Wednesday, April 20, 2005

Fisking Ivins

This is one long article from Molly Ivins that I can summarize as one opinion: the tax code should be more progressive. From that follows the completely illogical conclusion that because it isn’t, rich people receive massive subsidies from the rest of us. She’s entitled to such an opinion, for sure, but to weave an article that pronounces such a simple opinion on fairness as if it is exposing some grand conspiracy is a little much.

Happy tax day, fellow citizens! My favorite authority on taxes is David Cay Johnston of The New York Times, who won a Pulitzer for reporting on the terminally unsexy topic of taxes. His book "Perfectly Legal -- The Covert Campaign to Rig Our Tax System to Benefit the Super-Rich -- and Cheat Everyone Else" is the single best work on public policy of recent years, I think. Johnston reports: "Through explicit policies, as well as tax laws never reported in the news, Congress now literally takes money from those making $30,000 to $500,000 per year and funnels it in subtle ways to the super-rich -- the top one-one hundredth of one percent of Americans.

The top one-one hundredth percent, generously assuming 200 million American taxpayers, is 20 thousand people. Here is an idea – let’s kill ‘em and this problem will go away. It’s not that many people after all. Expressed sympathy for people making $500K per year by a famous liberal columnist is a great indication of what famous liberal columnists make per year. She’s probably written an article like this every year, and you could track her salary by changes in the upper limit of those deemed deserving of crocodile tears.

"People making $60,000 paid a larger share of their 2001 income in federal income, Social Security and Medicare taxes than a family making $25 million, the latest Internal Revenue Service data show. And in income taxes alone, people making $400,000 paid a larger share of their incomes than the 7,000 households who made $10 million or more."

My guess is that those making $10 million or more paid at least 4 percent, or $400,000, on average. So, unless those making $400K were taxed for all of their income, I’d still say they were getting a good deal. I would also hazard the guess that those making $10 million or more pay real estate taxes that dwarf those for those making $400K as a percent of income. And, as the Hatcher mentioned before, there is no separate line at the DMV for Gold Club Taxpayers. In fact, rich people arguably get less value from how taxes are spent, because they substitute private security measures for the less valuable protection offered by the state, and private schooling for public.

The rest of us are subsidizing not only the super-rich, but also corporations. Fifty years ago, corporations paid 60 percent of all federal taxes. But by 2003, that was down to 16 percent. So individual taxpayers have to make up the difference, as corporate profits soar and wages fall.

The rest of us? Why does she assume I’m not pulling in $10 million. Damn those corporations, I hate it when I see them walking down the street with cashing pouring out of their pockets, swaggering and the like. They should pay their fair share!

As more and more rich people cheat on their taxes, the IRS is increasingly unable to go after them because it is so poorly funded. For all this, we can thank the Republican Party.

Thank you, Republican Party!

Every year at this time, conservatives moan and groan and tell us how terribly, terribly overburdened we are by taxes. We wouldn't be overburdened if the tax code hadn't been rewritten by Republicans, and if Republicans hadn't weakened the IRS so much it can barely function. Damn right, this is a partisan effort. And damn right, I'm bitter about it. We don't need to raise taxes in this country, we need to collect them. We need tax cuts that don't favor the obscenely rich. You are getting screwed.

Think of all the Che Guvera t-shirts you could buy if the rich paid their fair share! Greedy capitalist bastards.

OK, now that I've gotten that rant off my chest, back to how it's done. Johnston: "One 1985 law, promoted in the Senate as relieving middle class Americans, gave a huge tax break to corporate executives who make personal use of company jets. CEOs may now fly to vacations or Saturday golf outings in luxury for a penny a mile. Congress shifted the real cost of about $6 per mile to shareholders, who pay two-thirds, and to taxpayers, who suffer the cost lost as a result of reduced corporate income taxes. "Since 1988, Congress has also cut in half the Internal Revenue Service's capacity to enforce tax laws, replacing it with extra effort to reduce audits of corporations and the rich.

1988-1994 was a Democratic Congress; 1992-2000 was a Democratic President. And all of this screwing went on without it becoming a big campaign issue, which suggests that maybe, just maybe, people are fine with the tax code becoming less progressive. It’s called democracy, and Ivins doesn’t much like it when it doesn’t validate her preference.

"On March 30, Congress was told that 78 percent of known tax cheats in investment partnerships are not even asked to pay because there are not enough tax collectors to go after them."

I’ll bet you John Edwards was glued to C-Span during that hearing; I could hear his sigh of relief 2 miles from his Georgetown home.

The IRS oversight board asked for money to go after these cheaters, but both Congress and President Bush refused. The IRS's computer system was installed when John Kennedy was president.

