Poverty in America: Taxes

[Hannah Bell]

“The poor don’t pay taxes.”

It’s the boilerplate we’ve been force-fed since the 80's - but is it true?

First, who are “the poor”?

http://www.taxpolicycenter.org/numbers/displayatab.cfm?DocID=1818

According to the Tax Policy Center, they’re about 38 million “tax units” making under $18,725 a year and their dependents. This quintile of the population receives about 3.7% of all cash income.

“All cash income” is income from wages, retirement and pensions, interest, and capital gains - as well as income from “welfare,” workers’ compensation, veterans’ benefits, Social Security, energy assistance, and disability.

http://www.taxpolicycenter.org/numbers/displayatab.cfm?DocID=574

Let’s take federal taxes first.

Despite receiving an effective transfer of 3.2% of income tax, the lowest quintile still winds up paying a net .2% of all federal taxes.

One significant exclusion from this data, according to the note, is federal excise taxes. Excise taxes assessed on things like telephone use and gasoline tend to cost low-income people a higher percentage of their income than others.

Similary for many federally-assessed “fees” - taxes by another name. For example, federal child support enforcement services are most often used by low-income parents - mandatorily if parents receive federal aid. The government, however, takes a portion of what it collects as a fee - a perversely punishing way of “reducing the federal deficit”.

http://www.childsupportweb.com/childsupportblog/files/Reducing-Federal-Deficit-With-Child-Support-Fees.html.

A significant proportion of the federal taxes paid by the poor are payroll taxes, including Social Security taxes. Though these taxes weren’t originally designed to fund other federal budget items, the reality is that they increasingly do.

In 2007, 9% of non-Social Security federal expenditures were funded with excess Social Security collections and interest on the Social Security Trust Fund - about 25 cents of every dollar collected in SS taxes. Workers in the lowest income quintile paid 3.9% ($7.2 billion) of that 9%.

Worse still, low-income workers, because of lower life expectancy, are less likely as individuals to live to collect Social Security benefits.

http://www.cbo.gov/budget/data/historical.pdf

Most of the Trust Fund has accumulated since the Reagan years, when Social Security tax rates were deliberately raised to generate surpluses that could be used to offset tax cuts for corporations and high earners; a transfer from workers making less than $102,000 a year to the wealthy.

While there is still an overall progressivity in federal taxation, this is not so at the state and local level. Nationally, those in the lowest quintile pay, on average, over 11% of their income in state and local taxes, while those in the top 1% pay about 5.2%, once federal deductions are figured in.

http://www.itepnet.org/wp2000/us%20pr.pdf

How can this be true?

1. First, heavy reliance on sales and excise taxes. For example, my city has a sales and use tax of 7.6%. It applies to nearly every good or service except groceries. And in two states, as June 2008, even food was subject to full sales tax.

http://www.arisecitizens.org/Tax%20Reform/Off%20Balance%20fact%20sheet%20edit%20color%206-11-08.pdf

2. Second, unlike personal sales and excise taxes, property and income taxes can be deducted from federal taxes:

“On average, a fifth of all state personal income and individually-paid property taxes are “exported” to the federal government (and to taxpayers nationwide) as a result of these deductions. For the best-off state and local taxpayers, close to 40 percent of their state and local income and property tax bills are effectively paid by the federal government.”

http://www.itepnet.org/wp2000/us%20pr.pdf

3. Third, non-progressive income taxes:

“Another key contributor to the imbalance of Alabama’s tax system is its effectively flat income tax.... the state’s top rate of 5 percent kicks in on all taxable income of $6,000 or more for married couples. As a result, almost 80 percent of Alabama families pay at the state’s top rate...For the top 1 percent of earners, the state’s income taxes are the third lowest among the 42 states that have a broad-based income tax...for Alabama’s bottom fifth, the state’s income taxes are the nation’s third highest.”

http://www.arisecitizens.org/Tax%20Reform/Off%20Balance%20fact%20sheet%20edit%20color%206-11-08.pdf

4. Fourth, low income tax thresholds:

“In 16 states, the income tax threshold for a single-parent family of three (was) less than $14,675, less than the Census Bureau’s official poverty line for a family of three in 2003. In 18 states, the threshold for a two-parent family of four (was) below the $18,811 poverty line for such a family. Two states...impos(ed) income tax on very poor families, those with incomes less than one-half of the poverty line. Those states and six others...tax families of three with full-time minimum wage earnings.”

http://www.cbpp.org/4-8-04sfp.htm

5. Finally, “sin” taxes - on lotteries, cigarettes, alcohol - are paid disproportionately by poorer people. Washington State collected $435 million in tobacco taxes in 2007, enough to fund about 1.5% of its proposed 2007-2009 budget of 29-plus billion. With smokers - who tend to be poorer than average - less than 25% of the state’s population, that’s about $300 each. And increasingly we find “sin” funding schools and health care, essentials that used to be funded from ordinary revenues.

http://liq.wa.gov/releases/pr080724.asp

http://www.ofm.wa.gov/budget08/highlights/assets/pdf/highlights.pdf


For more than two decades, more of the burden of state and local taxes has been moving down the income distribution.

http://www.businessbookmall.com/Economics_33_Distributing_Income.htm

The percentage of taxes paid by corporations has declined, as have rates for the top fraction of individual payers.

http://www.cbpp.org/3-29-07tax.htm

In 1969, corporate income taxes were 19.6% of federal revenues, 3.9% of GDP. From 1981 to 2005, they ran 1.1% to 2.1% of GDP and 8 - 14% of revenues.

http://www.cbo.gov/budget/data/historical.pdf

Likewise, in the prosperous post-WWII years, top individual tax rates were 70-91%, and capital gains rates were 25-32%.

