Friday, April 15, 2005

Tax winners, debt slaves

Robert Kuttner, "The Biggest Tax Cheats":

The Internal Revenue Service recently released a report estimating that taxes owed but not collected in 2001 (the last year studied) ranged from $312 billion to $353 billion. That didn't even count much of the tax evasion by US firms offshore.

The IRS isn't talking about students or moms and dads working as waiters and waitresses hiding tips, writes Molly Ivins. Hiding tips because your boss pays you $2.35 an hour accounts for just five percent of the total.

No, the real deadbeats are those who report "business income." They steal $100 billion a year from the military, police, schools, medical research, and care for the ill and infirm.

"That would cover the cost of Medicare and the war in Iraq, with change left over," said Ivins.

What's the Bush administration doing about it? The IRS enforcement budget is a third of what it was during the Clinton administration.

Oh yeah...that was when we had budget surpluses and the outlook for the future of America looked bright. Maybe our impoverished children will one day celebrate the 90's as the "good old days."

Then there's the agreement negotiated with other nations by Clinton, but siderailed by Bush, to catch tax cheats who have moved as much as $11 trillion to offshore banks. The Bush administration saw the need for such an agreement for terrorists, but not for his friends at KBR and Halliburton.

No, there are too many "privacy concerns" to allow the government access to the financial records of wealthy deadbeats. The Bush administration is proving that it doesn't have the stomach to make criminals out of his tax cheat friends for financial transactions that they claim are just "technical violations."

Meanwhile, people who made $1 million last year were given tax cuts averaging $123,600, and if Bush and the Republican Congress have their way, the wealthiest 1 percent of Americans will get another $1 trillion if tax cuts are made permanent. If that happens, for the first time since the popular progressive backlash against robber-barons led to reforms of the tax code in 1913, middle-class taxpayers will actually contribute more to the treasury than millionaires and billionaires.

The next tax cut for the wealthy coming down the pike is elimination of the estate tax. The Republican House bill passed on Thursday. It's up to the Senate now to kill the legislation.

Elimination of the estate tax will only reinforce the already overwhelming advantage of wealthy Americans. "It's better to be poor in Norway than in the US," wrote David Francis for the Christian Science Monitor:
In a list of 30 prosperous nations, including smaller economies such as Taiwan and Israel, only Russia and Mexico have a greater maldistribution of income than the US.

...well-to-do American families, far ahead of most prosperous families in the other nations, can provide their children with all the benefits their good incomes can provide - nutritious food, computer courses, travel, expensive universities, etc. They get a degree, develop a good career, find a suitable educated marriage partner, and have probably one or two kids.

These advantages can put them well ahead in life - reinforcing what some observers see as a growing class structure in the US as the income distribution has worsened in recent decades.

In its defense, Bill Gates said the estate tax "is a fair payback to society for the opportunity to do business in our marvelous economy and society."

Echoing Gates' sentiment, thousands of wealthy Americans recognize their responsibility to fellow Americans, and the vital role they play in keeping America strong by returning a small percentage of their wealth back to society.

A member of Responsible Wealth, millionaire Heleny Cook says "Tax Me More":
This Tax Day, I'm telling Congress to stop giving me tax breaks. I'm wealthy. I don't need them, and they're bad for our country.

As a teacher, I can't look my students in the eye and tell them millionaires should get tax cuts while schools and libraries are hit with budget cuts.

As a citizen, I can't face a military family and tell them they should sacrifice while millionaires get tax breaks.

The budgets passed by the House and Senate deserve an F for economics and ethics.

It's irresponsible to dig our nation deeper into debt to give tax breaks to millionaires.

It's immoral to cut health care and child care to give tax cuts to millionaires.

Our government is not fulfilling the promise of equal opportunity for children, it is undoing it.

Households with incomes above $1 million got tax cuts averaging $123,600 last year. That tax break could cover the pay of three teachers.

Tax cuts for the wealthiest 1 percent will cost more than $1 trillion over the next ten years if they are made permanent.

That translates into $300 million a day less for education and public health and safety. It means $300 million a day less for clean water, clean air and renewable energy, $300 million a day less to invest in research, job training and small business development.

Federal tax revenues have fallen to their lowest level as a share of the economy since the 1950s. Medicare and Medicaid didn't even exist in the 1950s.

We can't build 21st century education and healthcare on a 1950s tax base.

That's right. Sophomoric metaphors aside, Thomas Friedman criticizes Bush for "unilaterally disarming" American economic competitiveness by shortshrifting investment in research and education, "cutting the Pentagon's budget for basic science and technology research by 20 percent next year - after President Bush and the Republican Congress already slashed the 2005 budget of the National Science Foundation by $100 million." Since Bush took office in 2001, Japan, South Korea, and China passed the United States in broadband internet usage.

The United States is going from building a bridge to the 21st century during the Clinton era, to reverting into a pre-industrial economy and society during the Bush era. There exists a broad index of measures on how the United States is falling behind in scientific research--a topic I'll have to return to after I dig out some clipped articles.

And speaking of cheating the middle class while handing out special favors to the wealthy, has anyone noticed the blackout in broadcast news of criticism of the bankruptcy bill headed to the BushCo desk for signing. Oh yeah, they all quote Bush's praise for the legislation, but no one wants to mention that among families filing for bankruptcy, 50 percent suffered disastrous medical expenses, and three-quarters of them did what they were supposed to--they had health insurance. Another 40 percent of bankruptcies were caused by the loss of an adult income in households through death (including casualties from wars in Iraq and Afghanistan), divorce, or job loss, according to David Swanson.

There's no mention that most people have already fought to the very end to pay their obligations to creditors (i.e., banks, HMO's, doctors, pharmaceutical and insurance companies). Over sixty percent skipped getting medical care they needed but couldn't afford, fifty percent didn't fill their prescriptions, a third had their utilities shut off, twenty percent went without food, and seven percent moved their parents to cheaper care facilities.

No, the corporate broadcast media, controlled by the corporate elite, doesn't want you to know that federal lawmakers refused to close the "asset protection trust" loophole used by millionaires and billionaires to shelter mansions and other assets from creditors in bankruptcy. Those same lawmakers weakened protections that protect the family homes of ordinary people from creditors during bankruptcy.

And by the way, 142 House Democrats received an average campaign contribution of $7,884 from the credit card industry in the 2004 election cycle. 73 of them voted for the legislation, including New Orleans' slumlord, Bill Jefferson.

Meanwhile, the credit card companies who fought for years to get the bankruptcy bill passed are having such a tough time that they only profited $30 billion last year. That's right, you'd be correct in thinking that they take this money as part of the risk premium collected in higher interest rates, but when they hand out cards like candy, they want the government to crack down on debtors. I guess responsibility is something only the poor and middle class have to learn.

Imagine doing everything you're supposed to do to protect yourself from financial disaster. Insurance companies make their billions on your premiums, and then, when you get sick, you and your family are thrown out on the street. There's little hope then of saving for your retirement in a private account, is there?

Bush and co. are destroying the planet, destroying America, and turning us all into debt slaves. Can there be any doubt about the agenda?

Capital knows no borders, pays respect to no allegiance, owes no loyalty to any community. We are witnessing nothing less than the dismantling of the United States system as it has existed for the last 200 plus years--or maybe just its logical end. I seriously doubt Bush understands this. He's too dumb and too incurious. He's just a piehole for a conspiracy of money and power.

You may as well just get yourself a gun and a plot of land. That's just about all that will be left to live off of in another twenty years.


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