From 'Willamette Week' (Portland, OR): 9 Things The Rich Don't Want You To Know About Taxes

These graphs are from a piece by David Cay Johnston. Go here to read it in its entirety; Johnston nails it.












This is your country.

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Can I Write 'Em Off As A Bad Investment?

H/T: Salon.com

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That Rathole The Economy's In? It's Really Just A Loophole...

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Both Sides Now

The Senate voted today and the Ghost of Dubya continues to hover...

From the New York Times:

The Senate on Saturday rejected President Obama’s proposal to end the Bush-era tax breaks on income above $250,000 for couples and $200,000 for individuals, a triumph for Republicans who have long called for continuing the income tax cuts for everyone.

The Senate also rejected an alternative proposal, championed by Senator Charles E. Schumer, Democrat of New York, to end the tax breaks only on income exceeding $1 million.

Republicans voted unanimously against both proposals, and Democrats said it showed that they were siding with “millionaires and billionaires” over the middle class. Republicans said they were refusing to let taxes rise on anyone given the continuing weakness in the economy.

Or as one of their mouthpieces put it:

Can Cali Get A Do-Over?

For over 30 years, Prop 13 has helped starve local government coffers, resulting in a bad deal for many Californians. With these historically tough times, Golden State anti-tax zealots are predictably howling at the moon instead of looking in the mirror.

From Michael Fox on Open.Salon.com:

Republican crocodile tears flowed this weekend in Orange County as a group of city officials called F.I.S.T. – “Fight Insane State Theft” – comprised of 14 Orange County mayors and 42 city council members, nearly all of them Republicans - protested Republican Governor Schwarzenegger's plan to take away billions in state property tax revenue from their cities.

According to the Orange County Register, the group held a rally this past weekend in Placentia, joined by an array of Republican front organizations posing as anti-tax crusaders, including Citizens for a Better Placentia, Fullerton Association of Concerned Taxpayers, and Yorba Linda Residents for Responsible Representation.

The Register notes that the protesters are “particularly concerned about losing funds for roads and other transportation projects.”

But it is the Republicans themselves – and their corporate funded anti-tax allies – who are themselves directly responsible for giving the state the power to take away property tax revenue from California cities.

Prior to 1978, local governments in California (as elsewhere in the nation) could set their own property tax rates and spend the money that they raised on local needs.

But the Republicans did not trust local governments or local voters with the power to tax local property or to spend that revenue as they thought appropriate.

So they decided to give the state the sole power to set property taxes and to give the state legislature the sole power to decide how that money would be spent.

Prop 13 took away the cities' power to set property tax rates or levy property taxes, and gave all such power to the state -- where it would be subject to Prop 13’s strict limits and the 2/3 rule – in other words, subject to the statewide anti-tax minority’s veto, regardless of the wishes or needs of local officials or voters.

Now our local Republican elected officials and Republican anti-tax front groups are outraged about “losing funds for roads and other transportation projects” -- which, by the way, tend to benefit large landowners and developers more than local citizens -- because the state wants to spend that money elsewhere.

This latest instance of Orange County Republican hypocrisy reminds me of an exchange from Samuel Beckett’s play Waiting for Godot:

Estragon: We've no rights any more?

Laugh of Vladimir, stifled as before, less the smile.

Vladimir: You'd make me laugh if it wasn't prohibited.

Estragon: We've lost our rights?

Vladimir: (distinctly). We got rid of them.

So I ask our Orange County Republicans: Having given up our rights, are you now ready to amend Prop 13 to return the property tax power to local governments and local voters?

They're Howard Jarvis acolytes, Michael; don't hold your breath.

Click here for more on Cali's calamity.

Teabaggers Are In Their Cups.

     From Robert L. Borosage, Co-Director of the Campaign for America's Future on HuffPo:

     In 1980, as "Gilded Age Taxation," a study by the Institute for America's Future shows, the richest 1% of Americans captured fully 7.7% of the nation's after-tax income. The middle sixty percent captured about 50.9%. By 2006, the latest CBO figures show the opulent 1% -- making an average $1.3 million -- captured a staggering 16.3% of the nation's income after all that tax code redistribution. While the middle sixty percent garnered only 44.1%. If class war is being waged, the rich are on the march.