In recent decades, individual rates ran between 28-50%, and capital gains between 15-28%.

http://www.ctj.org/pdf/regcg.pdf

The poor DO pay taxes; but how much can they pay when they receive only 3.7% of national income? The poorest 20% of families today receives a smaller percentage of national income than in 1950. The rest has been transferred to the top, partly through changes in tax policy favoring the rich over the poor and middle, big capital over small capital and labor.

Contra the bright forecasts of the Reagan era, the payoff of the “cut taxes on wealth” policy has been flat wages, increased disparity between the rich and everyone else, more jobs shipped overseas, the destruction of infrastructure and social safety nets, increasing homelessness and social pathology, and a succession of bubble economies that now threaten to end in total meltdown.




Note:

For those inclined to think sin taxes don’t amount to much in comparison to the loudly and often-advertised social costs of “sin,” think again. The poor may sin more, but sinners don’t necessarily cost more:

“Lippiatt estimated that a 1 percent decline in cigarette sales increases costs for medical care by $405 million among persons 25 to 79 years old.2

Manning et al. argued that although smokers incur higher medical costs, these are balanced by tobacco taxes and by smokers' shorter life spans (and hence their lower use of pensions and nursing homes).3

Leu and Schaub showed that even when only health care expenditures are considered, the longer life expectancy of nonsmokers more than offsets their lower annual expenditures.4“

http://content.nejm.org/cgi/content/full/337/15/1052

[maryf]

1. Thank you for this Hannah Bell!

I was just discussing today that the only fair tax is a progressive income tax, I think, and one where the wealthy pay their fair proportion. Reading at another thread the Leona Helmsley quote that "only the poor pay taxes"; we have to get the people demanding fairer taxes!! Great research!!:yourock:

[smokey nj]

2. K&R!

[mntleo2]

3. May I link this?

This is awesome. :woohoo: :applause: :applause:

Love
Cat

[Hannah Bell]

17. It's OK by me, & I think OK with the originating website if you put:

"with permission of peoplesing.org" -

but check with JeffR.

[JeffR]

4. This is information so often overlooked in the dumbing down of

our perceptions about the poor and their relationship to the economy, a relationship skewed by wrongheaded government policy and unreported or misreported by the media.

If a fraction as much attention was paid to these issues as is paid to the endless whining about corporate taxes and the so-called "tax burden" of the wealthy, we'd be on our way toward a real economically progressive system.

Thanks for shining the light, Hannah Bell!

:applause:

[dajoki]

11. You are so right...

about the media and the lack of attention these issues get. They said nothing about how almost 70 percent of America's largest multinational corporations paid zero income taxes between 1998 and 2005. The total income of these corporations was more than $2.5 trillion. They move their profits to Bermuda and the Cayman Islands, out of the reach of the IRS.

Making things worse, bought and payed for politicians are now trying to fool the public with another one of their "Tax Holidays". The U.S. Chamber of Commerce wants to allow these corporations to move all of the trillions of dollars back into U.S. banks and when this happens they still will have no tax obligations on those trillions of dollars. On K street it is known as the "Tax Holding Reparations Act." All this information comes from the Government Accountability Office that conducted audits of more than a thousand U.S.-based multinational corporations.

I can't wait to see what the media says...I mean doesn't say about this.

http://www.gao.gov/products/GAO-08-778

[JeffR]

16. It's grimly funny that the word "Reparations" is used in that legislation.

"Reparations" describes exactly what these corporate vultures and their lapdog politicians owe the people. I won't hold my breath it'll ever happen, because as you note, what the media doesn't say about it will be a lot.

[dajoki]

21. That is darkly funny...

They've been ripping us off for decades and yet WE owe THEM reparations. I don't know whether to laugh or cry!!:rofl: :shrug: :cry:

[Hannah Bell]

168. that angle deserves its own op.

[bobbolink]

169. Yes, our dajoki is becoming quite the expert on these things!

Thanks again for such a thought-provoking essay, Hannah!

:applause:

[lumberjack_jeff]

18. The poor pay too much taxes... unless they have kids of course, in which case they need to pay more.

Damn "selfish, greedy breeders".

:sarcasm:

http://www.itepnet.org/whopays.htm

In 2003, it was found that in my state, The top 1% of income earners paid about 3.2% of their income in state and local tax. The bottom 20% pay 17.6%.

The situation has not improved since then.

[JeffR]

20. I'm sure it's measurably worse in the past 5 years.

Thanks for the link. Some very useful info there.

[mrreowwr_kittty]

116. As usual, you are twisting the story so you can play the martyr.

Parents who make $100K are NOT poor but you keep telling yourself they are.

[lumberjack_jeff]

133. You need to go re-read that thread. Pay particular attention to the number of times...

that the phrase "people shouldn't choose to have kids they can't afford" occurs.

[mrreowwr_kittty]

137. Well should they?

Let me first disclaim that I never said it because it's a dumb thing to say. People's circumstances can change.

However, since you are bringing it up: Is it a good idea for a person to choose (indicating a deliberate and voluntary decision - not an accident) to bring a child into the world knowing that they can't afford to take care of it? I'm not sure how often that situation happens, but assuming it happens at all, what say you?

