Europe has the world's best food, its best healthcare system and vastly more generous vacation and sick-leave policies than does the US. It also has one of the fairest ways to generate revenue for government: a wealth tax. In Norway, for example, you pay 1% of your net worth in addition to income tax.
So what if we imposed a Norwegian-style wealth tax on the top 1% of US households? And by the way, who are these people, economically? We're not talking upper middle class here. We're talking way above that: the "poorest' among them is worth a $8.3 million. This top 1% own 38% of all assets in the United States. (The top 10% own 71% of all US assets.)
"Such a wealth tax on just the top 1% would raise $191 billion each year, a significant attack on the deficit," Leon Friedman writes in The Nation. "If we extended this 1% wealth tax to the top 5% of income receivers, we could raise $338.5 billion a year."
But that's just the beginning: Wealthy individuals are nothing compared to America's money-sucking corporations.
Business shills whine that America's corporate tax rate--35%--is one of the world's highest. But that's pure BS. Our real corporate rate--the rate companies actually pay, after taking advantage of loopholes and deductions--is among the world's lowest! According to The New York Times, Boeing paid a total tax rate of 4.5% over the last five years. (This includes federal, state, local and foreign taxes.) Yahoo paid 7%. GE paid 14.3%. Southwest Airlines paid 6.3%. "GE is so good at avoiding taxes that some people consider its tax department to be the best in the world, even better than any law firm's," reports the Times" David Leonhardt. "One common strategy is maximizing the amount of profit that is officially earned in countries with low tax rates."
America's low effective corporate tax rates have left big business swimming in cash while the rest of the country goes bust.
As of March 2010, non-financial corporations in the US had $26.2 trillion in assets. Seven percent of that -- something like $2 trillion -- was in the form of cash. Where did they get a good deal of this loot? Answer: Mostly from middle-income American taxpayers who, with congressional help, they, the rich, have been chiseling away at for the past 50 years.
The national debt is $14.1 trillion, which is as high as it is because of fifty years of progressively larger tax cuts for corporations and the rich. Over the last half century, the richest Americans have, by this political means, shifted the burden of the federal individual income tax off themselves and onto everybody else. From the end of WWII into the early 1960s, the highest income earners paid a tax rate of more than 90% on all income that was in excess of $3 million a year (as measured in today's dollars). Today, the top earners, by contrast, pay a rate of only 35% on that same "marginal" upper income.
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