Thursday, September 15, 2011

Ian M. MacIsaac: Tax the one-percenters now

  The New York Times last Friday had a great editorial you may not have seen—it can still be read online—entitled “The Enlightened Rich Want to Be Taxed.” A group of billionaires, led by megarich investor Warren Buffett—consistently one of the world’s two richest people since the 1990s, with Microsoft founder Bill Gates—have made a series of public statements and written a series of open letters in periodicals like the Wall Street Journal and Forbes magazine calling for Congress to raise their taxes, and the taxes of the rest of those in top one percent income bracket—the richest 3 million of us out of 300 million American citizens.

  But despite the good intentions of men like Warren Buffett and the few other one-percenters who have joined him, the vast majority of the super-rich would much rather keep their money as tax-free as possible, thank you very much.

  The one-percenters and the mega-corporations and big banks they own and run have two great allies in this: an ever-more ineffective U.S. government, and an ever-more radical American Republican Party. The Republicans have been bought out by the financial class, and they have infected the government with gridlock and a complete lack of morality.

  They’ve succeeded so well, in fact, that as of 2011, the top 1% of American households have more net worth and assets than the bottom 50% of American households. The 3 million richest Americans have more than the poorer 150 million of us.

  The one-percenters’ annual income tax rate is lower than the middle class’s annual tax rate, and that is a shame and a crime. But something very important to note is that most of the one-percenters’ net yearly income comes not from salaries, like regular working people’s money does, but from alternative assets that are frequently referred to euphemistically as ‘compensation’ or ‘benefits,’ or a ‘compensation package.’

  All any of this describes are stock options, bonuses, or some other special transfer of assets and/or currency that does not necessarily register as conventional monthly or yearly income like a normal worker’s pay would on a tax form.

  Indeed, many CEOs of Fortune 500 corporations make less than a million dollars a year in formal salary, but will often make over 100 million dollars a year through gains on the stock market, futures, hedge fund exchanges, bonuses, and all those other things that none of us among the hordes are privy to - perks and benefits they received through their position at the top of a gigantic international conglomerate or bank.

  The super-rich use these other forms of income to keep their money untaxed because they have been able to keep these forms of income off the political radar since they invented most of them in the 1980s after Ronald Reagan stripped the federal government and its regulatory arms like the Securities Exchange Commission (more commonly known as the SEC) of any power to monitor business activity or enforce regulations still on the books.

  In addition, the one-percenters have plenty of money to pay all the lawyers and accountants they need to, to make sure that their money goes unnoticed in one way or another by the IRS. Everyone knows about the use of the Cayman Islands, south of Cuba, as a tax haven, but there are many more, lesser-known spots used by the American-ultra rich to keep from paying their fair share back into society.

  Things were not always this way. At America’s arguable economic peak, in the late 1950s and early 1960s, the top one percent reaped between nine and thirteen percent of the nation’s collective annual income, and were taxed between 85 and 93% throughout that era.

  Today, the top one percent of Americans make over one quarter of the nation’s collective yearly income—one percent of our people makes twenty-five percent of all our income every year—and they pay, on paper, less in taxes than we do.

  Both parties have their share of lobbyists and corrupt politicians, but there is no use pretending like it is an even playing field. Democrats tinker in corruption and the Wall Street overclass, but the Republican Party is easily the more bought-out of the two.

  Their unceasing allegiance to money and the people who have the most of it is why the Republican Party’s right-wing fringe of the 1980s and 1990s is today’s Republican mainstream. Today’s Republicans are not the Republicans of yore, who would sit with the Democrats at lunch and, in genius Rolling Stone political writer Matt Taibbi’s words, work “to achieve reasonable compromises over golf and highballs.”

  Taibbi writes, “for the new GOP, compromise of any kind defeats their central purpose, which is political totalen krieg. … I’ve always been queasy about piling on against the Republicans … But the time is coming when we are all going to be forced to take sides in a political conflict far more serious and extreme that we’re used to imagining.” Men like Rick Perry and John Boehner are not used to compromise; neither are the huge oil and energy magnates and big banks that fund them and their political endeavors.

  Do not underestimate the power of money in politics, especially now, of all times. Money has not been this prevalent in American politics since the Gilded Age. There has not been so little competition among the major banks and oil conglomerates, in particular, since the time a hundred years ago when J.P. Morgan and John D. Rockefeller dominated those industries, respectively.

  The politicians who take money from these mega-corporations and mega-banks and the one-percenters who own and run them cannot be loyal to the voters. Their priority is with the people who got them elected: the one-percenters who run the banks and the corporations in the first place. (The majority of this money going to the Republicans, yes, but recall that Goldman Sachs was also Obama’s biggest overall campaign contributor. Blood is on everyone’s hands.)

  That’s our political scene today, in 2011. Money-soaked whores for corporations and banks intent on nothing but filling the coffers of the people who funded their last election; or little lambs, perpetually compromising, afraid to make a principled stand for fear they’ll irritate the moneyed rich that really control this country just a little too much and they’ll be out of office come next election.

  About the author: Ian MacIsaac is a staff writer for the Capital City Free Press. He is a history major at Auburn University Montgomery in Montgomery, Alabama and former co-editor of the school newspaper, the AUMnibus.

Copyright © Capital City Free Press

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