[lumberjack_jeff]

138. No, probably not. But the relevant point to this thread is that no one is talking about 100k...

...incomes but you.

Fewer than one in five taxpayers with incomes over $100k take a child tax credit.
http://www.taxpolicycenter.org/numbers/displayatab.cfm?DocID=1848

Your whole argument boils down to a bias in search of an anecdote to justify it. How many opportunities should you be given to move the goal posts?

Families with dependent kids are significantly less likely to be affluent than other groups, and if the next generation is going to be adequately socialized, the most in need of support.

[mrreowwr_kittty]

139. Yes but families with children get ALL the support

You will find this out if you should ever fall into poverty after your children are grown. You will qualify for nothing. No welfare. No food stamps. No housing assistance. No state health assistance unless you are disabled, and even then you will get the bureaucratic runaround before you get it. Basically, if you are poor and don't have dependents you can fuck off and die.

I'm not bitter about the taxes I pay and I'm happy to contribute to the schools and programs to help kids. But I gotta tell you I'd be a helluva lot happier about it if I knew there was a safety net for me if I ever need one and right now I'm not too sure that there is. Maybe you should go back and reread that thread and see how many times I and other DUers point out how childless people get no help if we are in poverty only to have it completely ignored by parents who proceed to resume their lecture us about how hard and expensive it is to raise kids.

[lumberjack_jeff]

145. Help for the poor IS inadequate. That wasn't the point of that thread.

"Shouldn't people without kids get the tax breaks?"

The point of that thread is that kids (and their "jealous, bitter, greedy, breeder parents") get all the goodies.

If I'm still poor after the kids are grown (unlikely, because I'll have fewer constraints to limit work choices) I'll also have dramatically fewer expenses. People don't generally start building any meaningful net worth until they are in their 50's when the kids move out.

Kids are no cash cow. I won't "find out" how financially tough it is to live without them. I've been single, I've been married without kids, and now I'm married with kids. I know whereof I speak. Financially speaking, trading the $2000 tax credit for the expenses of having kids living at home is a no brainer.

Social policy is all about priorities. Child tax credits, WIC and SCHIP serve the social goal of creating a healthy, well-adapted and adequately nourished next generation.

"Fairness", promoting low birth rates, and providing an improved safety net for unemployed, disabled and underemployed adults is a different social policy, and IMHO, secondary.

[mrreowwr_kittty]

147. Wow.

The point of that thread is that kids (and their "jealous, bitter, greedy, breeder parents") get all the goodies.

That OP was about tax breaks and it is parents, not the kids, who get them. The parents are under no obligation to spend one penny of the money directly on their children. Not arguing whether that's right or wrong and it's really not that relevant to this discussion, but that is the fact.

If I'm still poor after the kids are grown (unlikely, because I'll have fewer constraints to limit work choices) I'll also have dramatically fewer expenses. People don't generally start building any meaningful net worth until they are in their 50's when the kids move out.

If you remain healthy and have marketable skills and people who are willing to hire you for a good wage, and a tidy nest egg, then you will not be in poverty and my hypothesis would not apply. Nice try at a diversion, but what I WAS talking about is a situation where you are unable to generate an income sufficient to meet your basic needs and would find it nearly impossible to get any government assistance because you don't have dependents. Let's deal with the example I gave you and not the scenario you want to argue. BTW, when you see a homeless person sleeping on the street do you think to yourself, "Boy is he lucky he doesn't have kids to support!" Or is there some point before that where you don't automatically assume that childless = financially secure?

Kids are no cash cow. I won't "find out" how financially tough it is to live without them. I've been single, I've been married without kids, and now I'm married with kids. I know whereof I speak. Financially speaking, trading the $2000 tax credit for the expenses of having kids living at home is a no brainer.

Another strawman. I never suggested that childlessness, in and of itself, is financially tough. And once again, I am not discussing the expenses of having children relative to not having them. I am discussing the fact that people without children are ineligible for most government programs that assist the poor.

Social policy is all about priorities. Child tax credits, WIC and SCHIP serve the social goal of creating a healthy, well-adapted and adequately nourished next generation.

The current generation deserves some consideration too. You are almost reminding me of an anti-choicer here. The difference being that while the anti-choicer only cares about human life from conception to birth, you at least extend that until they are 18.

"Fairness", promoting low birth rates, and providing an improved safety net for unemployed, disabled and underemployed adults is a different social policy, and IMHO, secondary.

Roger that. Fuck those worthless adults, it's all about the kids.

[lumberjack_jeff]

149. .

The parents are under no obligation to spend one penny of the money directly on their children.

You really should stick to things you know something about. Parents who refuse to expend their resources on their kids do not remain parents.

Let's deal with the example I gave you and not the scenario you want to argue. BTW, when you see a homeless person sleeping on the street do you think to yourself, "Boy is he lucky he doesn't have kids to support!" Or is there some point before that where you don't automatically assume that childless = financially secure?

There is no reason for me to assume that the person sleeping on the street doesn't have kids to support. In fact, I'd be willing to wager that many of them are homeless because, once their child support garnishment is withheld from their pay, there's not enough remaining to make working economically sensible. One thing I do know is that if I give said homeless person $5, he probably won't be required to split it three ways under penalty of law.

The difference being that while the anti-choicer only cares about human life from conception to birth, you at least extend that until they are 18.

...

Roger that. Fuck those worthless adults, it's all about the kids.

