Thursday, September 22, 2011

Greed, Shame and Taxes

 In Arianna Huffigton’s book Pigs at the Trough, she explores “Pigs on Parade” and “The Bloodless Coup” of wealthy Americans draining the nation’s financial resources while the general public suffers, and also predicts that after the binge, there will be a reckoning.  Perhaps the reckoning is about to begin.

From Geoffrey Chaucer’s poem “The pardoner’s Tale” in which greed is portrayed as the root of evil, to Ebeneezer Scrooge in Dickens’ The Christmas Carol, to George Elliott’s Silas Marner and Steinbeck’s The Pearl, the despicable nature of greed and the redemptive nature of generosity are portrayed as among the most fundamental human values, which have obviously eluded most of the Republican Party and a handful of Conservadems, like Ben Nelson.  Beneficence has especially eluded the so-called Tea Party (which in reality is an amalgam of the John Birch Society and the White Citizens’ Council).  The leading Republicans claim to be devout Christians or Conservative religious Jews, so one might think they would abide by their religions’ stated values and admonitions regarding greed. Not so, not at all.

St. Thomas Aquinas wrote that greed was "a sin against God, just as all mortal sins, in as much as man condemns things eternal for the sake of temporal things." In Dante's Purgatory, the avaracious penitents were bound and laid face down on the ground for having concentrated too much on earthly thoughts. Psalms10:3 states, "the greedy man curses and spurns God." In Judaism, charity is a major principle: "If there will be a poor man among you... you shall not harden your heart or shut your hand toward your poor brother; you shall open your hand to him and shall give him enough for his needs") and Lev. 25:35ff  ("If your brother becomes poor... you shall support him, stranger or settler, and he shall live with you….").   In Buddhism, Greed is one of the Three Poisons that lead to evil (akusala) and that bind us to suffering (dukkha). The Koran states, “Let those who hoard the wealth that God has given them never think that they will benefit from it.  It will bring them nothing but evil.  The riches that they have hoarded will be their chains on Judgment Day” 

The United States of America has become a nation governed by greedy people who exercise vastly disproportionate power to their actual numbers, and a large proportion of ordinary Americans are suffering dearly as a consequence.  According to the US Census Bureau data released Tuesday September 13th, 2011, the nation's poverty rate rose to 15.1% in 2010 to its highest level since 1993. In 2008 one in six Americans lived in absolute poverty. Among single parent families (basically women with one or more children) 30% of white and Hispanic, and 40% of African Americans live in poverty.  The overall percent in poverty has has doubled since 1970.  
 The top ten American banks are currently sitting on over $2 trillion dollars in assets that they are knowingly withholding, which could be turned into jobs and helping promote the American economy.  As long as they can earn income on their investments that basically goes untaxed, they feel no need to share their wealth with the rest of America. Let them eat cake, they say to Main Street.

Since 1954 when the tax rate for people earning over $250,000 per year was 91%, taxes for the wealthiest Americans steadily dropped to their lowest level in 1988 when Ronald Reagan was President to 28%, and are currently 35%, not taking into consideration the numerous tax loopholes enjoyed by the wealthy that are not available to middle and lower income Americans.  In practice, the average tax rate for wealthy Americans is about 15%, the same as a family of four with a family income of $60,000, though they may earn 50-100 times more per year.  Here are some examples of those tax loopholes.
Capital gains tax rates are lowered to "encourage investment." A capital gain is a profit that results from investments in stocks, bonds or real estate, which exceeds the purchase price. It is the difference between a higher selling price and a lower purchase price, resulting in a financial gain for the investor.  Their investments can easily be tailored to pay a maximum of a 15% federal tax rate. 

Many wealthy individuals obtain most of their income from capital gains (see graph below).  Many capital gains are invested in overseas ventures that involve employing foreign workers, not American workers, who of course are paid a pittance.  CEO's have most of their income paid in stock options, which with any planning will be taxed at the 15% rate.  Here’s another example, buy a painting for $10,000, hold it for a year or two, get a friendly appraiser to say it's worth $60,000, and you deduct that from your reported income. That saves more on taxes than the $10,000 you actually paid.  If you are an average schoolteacher, fireman or plumber, you probably don’t have $10,000 to buy the painting in the first place. Tough luck, the Republicans say that’s your problem.

Some examples of corporate tax loopholes: graduated corporate income taxes, exempts the first $50,000 in profit from taxes. Companies (and individuals) do not pay federal income tax on interest earned from their investments in state and municipal bonds. What’s more, private companies can in some cases issue tax-free bonds of their own for projects that benefit the public, such as construction of an airport, stadium or hospital.  Why do you think they lobby so hard in the legislature for funding for a new stadium?  Another allows companies to deduct for all of the depreciation of a piece of equipment at once (as opposed to over the, say, 10 or 20 years it actually takes the item to depreciate). This is the equivalent of the U.S. government giving the company an up-front, interest free loan.  Multinational companies can defer paying U.S. income taxes until they transfer overseas profits back to the United States, under this law. Bush gave them a pass on paying their taxes when they brought their profits into the US, and they have simply repeated this greedy practice and are asking for the same hand-out again.   Among the American corporations that pay ALMOST NO TAXES are Boeing, Amazon, Host Hotels & Resorts, Five major energy corporations (such as Xcel Energy), Pfizer pharmaceuticals and Carnival Corporation (Cruise lines).  Major oil companies pay federal taxes at a much lower rate than most working class individuals though their income goes into the multi-billions of dollars.

There is very little evidence that tax cuts for the wealthiest individuals or corporations generates jobs for working class Americans. It is plain and simple gluttony, Robinhood in reverse, stealing from the poor and giving to the rich.  If tax cuts for the wealthy generated jobs, Bush’s profligacy wouldn’t have lead to the Great Recession.  The effluvia emanating from the Republicans about "class warfare" can treated with the disdain it deserves. 

What happened to a sense of shame?  “Were they ashamed when they had committed abomination? no, they were not at all ashamed, neither could they blush,” Jeremiah 8:12.

As conservative favorite Phyllis Schlafly wrote, Bite us once, shame on the dog; bite us repeatedly, shame on us for allowing it.”   It’s about time the Republican Dog is broken of its bad habits.  Barack Obama’s proposed “Buffett Rule” is better than a sharp stick in the eye, but not much. Give him credit for a step in the right direction.  Much, much more needs to be done to reform the tax code to level the playing field for working class Americans.

1 comment:

  1. Great post, thought you might like my machinima version of A Christmas Carol