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Monday, December 09, 2019 {{ new Date().getDay() }}

Reprinted with permission from AlterNet.

 

While slashing taxes for some of the country’s most privileged, including Donald Trump and his family, the GOP’s seemingly unstoppable scheme to reform the tax code fail to address America’s most pressing problems: rising inequality, the climate crisis, macroeconomic instability and declining resources for needed public services in urban and rural America alike.

But progressives should resist the temptation to simply attack the GOP giveaway to the ultra-rich; Instead, they should articulate their own tax plan, one that would fund needed services, promote stable growth, and compensate the unlucky, including the victims of globalization.

We can have a tax system founded incoherent economic theory, a system that promotes fairness and economic efficiency by following three reasonable principles: all forms of income should be taxed equally, dangerous and destructive activities should be discouraged, and the distribution of income should reflect work rather than luck.

Ensure fair taxation of all forms of income: 

·      Tax all corporate profits regardless of where they are earned.  While keeping the corporate tax rate at 35%, eliminate the deferral of taxes on profits earned outside the United States. According to the Institute on Taxation and Economic Policy, corporations currently owe $700 billion in taxes on $2.6 trillion worth of profits, parked abroad in tax havens like the Cayman Islands.

·      Eliminate preference for investment over earned income. 
Since 1990, capital gains and some dividends are taxed at a lower rate than is earned income and wages.  While workers pay payroll taxes for Social Security and Medicare, and 25% income taxes on earnings above $37,651 and more on wage and salary income above $91,150,  capital gains income is taxed at 15% for most Americans, and no more than 20% for higher incomes. Eliminating this preferential treatment and taxing unearned income at the same rate as earned income would raise more than $100 billion a year in additional revenue.

·      Eliminate the tax preference for high wage income.  The retirement payroll tax that funds Social Security only applies to the first $118,500 of income so about 6 percent of wage and salaryearners only pay the tax, 12.4 percent, on part of their earnings.  Restoring the Social Security payroll tax for the richest 1 percent, those with wages and salaries above $300,000, would raise over $50 billion.

Promote economic efficiency:

·      Restore the Financial Transactions Tax and implement a financial excise tax.  Until 1966, the United States, like 30 other countries including the United Kingdom, Singapore and Switzerland, taxed financial transactions to discourage speculative financial activities that would distract from businesses’ productive work.  Taxing the giant banks would restore the economic balance, favoring the productive activities of Main Street over the financial shenanigans of Wall Street.  A tax like this would raise more than $100 billion while increasing economic efficiency.

·      Reduce the deductibility of low wages and strengthen the penalty for companies that do not provide health insurance or pension benefits.  The public safety net, including SNAP and Medicaid, bear much of the burden when profitable companies pay low wages. Forbes estimated that in 2014 low-wage workers at Walmart received more than $6 billion in public assistance; Connecticut taxpayers in 2015 payed nearly $500 million in public assistance to employees of profitable businesses., found a study by the University of Connecticut. Taxing low-wage employers would encourage higher wages while raising more than $14 billion in revenue.

·      Tax carbon emissions at $25/ton rising by $10/ton every year.  The build-up of carbon dioxide in the atmosphere from the burning of fossil fuels is already transforming the environment with devastating effects on crops, forests, and sea-side communities.  Charging for the damage done by burning carbon would slow global climate change and encourage the growth of energy efficient and green industries. It would also raise nearly $100 billion a year at $25/ton and more at higher rates.

Reward work not luck

·      Restore the 1980 estate tax rate (adjusted for inflation).  In 1980, the estate tax rate was 70% with an exemption (for gifts and estates) of about $1,000,000 in 2017 dollars.  At this level of exemption, more than 97% of estates would go untaxed because the great majority of Americans are not fortunate enough to be born into families with such large estates. Revenue would increase by more than $50 billion, the great majority paid by a very small number of very lucky people.

While promoting healthy and stable economic growth, this program would generate more than $500 billion a year in additional revenue.  If $400 billion of this revenue was devoted to eliminating income and payroll taxes for households with family income of under $75,000, then that would still leave $100 billion to spend on priorities like infrastructure and education.

Instead of the Republicans proposals designed to enrich a few, opponents can present a coherent program founded on principles of fairness. That is the tax reform that working Americans deserve. Tax reform that will truly make America great.

This story was supported by the Economic Hardship Reporting Project.

