This will put me in a sour mood tonight, as I work on my taxes. The 25 richest people in the U.S. paid an effective tax rate of only 3.4% from 2014-2018. Krystal and Saager discuss this “phenomenal” reporting by Propublica (based on a “immense” secret trove of never-before-seen IRS records). They mention that the highest U.S. tax rate is officially 37%, for those making more than 628,000. My next stop will be Propublica to better understand how the super rich avoid paying taxes. Meanwhile, the median income U.S. household, often living paycheck to paycheck, pays an effective income tax rate of 14%. I assumed something like this, but these numbers are outrageous. This is stealing in broad daylight. This shouts: “Let them eat cake.”
Here is a quote from Propublica that will be deflating for those who think that the Biden plan will be transformative regarding the tax burden on the wealthy:
The revelations provided by the IRS data come at a crucial moment. Wealth inequality has become one of the defining issues of our age. The president and Congress are considering the most ambitious tax increases in decades on those with high incomes. But the American tax conversation has been dominated by debate over incremental changes, such as whether the top tax rate should be 39.6% rather than 37%.
ProPublica’s data shows that while some wealthy Americans, such as hedge fund managers, would pay more taxes under the current Biden administration proposals, the vast majority of the top 25 would see little change.
This can make for a fun intellectual exercise, but since 1968 it’s useless. Johnson put Social Security/Medicare on-budget, meaning that the temporary surpluses which any idiot actuary could have told you would turn to deficits in 2005, were available to buy votes. Nixon knew what was being done, but concluded that if he took it back off budget he would either have to increase taxes (no second term) or cut spending (lynch mob). The rest is history.
I qualified for two pensions other than social security, actually believing the lie that SS was supposed to supplement other retirement or savings. As a result, my social security is taxed (the final lie to be brought forth, there are no more promises to break). Don’t worry, Joe will fix things by raising rates on the rich, especially corporations that are paying zero tax. How stupid does he think we are? If at current rates the corps are paying zero tax, that’s because they are able to deduct all income. It doesn’t matter what rate he sets if the deductions aren’t changed, because there will still be zero net taxable income. He could set the top rate at a quadrillon percent, but without addressing deductions it won’t raise a penny.
I’m not an economist, I am smarter than the average bear. We need Ross Perot with his annoying voice and white boards. Our spending this year will be more than 50% of GDP. Entitlements are out of control. Social security and Medicare spending has to slow, probably by fiat. I’m trying to prepare my wife and daughter to emigrate to Costa Rica. Transforming America into Venezuela will not be fun.