Tax Madness

Any suggestion for raising taxes meets howls of resistance, not just from tea partiers in these dark times: states are going bust. Yet, Wall Street financiers pay themselves even fancier bonuses than they did last year, bonuses made possible by taxpayer money.

Financial firms oppose taxing hedge fund managers' income at the rates working people pay. The parallels are striking with the Roman Empire at the tail end of its history. Go to http://www.roman-empire-america-now.com/taxes.html. Roman wealthy didn't pay taxes, and hedge fund traders, some making as much as $1 billion a year, are taxed at a flat 15% rate, while most of us pay between 20% and 39%.

Hedge fund managers have also been part of the Wall Street lobbying onslaught to prevent financial reforms. They scream that regulation will cost profits, when it was their ruthless pursuit of fast profits that nearly destroyed the whole world economy!

NY's Governor Paterson, formerly liberal, has summarily rejected a "billionaire's tax," despite the huge state deficit he's desperately trying to close. And he and the US Congress, refuse to consider a stock transfer tax, a cent or two per share traded, despite the fact that the tax would not only raise very needed revenue (a state tax might make up NY's deficit), it would also discourage the kind of hyper-speculation that led to the near financial collapse.

Wall Street is practically apoplectic at the idea of either tax, and yet, they almost drove us off a financial cliff, and cost the US 15 million jobs it will take many years to replace. Both taxes would discourage the kind of antics that led to the collapse--and raise revenue where it is most needed to continue an economic recovery--for a state budget that otherwise requires drastic cutbacks, laying off even more jobs.

Liberals are scared shitless advocating for any tax, even if they know it would be good policy. Why? Because the right-wing media have whipped up a frenzy about raising any taxes, and Republicans have jumped enthusiastically on board.

The furthest Democrats in Washington dare go, is to let the Bush tax cuts lapse. Republicans scream, that's a tax increase! It is, but only for taxpayers earning over $250,000 a year. I'd be very comfortable on half of that: most people will never come close to it.

Does nobody remember? In the Eisenhower years, top tax brackets paid over 90% above a cutoff, but the 1950's were booming, and we weren't fighting two wars. Historically, more highly graduated tax rates correlate with higher growth as well as with greater economic equality, despite conservative economic theory to the contrary.

The hype about "raising" taxes is madness; raising rates on the higher brackets would reduce US inequality (worst among developed nations)--and restore the economy. Will that happen? Only if liberals find some cojones.