Average Joe Losing the Tax Rate Revolution
Since 1980 tax rates for the wealthy have been decreasing, while taxes for workers are on the rise. From the mid 1930s to 1980 wages kept pace with productivity. Since 1980 wages have stagnated, while productivity has leaped ahead. The gap in productivity to wages is particularly true since the Great Republican Recession. When the economy fell, businesses tended to lay off workers and spread the workload among those who remained. When the economy started getting better, businesses tended to only hire workers willing to do a greater workload. At the same time business demanded existing workers increase productivity or be let go under unfavorably high unemployment conditions. Since 1980 corporate tax rates dropped to a 40-year low of 12.1% in 2011. Meanwhile, the top federal estate tax rate sank from 70% to 40%. In 1980 the first $175K of inheritance was not taxed. Today, the deduction is $5,250K. Income for the wealthy is derived by profit and interest and is not generated by work or labor. Workers make wages and are taxed for their labor. Wealth creates nothing but more wealth. Only labor generates products. Nevertheless, worker wage tax rates continue to rise with higher taxes on income and payroll, while congress continues to push for lower tax rates for the wealthy and more tax breaks, deductions, subsidies, incentives, research and development for industry, and lower rates for corporation dividends than for worker income. The wealthy and workers both pay mortgages, but the vast majority of real estate value, and thus the amount of money saved, goes to the wealthy. Despite the growing tax decline on the wealthy and increases for workers, the Republican controlled House of Representatives continues to hold up every bill in congress under the guise of cutting spending in order to pay for more tax deductions for the rich. Add to this the widening tax gap, the ever-increasing higher share of potential taxes that never even see the light of day, hidden by wealthy tax evasion. It is estimated that $40 trillion in taxes are evaded by wealthy tax dodges, and another $10 trillion is parked by the wealthy safely away in offshore tax havens. wealthy control congress. The wealthy own the media and can afford to buy the message. The Supreme Court has made it official; Money talks and Corporations have rights as people. We are in the midst of a tax revolution, and what is worse, we don’t even realize we are losing the war.
Richard Dorsey, Hacienda Heights, CA