Not a solution, but a big step towards recovery…

I am thoroughly annoyed at the Right, but that’s nothing new. I am annoyed with the majority of the populace, as well, because people don’t seem to call them to task, well, ever.

I know, you think nobody is calling the Democrats to task, either, but that’s not exactly true. The Right has Fox and Rush and the like, who call EVERYTHING into question, without really explaining how or why it’s exactly bad. The old Rudy Giuliani quip works here: every sentence they utter contains a noun, a verb, and SOCIALISM!!!.

SOCIALISM!!! is inherently bad because the Ruskies did it, and it was horrible! Or something like that. I got bad news for you people: we are all socialists, and you prove it every time you scream about “Keep the government out of my medicare!” or “…social security!!!” … or whatever. We have a public health system that we would pay a lot less for if it were publicly administered (despite Rush’s bashing, Canada and the UK have a pretty darn good health system.) We have public postal systems, public parks, public police and fire brigades. We have a socialist republic, people. Soviet-style government is not a requirement for socialism, it’s just the crap the Right spews.

The Right does not want you to be rich, either. They ARE the Rich, and making you rich would only make them less rich, and they want no part of that. Scott Adams warned “beware the advice of successful people; they do not seek company.”

A couple things we could do to save what we have is simple tax policy. Companies are sitting on record hoards of cash, quietly waiting to see what they can get with it, drawing crazy interest, and investing it in cash making products in Wall Street that do nothing to actually put anybody to work except the people on Wall Street who are already…”working”. Raise the capital gains tax. It forces companies to find useful ways of spending rather than saving. Individuals need to be encouraged to save, corporations need to be encouraged to spend. More often, the best way to spend cash is to hire people: people to upgrade your infrastructure, people to make more products, people to make new products, people to support other people to make the company more money to hire more people. Profit for the sake of profit is stupid. Profit for the sake of improvement is smart. Right now it is a bad idea to hire someone, because you can make a ton letting cash grow in hedge funds. And it’s only taxed at 15%. Make that %30, and all the sudden there isn’t the incentive to throw money into bank vaults, and hiring someone to make more widgets might only increase output by X%, but it’s not taxed at that higher rate, they pay less on their bottom line, because the employee is an expense, and the money is taxed after it leaves your hands. Yes, it sounds bad to raise taxes, but only because nobody really seems to understand how that works.

Also, get rid of loop holes, and simplify the tax code. Poor people can’t afford accountants to funnel money away into shelters, legal or otherwise. Rich people can. The tax rate does raise as you get richer, but once it hits it’s peak, the actual rate paid by the top drops precipitously.

Look, it’s easy to demonstrate: if you make $20,000 a year, it’s nearly impossible to save any money by hiding it in shelters- you spend all of it every year. (These are hypothetical numbers, I don’t want a complete tax course here, guys…)Even if you had no expenses what so ever, you could still only save a maximum $20,000 a year. If you are taxed at 10%, your tax bill is $2000. After deductions and such, maybe you can get that down to $1000. Therefore your nominal tax rate is 5%. With rent/mortgage, gas, food, car, insurance, and literally *anything* else, if you have an extra $100 at the end of the year for Christmas, you’re doing fairly well.

If you make $1,000,000 a year, your tax rate is 30 percent. Sort of- it’s only 30% of everything over the $200,000, and it drops lower, back down to the lowly 10% on the first $20,000 (again, hypothetical numbers- you can do the math yourself if you want 100% accuracy here, it still works…). Here’s where it gets interesting, let’s say we only have two tax brackets here, over $200,000= 30%, and under=%10.(Not realistic, but it helps demonstrate this). The person making a million pays 10% up to $200,000, or $20,000 in tax, and then 30% of 200,000-1,000,000 == 30% of 800,000 == $240,000, for a total tax bill of $240,000 + the other $20,000, making $260,000. Now, with deductions, let’s say he on only shelter 40% of his total earnings in deductions and credits and workarounds, instead of the 50% the poor person could…so now he’s only paying taxes on $600,000, and the same applies, $20,000 first, then $180,000, for a total of $200,000. Now here’s where people get stupid. His tax rate is not %30 percent. It’s 20%. One of the LOWEST in the world. Many millionaires can get this rate down to well below 5%. Some get it down to 0. Some have even gotten money BACK in overlapping credits.

Think of it this way, for every 1% of income that a millionaire shaves off his taxable income, thats the equivalent of 10 people making $20K simply not paying taxes at all. And the people who tend to make more than a millions make a LOT more than a million. No way no how that’s even remotely close to fair.

Even at 20%, which is 4 times the poor person’s nominal rate, it’s still the difference between living off of $19,000 a year or $800,000. Yes they paid 10 times more than the poor person made, but they get to keep more than 40 times what the other half got.

I’m sorry, if you can’t live off that, you suck as a human being.

Publicly finance ALL campaigns, and set strict spending limits. Money here is the root of the entire problem. The powerful fund both sides, and both sides owe them favors for the support. Else they can’t get elected in the first place. It is a SUCKY system. Only the rich and powerful can POSSIBLY benefit. The only good way to counter it is to band large groups of poor people together into groups…like say, unions of people. But, then again, most unions have long since been undermined by …rich people. Go figure.

The arguments against regulation and taxation of businesses are a bluff, “Companies will go elsewhere!” No they won’t. Some might, but the US is still the largest economy in the world. People buy things here. If you are a business trying to sell stuff and services, and you pull out of the US altogether? That’s cutting off one’s nose to spite one’s face. No company would do it- they would have to work with the system- and employ more people to do it.

 

If you have any actual reasons why these suggestions wouldn’t work in reality, please, leave a comment. My address is jkling ..at.. liniks.com if you have ideas too long for the comment page. If you flame me, your comment will not be approved, but well reasoned comments will always be approved, even if I don’t aggree with the sentiment.

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