Society must carry the "worthless" adults (whether created through poor nutrition, drug use, inadequate education or poor life skills) all their lives. It's in our best interest to create as small proportion of them as possible.

And yes, I do care primarily about kids. Adults have some influence over their own experience. Unlike grownups, kids are a blank canvas. I will work to oppose greedy narcissists from screwing 'em up with their "Me me me!" graffiti.

You really should drop the "I like kids just fine" facade, it's pretty threadbare.

[mrreowwr_kittty]

153. I actually do like kids just fine

As I've stated repeatedly, it's whiny entitled parents who want to be worshipped that I can't stand.

There is no reason for me to assume that the person sleeping on the street doesn't have kids to support. In fact, I'd be willing to wager that many of them are homeless because, once their child support garnishment is withheld from their pay, there's not enough remaining to make working economically sensible. One thing I do know is that if I give said homeless person $5, he probably won't be required to split it three ways under penalty of law.

Oh, and I knew it wouldn't be long before you started talking some MRA shit. Ya know, for a guy who claims to "care primarily about kids" you're awfully bitter about men being expected to support the ones they help make. I find that highly amusing.

[lumberjack_jeff]

154. How? With ketchup? n/t

[mrreowwr_kittty]

155. **HEY EVERYONE!!** Lumberjack here resents that men have to pay child support!

:hi:

[lumberjack_jeff]

156. We'll have to trade recipes. My diet carries less risk of Kuru.

http://en.wikipedia.org/wiki/Kuru_(disease)

I hear that the nerological effects are quite debilitating.

[mrreowwr_kittty]

157. Does your diet cause you to resent supporting children that you fathered?

Because you might want to look into changing it. :shrug:

[lumberjack_jeff]

158. Life's too short.

Pat yourself on the back. You're in very select company, my ignore list now has a population of one.

But you really should let go of your animosity towards kids. That unpleasantness with Hansel and Gretel was oh, so long ago.

[mrreowwr_kittty]

159. Just as long as everyone knows how you feel about paying child support.

lumberjack_jeff: There is no reason for me to assume that the person sleeping on the street doesn't have kids to support. In fact, I'd be willing to wager that many of them are homeless because, once their child support garnishment is withheld from their pay, there's not enough remaining to make working economically sensible. One thing I do know is that if I give said homeless person $5, he probably won't be required to split it three ways under penalty of law.

[hay rick]

23. The media and our regressive tax system.

Willful ignorance of and/or indifference to our comparatively regressive tax system seems to be a litmus test required of those who aspire to talking head status in the Vast Wasteland. Inseperable companion to the inattention lavished on our tax system is the indifference accorded to the widening income and wealth gap between the rich and everyone else in the United States.

One of the curiosities of the recent presidential campaign was McCain's push at the end to paint Obama as a socialist, christening him the "redistributionist-in-chief." The media mostly parroted the talking point without bothering to mention that Obama's tax plan offered lower taxes than McCain's plan to 80% of the electorate. It was as if redistribution was visible only when it went from the wealthy few to the many. Redistribution in the other direction was deemed unremarkable and not worthy of notice or comment.

Thanks to the OP for a valuable post. k & r & bookmarked.

[JeffR]

24. Very good point about the campaign coverage.

The "discussions" about the candidates' respective tax plans were, at best, laughable and at worst, completely stupid. I can't remember it being so egregiously bad as it was in '08. Then again, I think the same thing with every election cycle. They'll continue the dumbing down, probably much more aggressively now with Democratic majorities in Congress and a Democrat in the White House. How low can the media go? Very, very low, and when they hit the ground, they'll just start digging.

[mntleo2]

46. And it is as if the poor could not understand this ...

...as if we who are low income are too DUMB to read the stats and realize that we are the ones holding up the rich. We already knew we were holing up the rich, as it always seems to be. All we needed were the stats. You know, once you realize how you've been duped by the press who refuses to tell the truth, the stats suddenly become VERY interesting.

Thanks for the links ...it is disgusting to know how the lies the media tells about who is more important to our revenue, who like to pretend that large corporations add anything to our communities except pollution, unemployment, and undue influence to our legislators. They add nothing and the rich not much more.

It is the poor and middle class who are holding up the economy and yet we are the ones who get the least consideration when it comes to legislation about how to spend the revenue WE have paid that would benefit us.

Cat In Seattle

[mntleo2]

47. Dupe ~ browser problem, lol

[rucognizant]

124. My oilman...........

made a great point of telling me that my "free" liheap oil was paid for by the taxpayers! These Mainers really begrudge their tax money. Yet they can't seem to see the basic inequity!
I misread his opinion on Hugo CHavez' free oil gift the past 2 years, thinking it was a matter of nationalism and he would be glad the gift wasn't forthcoming this year.....
Nosir! He LIKED the idea of that socialist, taking up some of the burden instead of out of HIS pockets!
To make matters worse..........the state has made it law that liheap recipients get their oil for a few cents cheaper. Fortunately he is an honorable man.......so he grouses but does the right thing!
Re cigarettes! There was an overeager hiker, a few years ago who tried to climb a frozen waterfall fell broke his back and is parylized for the rest of his life. They ran bean suppers and fund raisers for his wife and kids now without income and with high medical expenses! Bet his medical expenses will run a lot higher than a smokers!
(Being near Acadia I hear a lot of foolish risk taking resulting in major injuries..all in the name of "healthy" recreation!