 

Gerald Friedman is a professor of economics at the University of Massachusetts at Amherst. This article was supported by the Economic Hardship Reporting Project.

 

 

If Boss Trump is headed for defeat, he's getting his revenge early. His revenge upon his deluded supporters and the people they love, that is. Trump's re-election campaign now consists mainly of what epidemiologists call "super-spreader" events: large-scale rallies of unmasked, non-socially distanced Trumpists yelling in each other's faces while the Big Man emits a non-stop barrage of falsehoods, exaggerations, and barefaced lies.

Let me put it this way: If, say, the Rolling Stones decided to put on free concerts at airports around the country, they'd likely end up being taken into custody and deported as undesirable aliens. Of course, they'd also draw far bigger crowds than Trump, but that's not the point. The point is that Trump's actions are reckless and immoral; the peacetime equivalent of war crimes.

"Covid, covid, covid, covid, covid," he hollers. Trump claims that the United States is "turning the corner" on the pandemic, and that the accursed news media will quit reporting Covid-19 fatalities come November 4. He claims that health officials are motivated by greed because "doctors get more money and hospitals get more money" if they report that the virus was the cause of death.

Surveys have shown that more than a thousand physicians and nurses have died fighting the disease nationwide.

As ever, what he accuses others of doing is an excellent guide to the question: What would Trump do? Answer: he'd steal the silver dollars off a Covid victim's eyes and demand an investigation of Joe Biden

According to the Washington Post, the Trump campaign organization signed an agreement with officials in Duluth, Minnesota to limit attendance at a September 30 fly-in rally, in accordance with public health guidelines. Hours before the event, it became clear that no effort was being made to honor the agreement; some 2500 Trump supporters bunched up without masks on the tarmac, ten times the agreed limit.

Health Department officials' protests were simply ignored. Three days later, Trump himself was taken to Walter Reed Hospital by helicopter. Three weeks after that, the following headline appeared in the Duluth News-Tribune: "St. Louis County sees another record-breaking week of COVID-19 cases."

Any questions?

The Trump Circus subsequently performed in Janesville and Waukesha, Wisconsin in the midst of a record-setting pandemic outbreak there. "It took us 7 and a half months to reach our first 100,000 cases, & only 36 days to reach our second," the Wisconsin Department of Health tweeted. "In just two short months, the 7-day average of new confirmed cases has risen 405%."

But the show must go on. Trump regaled his Janesville audience with a veritable torrent of lies. The New York Times did a thorough fact-check of his October 17 speech. Reporters documented 130 false statements during Trump's 87 minutes onstage. Nearly three-quarters of his factual claims were untrue. The most egregious concerned Covid-19, probably because the disease represents his single greatest failure and most damaging political liability.

Another question: Does Trump count upon his supporters' invincible ignorance or simply share it? I fear it's a little of both. In Janesville, Trump made this absurd claim two minutes into his harangue: "When you look at our numbers compared to what's going on in Europe and other places," he said "we're doing well."

Any regular newspaper reader knows that this is simply nonsense. As the Times reports, "America has more cases and deaths per capita than any major country in Europe but Spain and Belgium. The United States has just 4 percent of the world's population but accounts for almost a quarter of the global deaths from Covid-19."

Germany, to choose the most striking comparison, has suffered only 122 deaths per million of its population, according to Johns Hopkins University. The United States has recorded more than five times as many: 686 per million. Neighboring Canada, meanwhile, is at 264 per million. Several Asian countries, have handled the pandemic even better.

It's a matter of capable leadership and public cooperation.

No wonder Trump appears to have succumbed to a case of dictator envy. "COVID, COVID, COVID is being used by [the 'Fake News' media] in total coordination" he tweeted the other day "in order to change our great early election numbers. Should be an election law violation!"

Yeah, well they all report the same World Series scores too. Furthermore, if Trump had good election numbers, he wouldn't whine so much. Has there ever been a bigger crybaby in the White House?

(In related news, Vladimir Putin has issued a mandatory mask mandate after a surge in Russian Covid infections. Go figure.)

Meanwhile, the rallies go on; a bizarre spectacle people treat as if it's normal. Trump has become Covid-19's Typhoid Mary, an Irish cook who unwittingly infected 53 people back in 1906.

But unlike Mary, he should know better. If anybody should be locked up, as his rapt admirers chant, it's the Super-Spreader in Chief.