Monday, September 26, 2011

Is it Class Warfare or Welfare?

There has been rhetoric from those on the left lately about taxing the rich which has been countered by the right complaining about 50% of Americans not paying any taxes. Sorta reminds me of the college class called "how to lie with statistics" . . . or how to make your numbers tell your story. There seems to be a lot of that happening these days.

President Obama spoke to a crowd about his jobs program and the taxes he would like to use to pay for it and even said this is not class warfare -- it is math -- simple as that? Well, no, not quite. Our tax code was not written with the middle class in mind. The one deduction most families have is for their children. Homeowners can add the taxes and interest they pay on their homes and that is about it for most in Middle America. In 2005 more than 70% of all individuals filing used the short form, which meant they took the standard deductions. Businesses, corporate filers and wealthier taxpayers filed the more complex itemized forms. But did they pay their fair share? According to Forbes, regarding the top 25 companies in the US, apparently not. Much of the money from US Corporations is parked off shore in safer harbors and away from US tax liabilities. Huge earnings are offset by allowable losses and expenses in many cases. Profits made elsewhere are protected from US taxes.

Earnings from the big oil companies such as Exxon-Mobil exceeded $10 billion in the second quarter of this year driven by the increase in oil prices which were supposedly driven by the governmental instability in the Middle East and the banking issues in European markets. These price hikes directly affected the fragile economy in the US as companies, spending money for necessary fuel, continued to hold their cash tightly and not hire additional workers. It is said that the huge banking interests in New York are charging companies for cash deposits in excess of $50 Million, because they have chosen to keep the funds parked in money accounts, but not spend proceeds. Is there a moral responsibility from a corporation to give back to the city, state or country that made a business profitable? Should shareholders alone be the beneficiaries of corporate profits? Should profits be earned at all costs?

So when the average unemployment rate is around 9% and the economy is stagnant because consumers aren't buying and business aren't producing, why is there so much in the way of profits and excess cash in the system? Could it be that this is a psychological recession, are corporate interests still blowing on the economic soup to cool it down? States have less money because incomes and sales taxes are down. Businesses are selling less and paying part-time employees instead of full-time workers to save on benefits. More people are uninsured because the job no longer offers health care as an option. The Tea Party rails against those "feeding off the taxpayer" forgetting that the public workers have formed the backbone of our communities by fixing our streets, protecting our neighborhoods and teaching our children. They claim that "unreasonable pension payments" are bankrupting communities, forgetting that these employees often do not pay into social security if they have municipal benefits, so these modest savings will protect them in their later years. By not saving, funding or paying these earned and promised pensions, states and communities are breaking the promises made to these workers many years ago. Yet, some of these same right wingers would rail against unemployment benefits or food stamps to these same public workers.

Where is the collective outrage against the corporate welfare allowed for those 25 corporations and others which paid no US taxes, and who received a free ride? GE's tax return supposedly encompassed over 20,000 pages recently. Most US taxpayers could not afford to even buy that much paper, let alone afford the accountants and attorneys who came up with the numbers to fill those pages. Who elected Grover Norquist to dictate that corporations should not pay for the privilege of doing business? Where is the fairness in the system, when the IRS seldom questions the legality for offshoring of business assets? Why could there not be an excess profits tax, so Exxon-Mobil would have to share some of the extra billions it makes? Why did Bush era Republicans allow tax benefits to companies for moving jobs to other countries? Why could we not hold down the gas profits which were not based on market costs? If the American worker can be assailed by measures outside his control, why can we not look at higher taxes for corporate earnings achieved outside the country? Why is actual welfare for needy families castigated by the right when corporate welfare is called good business?

Do you think the average American worker is treated fairly by the "system"? What would you do to improve our tax code? Should the rich pay a higher rate? Should hedge fund managers -- whose average earnings were over $1 Billion dollars -- be allowed to have their earnings taxed at the capital gains rate of 15%?
May I say that again -- individual earnings of over one billion dollars? When the average American earns less than $50,000? Somebody help me understand the reason for their tax breaks. Let me know what your thoughts are on taxes.

1 comment:

  1. Well, after all, they bought the politicians. Duh.


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