The Senate budget currently under consideration includes $129 billion in new tax breaks for millionaires and a $2.8 billion cut in farm and nutrition programs (i.e., food stamps). Which do you think is more important? The House has already passed a budget that cuts at least $15 billion for Medicaid and $5.3 billion from food stamps. I have long held that W. Bush does not believe changing government policies can actually wreck people's lives -- he thinks it's a game, and the Democrats are just the other team. But if you believe the shift in the tax burden in this country -- and the consequent separation of a tiny, ever-richer minority from the rest of us -- doesn't have real effects, you're blind.

Good thing I make enough money to receive a government subsidy for a Braille internet connection!

When you cut housing subsidies, you get more homeless people. (And of course it’s against the law for Ivins to donate money to private charities that would alleviate the problem). When you cut food stamps, you get more hungry people. In 2002, at least 25.5 million people went to soup kitchens and food pantries. (Where they were – fed!) In 2003, 1.1 million more joined the lines. (Where they were - fed!) As unemployment and other government programs run out, even more will be standing on line. (Where they’ll be - fed!) Last year, America got a pay cut. (It’s a shame, because America did such a good job!). Wages for the average worker fell, after adjusting for inflation -- the first such drop in 10 years. That means the standard of living for most Americans is in decline.

Widening of the inequality in income has been a persistent trend in the US, and many other developed countries, independent of differences in social policy; it proceeded apace with Clinton in office.

The country becomes less and less fair, and equality of opportunity grows farther away ever day. Again, I don't think Republicans are doing this because they are mean, but because they have convinced themselves that people shouldn't be "dependent" on government, that it's bad for their moral fiber. Only corporations and the super-rich should get welfare and subsidies. As economist John Kenneth Galbraith put it, "The modern conservative is engaged in one of man's oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness."

Some call it selfishness, others call it freedom. Galbraith lived a high-life – but like every other liberal, there is a disconnect – everyone who has made more than him should pay more in taxes, but mine are at the right level, if not above where they should be. I am reminded of Al Gore, whose charitable givings came under scrutiny in the 2000 election. He had contributed less than $500, if I recall, which is rather pathetic given his income. His response – it’s not easy putting 4 kids through Harvard. See, you have to pry money out of the hands of rich liberals via taxes to fund any charitable efforts, because if you don’t they just piss away their money bidding up college tuition rates at Ivy League schools.

I don't worry too much about rich people getting richer; the super rich eventually want to be famous as well, and those that don't do so via the purchase of political office or a sport's team do so by conspicuously giving away as much of their money as possible, and usually to organizations that Democrats love. So Ms. Ivins should un-bunch her panties, and thank the Republicans for not collecting more taxes that the Republican Congress would only spend on bombing innocent women and children.


Anonymous Anonymous said...

As opposed to the swirling deficit spending currently occupying the Whitehouse..... Start an unneccessary war based on lies while deflecting blame and holding no one accountable, cut taxes (not necessarily a good idea when you have to fund that war you started)and lean on Congress (of the same party by the way) to scare them into giving you another $82 Billion when you don't have accurate accounting for the first $118. You're right, what was I thinking in opposing this administration and it's ideals.....

10:18 AM  
Blogger Incredible Dirigible said...

Yeah, I guess you're right. The war was unnecessary & based on lies. Saddam was a good guy; he didn't really violate 17 UN resolutions. He didn't hurt anyone. He had no interest in WMDs or helping terrorists. It wasn't his fault there was a terrorist training camp in Iraq, complete with a commercial airliner. He was spending Oil-for-Food money on food for the poor. I guess we should put Saddam back in power, re-open the rape rooms, & let him continue to try to develop nukes. Then, once he succeeds, & sends some missiles our way, or sells them to terrorists, we'll wait for 9/11 Part 2 & then the war will be necessary. But not before! We should have just kept warning him over & over. Then he & other terrorists would Really get scared.

7:23 AM  
Blogger Professor Vic said...

The money for the big tax cuts for the rich has to come from somewhere. Unless the current budget deficit is eventually dealt with by cutting government benefits that accrue only to the wealthy or by furture tax increases that will only hit the wealthy, Ivins is entirely correct that the large tax cuts given to the wealthiest Americans today will eventually be paid for by the less wealthy in terms of higher taxes or lower benefits.

Hatch is entirely correct that Ivins' point is entirely one of opinion about how much of the tax burden should be paid for persons of different incomes. There is nothing that automatically says that the poor deserve a break on paying taxes. I just happen to agree with Ivins' sense of fairness, where the rich pay a higher average tax rate than the poor.

As an aside, I personally don't find the fact that private charities provide significant amounts of nutrition assistance to poor Americans a particularly compelling argument for making the tax system less progressive.

8:04 PM  

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