     The Institute for Policy Studies details the staggering contrast to the Eisenhower years. In 1955, the top 400 taxpayers averaged about $12.3 million in income (2006 dollars) and paid, after exploiting every loophole imaginable, 51.2% of that in federal income tax. A half century later, the richest 400 average a breath-taking $263.3 million in income each, and pay a mere 17.2% of that in federal income taxes. (A lower tax rate than paid by most of their secretaries).

     If those 400 taxpayers had paid at the same rate in 2006 as a half century earlier, the federal treasury would have collected $35.9 billion more in revenue, or enough to double the energy and transportation budget combined. No wonder Ike, clearly a stealth "socialist", could afford to build the interstate transport system.

     Read more here, here, and here. 

All For One & One For Only One.

     Perhaps you've read about some of the pissed-off  people here in the Land of the Free and the Home of the Brave who earn more than $250,000.00 per year and intend to scale back their money-making efforts by dropping clients or laying off people because they don't want to pay (marginally) higher taxes. 

     These people live among us:

     A 63-year-old attorney based in Lafayette, La., who asked not to be named, told ABCNews.com that she plans to cut back on her business to get her annual income under the quarter million mark should the Obama tax plan be passed by Congress and become law...

     "We are going to try to figure out how to make our income $249,999.00," she said.

     "We have to find a way out where we can make just what we need to just under the line so we can benefit from Obama's tax plan," she added. "Why kill yourself working if you're going to give it all away to people who aren't working as hard?"

     The attorney says that in order to decrease her income she'll have to let go of clients, some of whom she's been counseling for more than a decade.

     "This means I'll have to tell some of my clients we can't help them and being more selective in general about who we help," she said. "I hate to do it."  ...

     Dr. Sharon Poczatek, who runs her own dental practice in Boulder, Colo., said that she too is trying to figure out ways to get out of paying the taxes proposed in Obama's plan. 

     "I've put thought into how to get under $250,000," said Poczatek. "It would mean working fewer days which means having fewer employees, seeing fewer patients and taking time off."

     Those dopes were in an ABC News report which Jonathan Chait of The New Republic suggests was also written by dopes:

     I've seen a lot of dumb news reports in my life, but I'm not sure anything can quite match this one from ABC News. The premise of the report is this: Barack Obama plans to raise taxes on people who make more than $250,000, so the reporter has gone and found people who earn a little more than that sum who plan to decrease their income so that they come in underneath the magic line.

     Now, the obvious objection here is that the tax code doesn't work that way. A tax increase affects the marginal dollar that a person gains. That's means only every dollar over $250,000 is taxed at a higher rate. Obama is not proposing a tax system whereby somebody who goes from $249,999 to $250,000 suddenly becomes poorer. Nobody has ever enacted a tax hike like that in the history of the United States.

     And here's Newsweek's Daniel Gross, with a lesson in kitchen table economics for the "We're All Socialists Now!" brigade:

     Say you're a CNBC anchor, or a Washington Post columnist with a seat at the Council on Foreign Relations, or a dentist, and you managed to cobble together $350,000 a year in income. You're doing quite well. If you subtract deductions for state and property taxes, mortgage interest and charitable deductions, and other deductions, the amount on which tax rates are calculated might total $300,000. What would happen if the marginal rate on the portion of your income above $250,000 were to rise from 33 percent to 36 percent? Under the old regime, you'd pay $16,500 in federal taxes on that amount. Under the new one, you'd pay $18,000. The difference is $1,500 per year, or $4.10 per day. Obviously, the numbers rise as you make more. But is $4.10 a day bleeding the rich, a war on the wealthy, a killer of innovation and enterprise? That dentist eager to slash her income from $320,000 to $250,000 would avoid the pain of paying an extra $2,100 in federal taxes. But she'd also deprive herself of an additional $70,000 in income! 

     Aren't the people with money supposed to be good with money?

     Thanks to Jason Linkins of HuffPo for the heads-up. Read Gross's Newsweek piece here.