Our Unjust Tax Code

Bill and Ted both make $100,000 a year, each have a wife who isn’t working so they can stay home with their one year old child. Bill works for a big company and handles their computers and network, sometimes he works 60 hours a week. Ted’s income comes from his stock portfolio. Since they make the same amount of money each year and have the same number of dependents you’d think they would pay the same amount of federal income tax, but you’d be wrong. Ted’s income is taxed at a lower percentage because the federal tax code privileges capital gains with a lower rate. While this has been a problem for decades the Trump tax “reform” of 2017 made it worse. 

Of course much of the rhetoric surrounding work and taxes claims that poor people don’t pay enough taxes and those who get jobless benefits are the problem when in reality it is the very wealthiest among us who not only don’t pay their fair share they use their wealth to actively push to increase the differential. The very wealthy make campaign donations for the maximum allowed by law, then they setup dark money groups to donate more and run their own ads pushing their chosen candidates. The only things the wealthy ask in return for their largesse is that their privileged tax rate continue and the Internal Revenue Service be underfunded so it doesn’t have the staff to audit them and take them to court.

People like you and me, who work hard all day to actually earn our money, pay more in taxes than people who just sit back and collect a check.

Republicans campaigning for midterm elections in 2022 are claiming that the Trump tax cut in 2017 was a great success. They claim wages went up and unemployment went down because the corporate tax cut created a demand for labor that helped disadvantaged groups. The truth is that the unemployment rate has been going down from 2010 to the beginning of the pandemic 10 years later. Nothing remarkable happened in 2017, 2018, or 2019 other than continuing the trend that had been going on for years. 

The 2017 tax law also includes incentives for investing in plants and facilities outside of the United States. Didn’t Republicans claim they were all about “America First”? Those incentives are in the tax code because Republican donors told them to include it. Republicans are not about “America First”, they are about campaign donors first. The only people the Trump tax plan was good for were the small number who fund the political campaigns of the people who voted for it. When pushing the tax bill Republicans claimed that companies that are actually overseas and happen to do incidental business in the United States shouldn’t have to pay taxes. The defined the tax code based such that the higher the percentage of physical stuff a company has outside of the United States the lower taxes they have to pay. That gave every company an incentive to move as much physical plant and equipment overseas as possible.

ProPublica, the non-profit public interest journalism organization, recently published a number of articles on how our tax code and the Internal Revenue Service have been undermined. While Trumps big tax bill was the latest injury Republicans aren’t the only ones who have favored their big campaign donors with tax breaks. On the positive side Joe Biden is pushing to raise taxes on capital gains and revitalize the IRS so that it can audit more of the wealthy people who are not paying their taxes.

Published in the Seguin Gazette - June 16, 2021

Tax breaks for Paris Hilton and Oprah Winfrey’s dog

Not content to continue giving tax breaks to millionaires like Lindsey Lohan and LeBron James now Senators Cornyn and Hutchison are holding up legislation to extend unemployment benefits to give tax breaks on inherited millions for people like Paris Hilton and Oprah Winfrey’s dog.

I find it hard to accept that the millions who have lost jobs due to the near crash of Wall Street banks aren’t more important than a celebrity’s dog. Why aren’t average Americans as important as the Wall Street bankers who wrecked our economy and then got bailed out so they could take home million dollar bonuses this year?

The insanity of tax breaks for millionaires

I keep hearing the TEA Party screaming that the reason they want Democrats out of office is because they’re all about big government and spending the taxpayer’s money. What they don’t seem to get is that last month our government shed nearly 160,000 jobs. The government now employs fewer people than it did during the Bush administration.

Republicans claim that lower taxes would foster more economic growth and more jobs but if you look at the last six years of the Bush presidency when taxes were near a century low you’ll find that zero net new private sector jobs were created. The remedy for this they claim is even lower taxes. Doesn’t this remind you of the famous remark “Insanity is doing the same thing over and over again and expecting different results”?

After WWII, the event which compelled massive deficit spending that finally brought this country out of the Great Depression, the U.S. was much deeper in debt than we are today. Through wise management by Harry Truman and Dwight Eisenhower who invested in education via the G.I. Bill and infrastructure like the interstate highway system our country became prosperous once again and the standard of living for rich and poor alike improved immensely.

The Republican argument that cutting government spending will help create jobs is kind of like a doctor telling you that the solution to your anorexia is to go on a diet.