Did you know during the Reagan era that the rich paid more in taxes than what Obama is asking for in the American Jobs Act? And by rich I mean…um…actually no one will define rich – not your accountant, not your mother and certainly not anyone in political office. Thankfully, we have the tax code defines it by those lovely brackets that we all have to fall into.
During the Reagan Presidency (1981-1989) tax leveling/tax boohooing/tax magic, the highest income households grew 11% and the rate of growth for the poverty level was flat. Even Reagan knew that to keep an economy healthy, coming off of the oil crisis of the late 1970’s and the Jimmy Carter administration, that tax increases were necessary. Though, his wasn’t a perfect solution by any means because the government was still spending more than it earned and a balance/surplus wasn’t achieved until the Clinton presidency, the economy still grew at a rate that no one was injured by the tax increases but citizens of the U.S., in all brackets, personal wealth grew or stayed level.
Then George Bush (Twosies – personal nickname and go watch Scrubs) came into office and decided that the government should not hold a surplus because it wasn’t fair to the American people. No, we needed our money and we needed it right now. I was in my early 20’s, in college, and that $300 check from the IRS was a God send to me. But I didn’t realize at the time that while I was getting the benefit of $300, that the people that make millions of dollars were reaping the benefit of a lower tax percentage than I was paying out of my meager salary that I earned so I could go to college.
I was oblivious to it because I wanted mine and I wanted it now. And like a lot of other people, I didn’t do an analysis of government income and spending to determine if the U.S. budget had enough money stashed in the mattress to pay for two wars on a different continent, for natural disasters or in case the economy tanked. Just like many Americans, it was sunny outside, not a cloud in site, why should I prepare for the day where it’s not only raining but it’s hailing, there is a tornado coming and I’m directly in its path. (The credit crisis will be another post for another day.)
Currently, the Republican/Conservative political pundits are saying/writing/shouting that President Obama wants to increase taxes by three percent for those that make over a million dollars a year and corporations that are currently paying no taxes and it’s NOT FAIR. The line of thought is that these people are ‘job creators’ and will take their money and go home if taxes increase. If they can’t have their money, no one will. (Think of Daddy Warbucks pouting now.) And the corporations, are they going to move to Uganda? Sure, they could but where would the infrastructure be to get their goods to market, the military to make sure their employees get into the office or government officials that will negotiate a fair price to export to other countries.
Elizabeth Warren, running for the U.S. Senate for the state of Massachusetts, put it best in regards to corporations having to pay taxes,
“You built a factory out there? Good for you. But I want to be clear: you moved your goods to market on the roads the rest of us paid for; you hired workers the rest of us paid to educate; you were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory, and hire someone to protect against this, because of the work the rest of us did.“Now look, you built a factory and it turned into something terrific, or a great idea? God bless. Keep a big hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along.”
I don’t have a personal lobbyist to be my voice on Capitol Hill to make sure that elected officials look out for my best interest, nor do I have the funds to make significant campaign contributions so that I can get my hand shook at a campaign dinner. But GE paid zero dollars in taxes last year. Now go back and read Elizabeth Warren’s quote and see how you feel about a corporation not paying any income tax on the billions of dollars in profit that they made in 2010.
The tax code needs to be changed so that the middle class, the ordinary citizens, isn’t bearing the entire burden. The ordinary citizen needs to figure out how to get the two parties in Washington D.C. to actually represent the people that elected them, not the corporations and top 1% who own them.