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Wednesday, 02 July 2014 06:32

The Oligarchy's Greed Knows No End: New Tax Cuts for the Rich Proposed in House

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taxrates(Photo: mSeattle)

Salon recently posted an article entitled, "Conspiracy of the Plutocrats: Secrets of the Wealth-Inequality Explosion Revealed - Piketty Protégé Gabriel Zucman Explains How the World's Wealthiest Are Scamming Governments for Trillions."

Economist Gabriel Zucman contends that an estimated $7.6 trillion is illegally held by the 1% in illegal offshore amounts that are not subject to US taxes. This is because the IRS doesn't officially know about the existence of this stash of money, which far exceeds the US debt.

However, as BuzzFlash at Truthout detailed in one example yesterday, there are plenty of legal ways for the wealthy and corporations to avoid paying their fair share of taxes. The BuzzFlash commentary focused on the growing trend of US corporations moving their headquarters overseas to countries with lower tax rates, thus officially no longer being US companies.

Indeed, it is important to remember that the great redistribution of money from the middle class to the wealthy accelerated with Ronald Reagan's "trickle up" economics. As has been well documented, the oligarchical plan to transfer earnings and cash from the 99% to the 1% has been a success beyond the dreams of even those who devised it.

The Reagan tax cuts for the wealthiest served as a key vehicle for making the rich richer, and that move has steadily proceeded until today, when, as Warren Buffet has famously noted, a billionaire pays half the tax rate of his secretary.

Perhaps then it is of little surprise that MSNBC reported on June 28, "House GOP Pushes Tax Break for Wealthier Parents":

House Republicans have been busy pushing for tax breaks that overwhelmingly benefit big corporations. Now they’re turning their attention to families — largely by helping wealthy families while letting benefits for poorer ones fall by the wayside....

Under the GOP bill, which doesn’t continue the 2009 reforms, “a family making $150,000 a year would receive a new tax cut of $2,200 in 2018,” estimates the CBPP’s Chuck Marr. “Meanwhile, a single mother with two children who works full time throughout the year at the minimum wage and earns $14,500 would lose $1,725.”

Tax cuts for the top level of incomes lead to lower tax revenue paid into the US Treasury. This then leads to plutocratic calls for austerity, due to an increased national debt.

We all know who gets hardest hit by cutbacks in government safety net programs - and it is not the millionaires and billionaires.

What does this all mean in practical terms? Illegal or legal, the wealthiest people in the US are going to mug you any way they can.

Furthermore, accelerating tax cuts for the rich have increased the debt burden of the middle class, because they have to borrow more to keep pace with expenses. Meanwhile, Wall Street makes more money off of the high interest paid by those very same borrowers, once again transferring money from those in need of it to those who don't need it (and stash it in offshore accounts, or invest it in the soaring stock market or elsewhere).

One of the Academy Award favorites this year was the film American Hustle. It was based on an actual bribery sting (ABSCAM) of politicians set up by the FBI. In reality, the name of the movie could describe what the US economic elite have been doing to the 99% for the last few decades.

Copyright, Truthout. May not be reprinted without permission.