Excerpts from Confessions of an Old Man
“The upper class keeps all of the money, pays none of the taxes. The middle class pays all of the taxes, does all of the work.” Late Comedian George Carlin
President Trump, who is a billionaire, presides over the richest cabinet in US history. The combined net worth of the cabinet is estimated to be $9.5 billion or more. Another way of looking at it is that this cabinet of about twenty-five people is worth more than forty-three million, or one-third, of American households combined. It appears as if socialism is camouflaged as capitalism, whereby the US government is centrally controlled by a few. One can argue that the US government has turned from a government of the people, by the people, and for the people into a government of one percenters, by one percenters, and for one percenters. More than 50 percent of senators, 30 percent of congresspersons, and 75 percent of Supreme Court judges are millionaires. This does not mean that all rich people are bad or do not care about the country. The reality is that Americans face inequality everywhere, whether it is in wealth and income, gender, race, education, or even representation in government.
Wealth and income inequality have been more pronounced during the last three decades. The federal tax code is one of the key factors responsible for the rise in income and wealth inequality. Republicans believe in the top-down or trickle-down approach of providing tax breaks to the top one percenters and corporations—one of the ways to distribute money up from the middle class and the MI generation. They believe that it will spur economic growth because the more money corporations have, the more they will invest. More investments will mean more factories and more jobs. This is despite the fact that for-profit corporations are interested in making money, and they cannot make money if there is no demand for their products.
Historically, if you make money with money (i.e., investing in the stock market), then you are taxed at a lower rate than someone who earns money by working. This is one of the major impediments to the lower-income and middle classes building wealth. As billionaire Warren Buffett said, back in 2011:
“If you make money with money, you get taxed very—at very low rates; 15 percent dividends in capital gains. No payroll tax. If you make money with muscle or hard work or sweat of your brow, you get taxed at rates that move on up . . . then they get really hit hard on the payroll tax and that’s what brings the rates in our office up to an average of 36 percent.” [The 15 percent rate on capital gains has been increased to 20 percent since the time of this quote.]
So the basic question worth pondering is this:
“Why is working income taxed at a higher rate than nonworking income?” ….More