Tuesday, December 7, 2010

From The New York Times

The following is from commenter #81 on Frank Rich's column yesterday – All the President’s Captors.

I work on Wall Street, I'm a Democrat, and I read the financial news each day. I understand what Republicans are doing to the bottom 98% percent of Americans better than most. They are destroying democracy itself and our children's future and turning this country into an anti-democratic oligarchy.

It troubles me greatly that liberal media does not grasp how conservative financial propaganda (a la Milton Friedman) is being used as a blueprint for the cruelties dealt upon the American people by Congressional Republicans.

And it's clear the White House hasn't a clue.

For instance, Friedman/Republican propaganda preaches that government assets should be privatized. Hence, Gov. Christie in New Jersey, like the national Republicans, is searching for ways to privatize as much of what is currently held, and done, by government as possible.

Privatizing assets held by government simply means that one rich person, or one wealthy corporation, will make and keep the profits by operating what was formerly a public asset instead of the people at large. Privatize the New Jersey Turnpike? If so, one person or company makes a profit from commuters using it every day to go to work instead of the government, i.e. you and me. Oh, you say, the turnpike's not making a profit now and so is costing the state money instead of adding to our coffers? Okay, so increase revenues and fix the situation, don't sell it! The same is true for social security, Medicare, health care, etc.

Republicans want your government privatized because they know the few will get even richer as they exploit the people and it is only those few--the top 2% in net worth--that they serve.

Warren Buffet appeared on CNBC recently and said the 400 richest Americans listed in Forbes magazine earned an average of $ 348 million EACH last year, and paid individually an average of 17% each in federal taxes. Despite the fact that they were all in the highest NOMINAL federal tax bracket, after deductions, their average EFFECTIVE tax rate was 17%! (Buffet's comments were reported...nowhere...outside of CNBC.)

That means an individual American earning $ 60,000 annually shares his effective tax rate with the 400 richest Americans. Yet the Republicans say the rich pay too much in taxes and the American people nod their collective heads and agree. Lies!

Tax policy is about how much you keep AFTER taxes, not how much you pay. By promoting propaganda that focuses on how much in taxes the rich pay, Republicans distract you from seeing how much they keep.

Raising the effective tax rate on multi-billionaires to 50% means they would have to subsist on an average of $ 174 million per year. Such an increase would bring in an additional $ 45 billion into the federal treasury--from just 400 people! If we raised the effective rate to 50% on the richest 2% of Americans--six million in all out of 310 million people, i.e. those who earn $ 1 million or more from all sources, we could erase our annual deficits and run surpluses immediately. And we would not have to raise a dime from those who earn $ 999,999 per year or less.

Major American corporations--the Fortune largest 1000--pay only 10% of all tax monies paid annually into the federal treasury, or 2% of GDP. That is down from 6%, or 32% of all tax monies paid into the federal treasury in 1952. This amounts to a great "opting out" by major corporations from funding the federal government. The result is we now borrow an average of 15% of all monies taken in to fund the federal government (which, of course, covers the amount no longer taken in from major corporations), and which forces us to pay interest-on-interest as we sell greater amounts of US treasuries to foreign sovereign funds and wealthy individuals to finance our annual shortfalls.

This payout of interest on borrowing redistributes wealth UPWARD from the poorest 98% of Americans to the richest 2% since they are the principal purchasers of treasury debt. It also represents a bleeding of wealth out of the country to China, Japan and the Middle East, which is where most of our national paper is held. Finally, since much of the activities of the US departments of State and of Defense have been privatized, corporations and contractors principally benefit from the
$ 768 billion spent on defense and foreign activities, meaning that fully 40% of federal outlays flow UPWARD to the richest 2% of the population (since the richest 1% among us own 83% of all stocks).

The federal government has become an enormous engine for redirecting taxpayer monies up to the rich, who contribute only 17% of their income to inflows. Hence, the enormous spread between rich and poor.

We must stop Republicans from cutting/privatizing discretionary govt. spending and we must RAISE taxes on rich individuals and wealthy corporations NOW or the bottom 98% will just get poorer.

Oh, and someone please wake up the White House, the media, and Democrats. Nap time is over.


Owen said...

This seems so straightforward and clear... so WHY isn't it happening ?

(I know, dumb question)

mythopolis said...

I find myself wishing for a gigantic asteroid to hit the earth.