By Arthur Piccolo
News Americas, NEW YORK, NY, Fri. Jan. 20, 2012: So Mitt Romney has an income tax problem. Surprise. And surprise that his hypocrite Republican opponents are attacking him as though they are any different. If they had the same kind of income as Romney of course they would do the same pay the 15% investment income rate the law allows no matter how rich you are.
Barack Obama’s income taxes seem to be in order but who cares about President Barack Obama’s income tax problem. Like everything else, it’s like his false promises to bring us “change we can believe in” as President of these United States is. No where more than in our pathetic tax code.
The entire U.S. tax code is one big SCAM.
That is as with so any other issues the problem Barack Obama is not addressing. Yea, yea, yea he wants tax “reform.” Every leader
since the beginning of time, going back to the Cave Men eons ago, all have declared their support for tax “reform.”
What does support for tax “reform” really mean? “Don’t worry I am not going to do anything to significantly increase your taxes rich people.” That is what Obama is saying. Just like the others.
Here are the facts.
Only a RADICAL change in our income tax system is going to address the frightening increase in inequality in America. And here is the irony. There is always irony. The refrain of the rich is ALWAYS that anyone who proposes major shifts in the tax system is using the tax code to “redistribute” wealth. Well isn’t that
Amusing? Except it isn’t!
The fact is that is what the tax code does now and long has. It redistributes wealth TO the rich by leaving the rest of us with a far greater share of the national burden.
The tax code is both a very real and practical all important issue but as well it is about how we deal with it fundamentally determines how power flows in the nation. We cannot change or re-make America for the future without completely re-making the tax code.
Let’s deal with one of the other shibboleths that the rich and their many well paid servants meaning politicians, lobbyists, media, etc. often talk about the fairness of a FLAT tax alternative especially Republicans call it what it really is the flat tax CON.
The idea that everyone top to bottom should pay the exact same tax rate as being fair should be laughed at hilariously but instead it is piously discussed seriously. It is BS. The idea that the richest
Americans and the poorest both should be paying the same rate of their incomes as tax as being fair is preposterous. It’s a sucker deal for all the rest of us who are not rich.
Here is another tax code con.
That most Americans really pay little or no “income” tax. That by
calling income tax by the name payroll taxes that is an integral part of the tax form and that if you don’t pay it you have not paid your INCOME tax and are subject to penalties even jail time – to say the so called payroll tax is NOT income tax is ludicrous but it is done again and again.
Not only is it income tax, it is the most REGRESSIVE income tax of all. It is ONLY collected on the first $100,000 or so of income –
not at all above it and none at all on investment or if you prefer
capital gains income. To make it worse it is the rich who benefit
the most from this most regressive of all taxes because they get the biggest Social Security checks when they reach 65 and which thy don’t need at all. Likewise Medicare. That is a triple scam.
Another way of saying all this is “change we can believe in” starts
with our fatally flawed U.S. tax code why Obama is such a loser
for NOT giving us “the change we can believe in” he promised. Let’s get back to the code and the SCAM.
Carried interest. Perfect example of the disease that infects all of government using phrases that either mean nothing at all or often
the exact opposite of what they really are all about. Carried interest is mostly in the first category but leaks into the second as well. It has no logical meaning but it sounds vaguely good. What carried interest is, is a term for is income tax AVOIDANCE by the rich.
And the #1 poster scam artist for this tax con is Steven Schwarzman, the BILLIONaire hedge fund guy who pays 15% on what is regular income, not the 35% rate the tax code supposedly
requires. Not that he would really pay 35% anyway after his slick
accountants use every trick in the IRS code book. But he and so many others avoid those expenses plus the likelihood they still
might pay God forbid 20% or even 22% on their massive earnings.
NO the U.S. Congress solved that “problem” for Schwarzman and the rest by creating this subterfuge they labeled “carried interest” – of course with the enthusiastic support of the rich who throw some
of the largesse back to the dear members of Congress in legal “kickbacks” called campaign contributions.
Carried interest as you should already know, means that although these very rich hedge fund managers and those in other areas of business that qualify for this very special tax treatment normally
for those who invest funds real money rather than their time – that the mangers earnings are treated the same as though they had invested real money in the company.
It’s nice work if you can get it and you can get it if you are rich and powerful. Of course this brings us to the far larger tax scam from which this carried interest concept flows and flows and flows $$$$. The much larger issue is the difference between the published tax rates for investment income and earned income meaning you work for it. The con here and it goes way back is that to get people meaning the rich to invest we have been conned they need a special inventive now what could that be of course LOWER taxes. If not they will just keep stuffing their money into big safes in their mansions. Believe that con??? They’re too greedy to stop.
What the tax code is really telling the rest of us who are not rich and rarely if ever make investments, is that your WORK is not anywhere near as valuable as the rich and their idle money.