[cascadiance]

5. And health flex spending accounts probably work against the poor more too...

If you have someone managing your accounts, as the wealthy do, one probably has more of an accurate notion of how much one pays for medical expenses, and therefore how much to have put in to the health savings account to get tax free treatment of medical expenses.

However, these private firms that manage these accounts probably RELY on those with less means and organization messing up on either a) calculating appropriately in advance how much their medical expenses will be so that they don't "overdo" what they should put in these accounts and wind up losing the money or spending it more on less useful "medical" stuff to get their money back near the end of the year, and b) not having the time and organization to properly file and get in their receipts to get their money back.

Health care reform should also take these middlemen out as well that run these programs. Their profits shouldn't be determined by how much money they can "welch" out of people that don't have time or resources to manage using such accounts properly (and getting tax free benefits from them).

[maryf]

8. It costs so much more to be poor...

More taxes percentage wise, more in healthcare (those not insured pay much more than the insurance companies pay for the same services, ever notice?), more in everything in which you save by buying in quantity...Its just really expensive to be poor...unfairly so..

[mntleo2]

49. more in "penalties," more for rent, more for food ...

...the poor pay a great deal for necessities. As you say we cannot buy in bulk (too expensive to pay that much at once). We drive old gas guzzling cars because we could not afford the "efficient" newer ones (for repairs as well as for just driving. Repairs on newer computerized cars is astronomical). We have to pay higher energy costs at home because we are renters, we will never get the more efficient heating and cooking units, and our landlords will not insulate (most don't because energy makeovers refuse to directly help the poor and the laughable "tax break" landlords would get for doing it, is not any help). We are more apt to have to pay fines because, since we live so close to the bottom line it is impossible to save anything and so we have to wait until payday to pay off our phone, licenses, and other bills ~ added to the already regressive taxes that are killing us and our ability to provide for our families.

Just thought I would add a few things about how expensive it is to be poor...


Love
Cat

[Greyhound]

65. I find the fact that so many see no problem with the obscenity of a self-funded

savings account that you forfeit if you don't use it to be indicative of just how far we've fallen.
:kick: & R

[I Have A Dream]

6. Thank you, Hannah Bell, for putting these facts on the table...

during Poverty Awareness Month. This is very important information.

Kicked & recommended!

[NanceGreggs]

7. Oh, yeah!!!

:kick: :kick: :kick:

[dajoki]

9. Excellent post Hannah Bell...

As you said, many people THINK that the poor don't pay taxes, how wrong they are!! You listed many great examples of the HIDDEN taxes which overwhelmingly fall on the shoulders of the poor. From income taxes, payroll taxes, tariffs, sales taxes, sin taxes, and the list goes on. Its more like the Queen of mean, Leona Helmsley once told her maid, "Only the poor PAY taxes".

K&R

[DBoon]

10. so what if the poor don't pay taxes?

They are poor after all.

Are people who are living at the margin of survival supposed to pay taxes, too?

I'd rather be rich and pay taxes than be poor and pay none.

[dajoki]

12. But they do pay taxes...

Did you read the OP?

[DBoon]

13. Yes I read it. Even if they didn't pay taxes

I would not begrudge them that, given how hard it is to be poor.

Would you expect a starving man to give blood?

Not only should the poor NOT pay taxes, they should get money back through the tax system.

That was Milton Friedman's idea of the negative income tax (yes, that Milton Friedman).

Richard Nixon almost got that one passed.

[dajoki]

19. You said it like you thought...

that the poor DIDN'T pay taxes. Maybe I misunderstood because I agree with you that the poor should get money back through the tax system. Its just that percentage wise and because all of those "hidden" taxes, the poor have more of the tax burden than the wealthy. Sorry if I misunderstood you.

[Baby Snooks]

99. Parity

I think that is what Milton Friedman's aim was - to provide parity to replace welfare. To guarantee an income level for all. But it failed for the unfortunately obvious reason, at least at that time, that too many simply would work as little as they needed to if at all. But it was a good idea and still is. Clinton's "welfare reform" was based on the same idea. If you get benefits, you should work for them. Personally I liked Milton Friedman's approach better. Even if a great majority didn't work, the extra amount of money it would cost to guarantee parity would be surpassed by the savings in dissolving the biggest bureaucacy of all which is our "welfare" system. The reality of our "welfare" system is it has always been designed merely to keep people in poverty and to keep them "in their place" and anyone who thinks different has never really looked at it.

And for those who earn above the threshold, there should be a regressive flat tax without exemptions. Maybe a maximum of 50%. If you are earning $1,000,000 a year and can't live on $500,000 a year I would suggest you need to get rid of a home or two or at least a Hummer or two. And there are quite a few making $1,000,000 a year who probably are not even paying 25% in taxes. Someone pointed out that presidents always seem to be paying a "fair" amount of taxes but of course we don't know what they were paying before they decided to run and knew they would have to make disclosure and how much they are paying after they left office and no longer have to make disclosure. And we don't, do we?

Of course we have a good idea from Bill Clinton. He probably really doesn't like being called Bubba of Arabia. Too bad.

By the way I have noticed through the years that those who complain the most about "taxes" are those who inherited the money that provides the income that they don't want to pay taxes on. All the while talking about how lazy people who are on welfare are. Democrats and Republicans. Most of whom really don't know what it is to really have to work for an income. Those who have done well and worked their way to having done well don't seem to mind as much - perhaps because as they paid more they were still making more and relatively speaking didn't mind so much given the option and given the memory of the option.

