I also feel that for the sake of the nation and its economy, the marginal tax rate for the richest American's should be more than 50%, kicking in at somewhere around $1 million per year. This is to help prevent the investment bubbles that historically follow when the Federal Income tax is reduced below fifty percent. (See Thom Hartmann, Rebooting the American Dream , Chapter 2, "Roll Back the Reagan Tax Cuts," for more on this subject.)
American corporations should also be paying closer to 35% of the nation's total income tax burden, as they were when President Eisenhower sat in the Oval Office, rather than the 8-9% they pay now.
Now understand: if a company were to greatly increase the number of people it employs--directly and indirectly--here in the United States by 100,000, say to produce an inexpensive battery pack for vehicles that would extend an electric car's range to 400 miles between charges, a battery pack that could be recharged in 15 minutes, and would reduce our dependence on foreign oil to zero within ten years while giving us an export item that the world wants; I would have no problem with them paying almost no tax on their income for that year.
Note I said almost. I believe that unless a business has suffered some sort of catastrophic loss--say one of the business's manufacturing plants burned down--a corporation should always pay some sort of alternative minimum tax on their income, even if it is only one-half of one percent. It disgusts me to no end to hear of a business (like Exxon-Mobil, who made a profit of almost forty billion dollars in 2009) making tens of millions in net profits, but because of their ability to abuse the tax code, paying zero income tax. If your company makes $100 million in profits, is it too much to ask that it pay $500,000 as a minimum tax for the services of the Federal government it uses?
As for the individual tax payer, I would like to see our nation return to where it was in 1969, where essentially only the poorest Americans, some sixteen percent of the population, paid no Federal Income Tax at all, unlike the nearly fifty percent of the population who pay no Federal Income Tax today. In 1969, only 12.6 percent of the population was below the official poverty line, while today that figure is somewhere between fifteen and eighteen percent, depending on how you define poverty (Tax information is from the IRS website, poverty information from the Census Bureau website). Note that the minimum wage for 1969 was $1.65 per hour, equivalent to around sixteen dollars per hour today.
There are unfortunately people out there who do not believe that we need any sort of minimum wage, or any of the other rights and entitlements that our fathers and grandfathers have secured for the working men and women in this country over the last century. That we should rely on the "natural" forces of the "free market" to find the "correct" economic levels of wages and prices.
I am always intrigued by those people who try to apply the word "natural" to a blatantly artificial human creation like an economic system. There is nothing "natural" about it: an economic system is a non-zero sum game whose rules are entirely created, modified, and changed by human beings in the form of laws and precedents. The consequences of the effects of particular actions by human beings on the system can generally be determined in advance; the greatest unknown is the precise effects of a particular new technology on the system. Economics has a great potential for self-serving delusion, which is the reason economists try and force wrong headed, incorrect hypotheses and solutions on the system. The infamous " Laffer Curve," which is one of the cornerstones of supply-side economics, is a perfect example.
Supply-side economics has never worked for the majority of the American population, although it was tried during both the Gilded Age (1877-19o2), and the Roaring Twenties. As I pointed out above, fifty percent or more of the American population lived in poverty at the end of those two eras, and in both of them, so called radical ideas such as Communism and Socialism held many of America's workers under their influence.
The Communist Party has never been a significant political force in the United States; the American people are too smart for that. But the Socialist Party has provided an impetus for constructive political and social change in America, in particular before the Second World War with its close relationship with the CIO (Congress of Industrial Organizations), now part of the AFL-CIO.
The Socialist Party in America was never in favor of the concept of violent revolutionary change, except as a last resort, but instead looked to the creation of a system of social justice for the millions of American factory workers who were being left out of the American Dream. The pressure which the Socialists exerted on American politics helped lead to the passage of the Sixteenth (Income Tax), Seventeenth (Direct Election of U.S. Senators), and Nineteenth (Women's Suffrage ) Amendments to the Constitution; as well as the adoption of many of their other reforms, including child labor laws, by liberal minded politicians of both parties.
By 1941 President Roosevelt and a sympathetic Supreme Court had secured in part nineteen of the twenty planks of Reverend Norman Thomas's 1932 Socialist Party platform. No one--except an extremist reactionary ideologue like Glenn Beck--looking at these planks today would call them radical, or revolutionary; they are simply common sense.
(See http://www.drfurfero.com/books/231book/ch03f1.html.)
All that FDR was doing by applying these "socialist" planks to the American economic landscape was catching up with the programs that had been extant in Northwestern Europe, to protect industrial workers and their families, for many years.
What were some of these "pinko" revolutionary programs, you ask? The Federal Emergency Relief Act to help both state and local governments remain financially solvent; The National Industrial Recovery Act to put people to work building infrastructure; The Civilian Conservation Corps (Reforestation) Act that put thousands of young people to work improving our National Parks and Forests; The Homeowners Loan Corporation Act for slum clearance and building decent housing for workers; The Social Security Act which provided pensions and unemployment insurance; The Wagner Act of 1935 which established collective bargaining, worker's compensation and accident insurance, and is the basis upon which all worker's rights laws are based; the abolition of child labor which required a series of Federal Laws and Court decisions leading up to United States v. Darby (312 U.S. 100, 124; 1941) to finally establish as the law of the land; The Agricultural Adjustment Act, The Farm Credit Administration Act, plus the Federal National Mortgage Administration as well as the Federal Housing Administration, established under amendments to The Homeowners Loan Corporation Act, helping farmers and small home owners to prevent foreclosures and sales for non-payment of taxes; and finally minimum wages under the National Recovery Administration. Although minimum wages were found unconstitutional by the U.S. Supreme Court in 1935, that decision was reversed by a later Supreme Court. In fact, it was the constant declaring of FDR's New Deal programs as "unconstitutional" by the Supreme Court, together with intentional foot dragging by American banks and industry, which slowed down the American recovery from the Great Depression, not because President Roosevelt's programs were ineffective.
These programs are quite simply common sense solutions to the problems that faced America during the Great Depression, and President Obama and his administration would do well to take this page from FDR's playbook and turn it into their own. Tax breaks for the rich are the least effective way to jump start a faltering economy, because the rich are not going to spend most of that money at the retail level. They are going to invest it where they will get the highest return on their investment. Because of the complete lack of foresight by a conservative Congress, dominated by lackeys of business interests over the last thirty years, the place for that investment is not the United States.
We have an awful lot of Americans who are quite rightly upset at the direction that this country is heading, on both the left and the right. Too many of those who are on the right unfortunately want things fixed in such a way that will--at least in the short term--cost them the least amount of money and effort. Too many of those who are on the left want to see things fixed, regardless of cost, as long as it is done quickly.
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