We, the People, call David Cay Johnston to testify abut “The Covert Campaign to Rig Our Tax System to Benefit the Super Rich – and Cheat Everybody Else.”
[Note the following is from Johnston’s “Perfectly Legal.” He is a Pulitzer Prize winner, and a finalist for three other Pulitzer Prizes}
Johnston: “The clear trend in America the past two decades [1980-2000] has been to cut taxes on the rich and raise taxes on..the middle class and upper middle class to make up part of the difference. this was done largely by collecting excess Social Security taxes decades in advance of when benefits would be paid. this trend is growing as the alternative minimum tax hits middle class families.”
Johnston: “The income tax is collected only against reported income..the real issue about our tax system. The rich have myriad ways to avoid recognizing income for tax purposes, most of them perfectly legal..the past decade has been a period of lax tax law enforcement in which tax evasion was openly advertised..the vast majority of cheats are richer today..”
Johnston: ‘We have systematically taken away the ability of most Americans to save by taxing them too heavily..expanded the capacity of those with the most to save even more by lowering their taxes.”….
”Our tax system is a good part of the reason..incomes of the richest 1%, and especially the top-earning 13,400 American families, have soared while the bottom 80%..have seen their incomes stagnate for three decades.”
Johnston: “When taxes are examined overall – including state and local income, sales, and property taxes – America has something close to a flat tax. The top fifth..pays just a penny more out of a dollar in taxes overall than the poorest fifth, 19 cents versus 18 cents.”
Johnston: ”The most overwhelming need is to simplify the tax code..complexity..benefits the rich, the well advised and the well connected. Much of the complexity is because of congressional favors for the political donor class, whose access to power benefits them at the expense of those who cannot afford to buy a steady stream of campaign contributions to ensure their senator or representative takes their calls.”
Johnston: “Corporations..lowered the portion of their profits that go to federal income taxes from 26 cents of each dollar in 1993 to 22 cents in 1998, even though the official corporate income tax rate remained unchanged at 35%. For almost three decades corporate profits have been growing one third faster than corporate income taxes.”
Johnston: ”Corporations are busy moving intellectual property such as patents, trademarks and the title of the company logo to entities organized in tax havens..then pay royalties to use their own intellectual property, allowing them to convert taxable profits in the United states into tax-deductible payments sent to Bermuda…You pay for this through higher taxes, reduced services or your rising share of our growing national debt. You also pay for it through incentives in the tax system for companies to build new factories overseas and to reduce employment in America.
”These trends to lower taxes on wealthy people and on corporations are aided by new rules allowing capital and goods to flow freely around the world, while immigration and employment laws limit any mass movements of workers and ever-tougher rules against union organizing give capital an advantage over labor in setting wages.”
Johnston: “..state legislatures starting in 1991 have passed laws that..took away the most powerful incentive for self-policing by the corporate professions of law and accounting. These laws, allowing “limited-liability” partnerships and corporations, help explain the wave of corporate cheating that swept the country in the past decade…Congress..passed a series of little-noticed laws that shift risks off corporations and the super rich..onto most Americans.”
Johnston: “That some of these issues..have been littler reported..is not surprising. Most news is a report of the official version of events..Few politicians..mention how the tax system is being rigged to benefit the super rich at the expense of everyone else.. Many journalists rely for expert quotes on a dozen well-financed nonprofits..in Washington to promote policies that primarily benefit their rich donors. their aim is to convince us..these policies are actually in everyone’s best interest. The rise of marketing posing as policy is one of the great and subtle advances in the never-ending effort to manipulate the news media.”
Johnston: “Most Americans depend on wages for their income, wages that are tracked closely by the government and leave little opportunity to escape taxes. The super rich are different. They largely control what the government knows about their incomes..their friends in Congress have slashed budgets for inspecting the tax returns of the rich and super rich.”
Johnston: ”..the ax system is being turned on its head. Since at least 1983 it has been the explicit, but unstated, policy in Washington to let the richest Americans pay a smaller portion of their incomes in taxes and to defer their taxes..a stealth tax cut, while collecting more in taxes from..the middle class.”…
”The tax system is causing the benefits of American society to flow up and pool at the top..official government statistics show just that.”…
”The tax system is becoming a tool to turn the American dream of prosperity and reward for hard work into an impossible goal for tens of millions of Americans and into a nightmare for many others…being used to create a nation with fewer stable jobs and less secure retirement income..being used by the rich, through their allies in congress, to shift risks off themselves and onto everyone else..perhaps worst of all, our tax system now forces most Americans to subsidize the lifestyles of the very rich, who enjoy the benefits of our democracy without paying their fair share of its price.”
Johnston: ”The steady erosion of law enforcement budgets for white-collar crime..emboldened those who would have behaved better if the chances of getting caught were significant..A pollster named Frank Luntz persuaded Republicans that the single best way to get votes was to attack the Internal Revenue Service. He urged them to call for tax relief – being careful not to say “tax cuts…The IRS budget has been restrained so severely that only one in five..tax cheats it identifies is pursued..The other four pay nothing.”
The advantages..many of these laws, regulations and budget cuts give to corporations and the rapacious rich went unreported in the major news media. As publishers cut news budgets, junk journalism expanded because covering opinions and official leaks about sex scandals was far less expensive than digging out complicated facts about the economy, budgets and taxes.”
Johnston: ”The executives and investors who wanted..changes were not in a rush..many..were patient, spending money for decades to get their way one law, one rule, one fewer regulation at a time..with..campaign contributions, they wielded enormous influence. In the 2000 elections for Congress, the nonpartisan Center for Responsive Politics found that more than 80% of identifiable political contributions came from just one in 625 Americans. By the 2002 elections, the ratio was down to just one in 833, roughly equaling the top tenth of 1 percent.”
[Note – REREAD what Johnston has said above. Also!!!!! go to the charts on pages 22, 27, 31, 33, 34, 36, 37, 38, 74, 75, 76, 96, 115, 294.!!!!!!! BUT, MOST OF ALL. - go to the chart on page 114: ”Middle Class Pays So Rich Can Pay Less”!!!!!!
How gullible are YOU??? Do YOU believe the fairy tale of “trickle down economics”??? The unspun data from the Census, the I.R.S., the GAO, the CBO pre-1980 vs. post-1980 show YOU to be the fool if YOU do.
Thanks to corrupt Supreme “Court” decisions – 1976 “Buckley,” 1978 “Bellotti,” and 2010 “Citizens United” – bribing Congress is now officially “free speech.” And – since the rich have money, they have more “free speech.” This is often said to be. “access” – as in bribed Congress Critters listen to them, especially hear their “pain” at being “over taxed” – as in “over taxed” to share their wealth with “undeserving” members of the lower 90% – that”s YOU.
NOTHING WILL CHANGE – unless – YOU demand a return to what made America great in 1947-73 – high taxes on the rich. The stress the bottom 90% feels is close to entirely the fault of the rich and corporations.
Johnston lays it out for you – read this book. And wait for the next two posts. on subsequent Johnston books – “Free Lunch”. how the wealthiest Americans enrich themselves at government expense [and stick you with the bill]; and “The Fine Print”. how big companies use “plain English” to rob you blind..’}-
With Justice For All 