Something's gotta give. And what's gotta give are those who give very little in the way of taxes. As things stand, the rich still get richer, the poor just get poorer and more and more Americans are ending up homeless. And if you think the homeless get something, think again. Most who end up homeless remain homeless. And without benefits of any kind apart from Medicaid and what little SSI they might be able to get. And that is a nightmare those who are needing extended unemployment benefits are facing. When the weekly check is gone, they will have no income. And will become homeless very quickly in most cases.

We have to find a better way to take care of our poor which is really at this point taking care of ourselves.

Maybe a little of Milton Friedman, a little of Bill Clinton, and a lot of other people who through the years have proposed ways to get rid of the bureaucracy that in many ways is the biggest crack that most fall through in this country on their way to becoming jobless and homeless.

I have always been "self-employed" and also had a trust that went under when the bank went under and believe me when I say that you do not get it back and are lucky if you get anything back which in most cases you don't. I know two people who lost it all to Bernie Madoff. They will get something back. But comparatively speaking they will not get it back and they are not going to be able to earn it back either. It's just gone. Both worked hard and saved hard and trusted someone they shouldn't have trusted. And face a reality that is very harsh. No job, no real marketable skills because they haven't worked in a long time, and no income. And no benefits to "get them through" until they can get back on their feet. Reality is sometimes you not only don't get it back you also don't get back on your feet. As it was, both people I knew were barely covering everything. There were lots of "small" investors as well who just wanted an extra couple of thousand a year in retirement income. That's not greed. That's reality. We all "shop" for the better interest rates. Which is what they did. Suddenly they are greedy. I really don't like the way we blame victims in this country for becoming victims. The people who do so are most likely victimizers themselves. And don't like the mirror.

They could have put their money with Morgan Stanley or Merrill Lynch. And still lost it all. Quite a few did. They are not called greedy. Only the people who lost it all with Bernie Madoff. I really haven't figured that one out. I don't know that I want to. I suspect it has to do with his being Jewish and most of his clients being Jewish. No matter how well we hide our prejudices, they always seem to be there in this country.

Unemployment benefits are supposed to help those who lose their income to cover their bills until they can get back on their feet. But some don't qualify. I have never qualified for unemployment benefits. There are quite a few unemployed people who are not on unemployment because they don't qualify. And as a result I have never qualified for much of anything else. Neither do they. And so I live from month to month not knowing if the current month is the last month I will have a roof over my head. I don't even have a crack to fall through. It's quite scary. Even when you get used to it. Not that you ever do. Something the two people I know who lost it all to Bernie Madoff are going to discover the joy of. It is not pleasant. Made more unpleasant by the attitudes of people who think you are just lazy. Or were just greedy.

There must be a better way. As for Barack Obama's offer of $500 extra this year, who is he kidding?

[Hannah Bell]

28. it's "so what" to me, too. but it's a wingnut talking point, & based on the idea

that poor people don't pay taxes, they often go on to other talking points, i.e. poor people should have no voice in how tax money is spent, since "it's not their money". i.e. the poor aren't full citizens.

and this, i think, is a very pernicious tendency.

[Hannah Bell]

14. Forgot this in the post: "Essay reposted in full by permission of peoplesing.org"

Caught it past the edit deadline.

[saltpoint]

15. Very nicely done. Recommended on its own merits, which are

considerable, and for the timing -- the week running up to the weekend of the celebration of Dr. King's birthday.

[ColbertWatcher]

22. Another great thread, Hannah Bell! Kick and rec, n/t

[leftstreet]

25. K&R

Thank you for putting all this together

[JeffR]

26. Kick

for a very important post.

[JeffR]

27. Kicking again.

G'night!

[wellstone dem]

29. what a fascinating article. Thank you. It provides an excellent

response for those who say, "Why should the poorest get a tax cut? They don't pay taxes." Now I can say, "Yes they do!"

[bobbolink]

56. Thank you for speaking out! A bit of knowledge really helps, doesn't it?

What I don't understand is why this awareness isn't common knowledge among "progressives"!

We've been ignored..... :cry:

[blindpig]

30. K&R

A stick in the eye to those haughty, cold-blooded bastards who argue the elitists poison gibberish which demeans and relegates to the trash bin our brothers and sisters who are the greatest victims of our vicious, unjust economic system.

[Bluenorthwest]

31. Now here is a post worth reading and bookmarking

Thanks for posting all of this HannaBell. A true service. Poverty issues are ignored by the media and must be brought forth by idividuals and small groups. People like you. Poverty issues should be our number one priority.
I'd like to add two other groups that most Americans think pay no income tax. The elderly and disabled. While perhaps not always statistically poor, these groups have greater needs in many areas, and many pay income tax with money that should be available for medical and other expenses. Yes, I am talking about people above the 'poverty line' numbers. But almost every week I hear an otherwise thoughtful and aware person declare that elderly people and disabled people pay no income tax. Just this week on DU a poster made the great point that both groups pay all those sales and hidden taxes, but also thought no income tax. At least on third of Social Security recipients pay income tax on all or part of that benefit, and that includes people who use wheel chairs and the works. Foks who can not walk, pay income tax. The rest of America needs to know that, and treat Gran and the guy on the bus lift with respect.
Obama had talked about removing the Federal Income tax from Social Security beneficiaries making under 50,000 a year. I hope he does that, as it would be fair, it would save lives and take burdens away from organizations that wind up paying for what could have been purchased with the tax money. Tht leaves organizations more money to help those who actually lack the income.
But most of all, I just want people to know that when they see a disabled person on the street, or an elder, that they are looking at a taxpayer. When they see a poor person, they are looking at a tax paying citizen as well. All of us pay taxes. Except the Corporations.
Peace to all!