And the fact is, the most egregious abuse of this tax difference is, yes, those with inherited wealth an ever growing class in America. If your daddy left you $500 Million – or hopefully more – in his company well all those earnings you get each year from your share of the company while you never work and idle your time away in one villa or another or on the big yacht, is only taxed at 15% as capital gains ! And it certainly does gain for the rich!
Circling back to carried interest for a moment I am always fair to Obama and I will state here he is on the record as opposed to carried interest but guess what then he buries the matter away and of course does not “work” hard to eliminate carried interest and never will. Many of the Super Rich who come to his $36,000 a plate campaign dinners just might stay away. Or go less often.
So without burdening you or me with any more of the nonsense and there is an endless amount of it in the U.S. tax code including how colleges and so many other institutions avoid paying any tax
at all on what is really commercial businesses like college sports in general and corporate luxury stadium boxes more specifically…
The entire tax code needs to be scraped if we are to save America.
And it must be a very simple plan without exceptions.
NO Federal income tax ZERO and that includes the payroll “tax” scam for the first $ 75,000 of any individuals income no matter the source. NO more payroll taxes.
Income $0 – $75,000 NO Federal income tax. There will also be NO such thing as deductions any more for anything including children or other dependants, or for your favorite college.
For income between $75,000 – $1,0000, the federal tax rate is 20%. Income between $1 Million – $ 10 Million – 30% Federal tax. Income between $10 Million – $100 Million – 40% Federal tax.
Above $100 Million per year income – 50% Federal tax. Again ALL exemptions and ALL special tax rates are eliminated.
That means the other Leading Tax Hypocrite along with Schwarzman, no other than Amusing Uncle Warren Buffet, the
richest man in America while talking equality, pays almost no income tax no his vast fortune. He won’t be able to avoid taxes on billions of it by transferring chunks over to one foundation or another be it his own or Bill Gates as he recently did. Buffett can gives away as much as he wants just as long as he pays the tax on it.
Rich Americans should set up foundations but NOT for the reason most do to avoid their fair share of Federal taxes. The Super Rich can do good AND pay their fair share of taxes to. They can certainly afford to do both. WOW can they ever? Bill Gates!
Also there will be a new annual 1% wealth tax on all of an individuals combined assets over $10 Million minus any debts owed on them. Buffett can afford this also.
Also Federal benefits such as Social Security, Medicare, Federal
disability insurance payments, unemployment insure payments, all will be means tested at an income level to be determined so that our government does not provide such benefits to individuals who clearly don’t need them. No more welfare for the Rich.
As for CORPORATE Federal taxes I’m not going to even bother
detailing that scam. It is simply a version of the individual Federal tax scam. I will go directly to the NEW Federal corporate tax I am commenting on here that makes sense ….
As with personal income tax, NO deductions for issue advocacy, political contributions or luxury boxes, or any of that crap. None! Up to $1 Million a year in business income – NO Federal income tax. Between $1 Million – $10 Million – 20 % Federal tax on all income. $10 Million – $ 100 Million – 30% Federal tax on all income.
Over $100 Million income – 35% Federal tax rate on all income tax applies to ALL earnings worldwide – tax avoidance maneuvers will not be applicable such as re-registering company off shore.
Or the other BS tactics companies use.
Also a new national sales tax of 1% on all purchases for the amount over $1000 for both individuals and companies. Think this sounds RADICAL as the way to fund the Federal government? WRONG! Try the appropriate word – FAIR to all of us.
No I have not subject this to any high powered computerized analysis. My point is this is a logical proposal to stop the ever increasing downward slide into an America 99% of us do not want.
Shifting the burden where it belongs to the rich and most of all the
very rich. These proposals are subject to revision but the overall
concept is what is very important here.
We will put the tax BURDEN where it belongs on those who benefit the most from America those who can most afford these taxes. THAT IS FAIRNESS FOR ALL. The 99% and the 1% of Americans. Each paying their FAIR share.
What will be the greatest benefit of all …….
We will unleash an age of American creativity and entrepreneurship as has never been seen in all of American history.
What this new tax plan does is FREE the 99% from a burden we
can’t afford and don’t deserve and allows us to start businesses and try new jobs and projects without being held down by the tax code or the rich who STEAL all the tax befits for themselves.
The way to GROW America and make America #1 again is to create a nation of entrepreneurs. The tax code plays a pivotal role.
Not in keeping us down and in its new form by providing a burst of energy for the 99% of us as has never been available before.
My point in this commentary is this is the kind of proposals we should expect from Obama but never will see no matter how long he might be President. And there never was any chance we would.
The reality is that Barack and Michelle are card carrying members
of the 1%, no matter how hard they try to continue to con us.
Barack take my advise – do NOT run for a second term. Give us all a break. In fact, think of it as a Tax Break (sic). Go back to Chicago with Michelle at the end of this term and get even richer.
There is no doubt the Very Rich will take care of you as Ex- President Obama. They did so for Clinton they will do it for you. Yes you too Michelle. No need to be an angry Black woman.
Arthur Piccolo is a professional writer and commentator and often writes about Latin America for New Americas.