Sunday, May 31, 2015

Republicans are raising taxes, tolls, fees, and fines on the middle-class & poor, while lowering taxes for the wealthy: "It's a madhouse!"

(When I see tens of millions of middle-class and low-income Americans continuously voting for Republican politicians who want to implement regressive taxes, tolls, fees, and fines on middle-class and low-income Americans, it makes me want to react like Charlton Heston does above.)

In January of this year, The Institute on Taxation and Economic Policy released the findings of a recent study they performed for all 50 states. Here are some of the things they found:

--> "Virtually every state tax system is fundamentally unfair, taking a much greater share of income from low- and middle-income families than from wealthy families. The absence of a graduated personal income tax and overreliance on consumption taxes exacerbate this problem."

--> "Combining all state and local income, property, sales and excise taxes that Americans pay, the nationwide average effective state and local tax rates by income group are 10.9 percent for the poorest 20 percent of individuals and families, 9.4 percent for the middle 20 percent and 5.4 percent for the top 1 percent."

--> "In the 10 states with the most regressive tax structures (the Terrible 10) the bottom 20 percent pay up to seven times as much of their income in taxes as their wealthy counterparts."

Despite these findings, Republicans keep pushing for more and more regressive taxation. For example, the Republican Governor of Maine, Paul LePage, wants to get rid of income taxes and replace the loss of revenue with regressive sales taxes. And, until he gets his way, he appears to be willing to bring his government to a halt ("Paul LePage Vows To Veto Every Democratic Bill Until Party Helps Kill Maine's Income Tax," Huffington Post, May 29, 2015). 

In 2013, in Republican-controlled North Carolina, "the General Assembly...passed and Governor McCrory signed a massive tax shift into law...a plan that will give huge breaks to the wealthy and corporations while forcing the bottom 80 percent of taxpayers in the state to pay more on average" ("The almost forgotten regressive tax shift," NC Policy Watch, August 29, 2013).

In Kansas, Republican Governor Sam Brownback has gone on record saying he wants to replace his state's income tax system with a regressive consumption tax system (heck, in Kansas they even tax food) ("Lawmakers tackle education, social issues but budget remains," The Topeka Capital-Journal, April 4, 2015).

And this is happening all across the country, and not just with taxes, but also with tolls, fees, and fines. See my blog post "Ten Ways The Political Right Is Vacuuming Money Out Of Your Wallet With Their Trickle-Down Economics. Welcome To The Great Right-Wing Revenue Switcheroo."

Now, Democrats are guilty of this phenomenon too, but Democrats usually engage in regressive taxation grudgingly because they're not getting the federal assistance they need....because.....(drum roll)....Republicans have been handing out gargantuan tax breaks to the wealthy, at the federal level, for 35 years. That is the important distinction: Democrats engage in regressive taxation because they're forced into it, via Republican-fueled trickle-down economics at the federal level (which results in a federal government that is less willing and able to help with things like infrastructure and education), but Republicans engage in regressive taxation because that's their modus operandi. Their goal is to burden the middle-class and poor with more taxes, tolls, fees, and fines, so that their super-wealthy campaign donors can pay less. Make no mistake about it, it's 100% class warfare. As billionaire Warren Buffet has said, "Through the tax code, there has been class warfare waged, and my class has won. It's been a rout."

(Herman Oliphant, left, speaks to the U.S. Secretary of the Treasury, Henry Morgenthau, Jr., in 1937. Photo courtesy of the Library of Congress.)
New Deal policymakers had a different philosophy. For example, "When it came to taxes, Roosevelt simply believed that rich people should pay more than poor people. And in emergencies, they should pay a lot more." Herman Oliphant, a U.S. Treasury lawyer and tax expert during the New Deal, felt that tax policy "could be made the vehicle for fundamental social reform, specifically targeting the accretion of economic power among a small group of companies and the people who ran them." (Joseph J. Thorndike, Their Fair Share: Taxing the Rich in the Age of FDR, Washington, DC: Urban Institute Press, 2013, p. 45 and 133)  

Unfortunately, we don't have a Roosevelt in the White House today - nor do we have many New Deal-type policymakers in Congress or the executive branch. And so, we are living in an era where the middle-class is shrinking but being asked to pay more and more, and the rich are getting richer but being asked to pay less and less. And, as if that particular insanity was not bad enough, Republicans are working feverishly to cut government funding for things like food assistance and education, thereby putting even more financial stress on middle and low-income Americans. Furthermore, in voting behavior that can only be described as jaw-dropping, tens of millions of middle and low-income Americans continue to vote for Republican politicians. And those of us who don't vote this way are still dragged into the foolishness, forced to pay higher property taxes, higher sales taxes, higher bridge tolls, higher car registration fees, higher college tuition, more traffic fines, and so on.

To put it simply: It's a madhouse.

(Also see "The Crazy Republican War on Food Stamps," The Atlantic, June 26, 2013, and "House Republicans just voted to give the very wealthy a tax break," Fortune, April 26, 2015)

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