[dajoki]

50. Thanks for pointing this out...

Also many people who are disabled do not qualify for any kind of aid or assistance because they are just a hair above the poverty line.(and I don't even want to get started on how outdated the poverty measurements are, that'll be for another day) Anyway some get "too much" to qualify, but not nearly enough to make it through the month. Just because you are disabled, the bills don't go away, in fact they increase with all the medical expenses. But just because someone in the government picks what seems like an arbitrary number, there are a very large group of Americans who are always dealing with having their electricity, water, telephone, etc. disconnected. There needs to be some changes to the way we measure poverty!!

[jwirr]

32. It is still a valid argument when anyone claims that the tax cuts that

are in the stimulus plan will help the working poor. Sure we pay all the so called "hidden" taxes that everyone else does and even some that only the poor pay like copays on medical services. But for the most part we do not pay INCOME tax - rather we apply for the earned income credit. When people say the poor do not pay taxes they are most often referring to INCOME taxes.

[dajoki]

33. You need a dependant child...

to qualify for the earned income credit, so not everyone can get it.

[jwirr]

34. Not always. The disabled and elderly are also eligible. I have gotten

it that way. My point is that they need to extend this program in the stimulus or it is not going to help most of us down here on the bottom.

[dajoki]

39. How did you...

get it that way? I am disabled and I can't get it. When my children were younger and living at home I got it, but I never saw anything on that form that would lead me to believe you can qualify without a dependant child. Also Social Security income is NOT qualifying income for that credit, it must be WORK earnings. If you did get the EITC, PLEASE let me know how you did it so I can try.

[Kindigger]

40. Someone can explain it to me also

I just went over to IRS site, and it calls Long-term disability benefits (between age 25-62) 'taxable earned income'. Huh? :shrug:

[dajoki]

41. Look at the...

EITC form and you will see that SSDI is not considered qualifying income for the credit.

[dajoki]

44. From what I could see...

it looks like you can get it if you're on SSDI and are also working at least part time and some other restrictions.

[jwirr]

90. I get minimum social security and some of my income is SSI.

[dajoki]

109. Thank you...

I get SSDI and my wife works so I'll have to check it out.

[hfojvt]

53. no, you can get a credit with no children

if your income is less than $12,880. I, myself, will be getting about $69 this year.

[dajoki]

55. Thanks...

that's good to know, but do you know what the income limit for a married couple is?

[maryf]

37. Pointing to

The conclusion that only progressive income tax is fair...all other taxes, hidden fees, etc. penalize the poor most heavily...

[gollygee]

35. We love regressive taxes in this country

I assume because it shifts the burden away from the people who set policies to people who don't have enough of a voice.

Hey, how about if we raise the gas tax $1 a gallon?? (/sarcasm)

[maryf]

38. We gotta be the voice

for the disenfranchised!!

[gollygee]

42. I agree but when I look at DU

I see threads about raising the gas tax by astronomical amounts, and about ending property tax (which is progressive) and replacing it with a tax of $1,000 per child. I agree that the current school tax system isn't working, but because rich areas have more property tax money to work with so rich areas have better schools - NOT because property taxes need to be replaced with a regressive tax. We need to find a way to make school funding equitable without causing such a tremendous burden for the poor.

[bobbolink]

58. THANK you for understanding that hurtful effect of raising gas taxes!

I get furious with the lack of understanding, and CARING about how it affects poor folk!


Thank you! :toast:

[maryf]

60. Progressive income tax

Is the only fair tax, property tax is not fair, especially in my neck of the woods, because many elderly are getting taxed out of the houses they've lived in all their lives, ...A way to make sure only the well-off have the property...

[gollygee]

74. $1,000 a kid, regardless of how much money you have, is even more regressive

and less fair. Can you imagine a low income family having to come up with $1,000 a kid each year in order to send their kids to school? They wouldn't be able to afford it. Nor would they be able to afford the daycare they'd need in lieu of their kids being in school. Crazy.

[dajoki]

144. I didn't see anyone suggest that n/t

[gollygee]

148. There was a thread suggesting it a few days ago

It was a pretty popular thread.

Whoops - I found it and it was a reply to that thread. http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=4800652&mesg_id=4800731 I was surprised to see a suggestion like that here.

[dajoki]

150. Yes, that is a ridiculous suggestion n/t

[dajoki]

63. Property tax rebates do not really help the poor...

In PA we have "property tax rebates" for the elderly and disabled, I find a few things wrong with our system. All taxes must be paid in full for the year to be eligible for the rebate. Do you realize how many people that causes to be ineligible for the rebate? Most people I know who would otherwise qualify for the rebate cannot afford to pay these taxes in full in the allotted time, therefore they get no rebate and also must pay a penalty.

I believe they could come up with something better if they wanted to, such as being able to figure your rebate into your tax bill up front, that way it wouldn't be such a burden on the poorest people who can't afford to pay their taxes in the time allowed.

Also this discriminates against those low income families that do not fall into the two groups I mentioned. The seniors and disabled rebate is all figured on income, so why can't other low income people get that benefit? Something is wrong with that, only certain groups of people qualify, while others in the same situation or worse cannot. I would like to hear the policies on this in other states. Anyone?

