned. The Congress disagrees, and even allows such multinationals to stack up such income from foreign sources in the Caymans and other tax-dodging venues to negotiate a better rate with the IRS pending “repatriation” of such profits. If a poor person sought to negotiate a better tax rate on his/her wages with the IRS and (as American-based multinational corporations routinely do) refused to pay until a rate was agreed upon, he/she would wind up in a federal brig forthwith.

The rich and corporate class, who are always and forever complaining about socialism, are themselves the beneficiaries of government socialism. The poor are the victims of such government socialism because they have to make up what the rich and corporate class is not paying in one way or another, and if there is not enough revenue to the government (state, local, federal), then the poor must endure cuts in education, health care and other basics of everyday living even while paying taxes at a rate more than twice as much as those paid by the rich and corporate class (who are relatively unaffected by such cuts). As I have blogged before, we need to take a serious look at redoing the Internal Revenue Code. It is lopsided in favor of the rich as presently written and needs redoing not only on grounds of equity but also as a means of facing our budgetary and long term deficits.  Laissez faire it? Welcome to Honduras! Gerald E

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