[maryf]

71. In NYS

There is a STAR program whereby the taxes are discounted, but this is only for the school tax part of the property tax, and while it helps, its just not enough.

[dajoki]

110. Yeah, in PA...

we have a "homestead exemption" that amounts to $62 a year in my district, which isn't much help.

[Hannah Bell]

80. that flabbergasted me too - since the wealthy own most of the property!

but understandable, as groups further down seem to be taxed on their property at higher rates in comparison with their income.

[gollygee]

93. I agree there should be a change, but the suggested change is evern worse

$1,000 a child tax every year is not an improvement. I'm pretty comfortable and my property tax is only $2,500 a year. Imagine someone living in poverty with three kids.

[maryf]

104. Income isn't even considered

with Property tax that I've ever heard of...people used to be able to afford houses, now those folks are mostly elderly...

[TahitiNut]

82. Really? Just because an increased SCHIP is supposed to be paid by an increased tobacco tax???

Tax alcohol! Tax gasoline! Tax cigarettes!

Guess which one keeps on passing? Guess which one is DU's favorite?

:eyes: :eyes:

I won't hold my breath waiting for our 'leaders' to impose a sales tax on the sale or exchange of corporate stock, though.

[maryf]

36. Another kick for importance!

:kick:

[mntleo2]

43. Not a "Sexy" Subject But SO True!

...I am sad to say. Taxes are such a snarl of regulations that it often is hard to understand.

Today I am speaking at a conference around poverty with the Catholic church and I plan to mention this article and the work this group is doing to call attention to the truth about poverty in America. I hope to take some of these stats with me to show that the poor are greater citizens than most rich people as we pay more taxes and the highest price for our communities.

Take care and while I am gone I hope this article is caught up and sent around the Net!

Love,
Cat in Seattle

[acmavm]

45. THE RICH DON'T EITHER!! Look at this for a second to see how long

this scandal has been an 'open' secret:

http://www.time.com/time/magazine/article/0,9171,909097,00.html

Monday, March 16 1970

AS the law now stands, a U.S. citizen who has a substantial amount of cash that he wants to hide from the Internal Revenue Service has no real problem. He can take it out of the country, entirely legally, deposit it in a secret Swiss bank account, then arrange to have the bank return it as a foreign "loan"—and defy the IRS to say it is not. That is only one of the milder variants of a sophisticated array of illegal ploys that have been made increasingly easier in recent years by the proliferation of Swiss banks in the U.S. and U.S. banks in Switzerland and the Bahamas. U.S. officials most intimately concerned with the problem conservatively estimate that the misuse of secret bank accounts may be draining the nation of hundreds of millions of dollars a year.


<snip>
At the same time, major U.S. banks —the Bank of America, Chase Manhattan and First National City—have set up shop in Switzerland, a move that entitles their Swiss branches to all the protection and secrecy of Swiss banking law. In several Swiss cities, the largest volume of business is done by the local branches of American banks. Americans now own or control several banks in Switzerland and in the Bahamas, which offers an equally attractive haven of secrecy and now has 52 banks for a population of 180,000.
-MORE MORE MORE-

_---------------------------------------------_

JULY 18, 2008 UBS Move Will Affect U.S. Clients
Private Bankers Will Stop Offering Some Swiss Services

http://online.wsj.com/article/SB121631085489462359.html

AG said some Swiss-based private bankers will stop offering American clients Swiss bank accounts and other services, as the bank tries to repair its reputation amid U.S. investigations into allegations it helped its American clients evade taxes.

The move, which UBS had begun last fall and accelerated recently amid the stepped-up U.S. investigations, will affect some 20,000 U.S. clients with about $20 billion in assets held in Swiss accounts. The accounts affected are those handled by non-U.S.-regulated Swiss private bankers.

Those clients will be told to use U.S.-based accounts or one of UBS's international units -- ...

_--------------------------------------_

That was just the first thing that popped into my mind.

**I'll be back. I'm sick today and I have to go in the other room and have a conversation with RALLLLLPPPPPPHHHHHH!!

[maryf]

62. Get better!!

Tell Ralph to take a hike!!

[Baby Snooks]

48. The rich get richer, the poor get poorer...

And the reality is that as long as there are rich Democrats in Congress along with rich Republicans, nothing will change. Greed, as pointed out by Benjamin Franklin, is one of the most basic, if not the most basic, human "virtues" as reflected by Congress.

Reality is we have gone from "by the people, for the people" to "by the corporation, for the corporation" to "by the crooks, for the crooks." More or less just as Benjamin Franklin said we would.

[bobbolink]

67. You're so right! We can't let "our own" off the hook...not when so many suffer the consequences!

Right here in Colorado, one of the causes of homelessness is the lack of tenant protection. Colorado ranks with Arkansas as the only TWO states that have NO protection for tenants when the unit isn't habitable!!!

All these years, Republicans were blamed for this, as they were the majority in our Legislature. However, now the Dems are in charge, and a Dem gov, yet they couldn't pass a decent tenant protection law.

Why?

Because many of the Dems in the legislature are LANDLORDS, and like their POWER.

:nuke:

[Baby Snooks]

76. And in Texas...

We just re-elected a state representative despite even the media calling him what he is - a slum landlord. But he was the Democrat. And we all know we must vote for the Democrat!

Most states have apartment associations which are very powerful. And stand behind the landlords. Even the slum landlords. Few states if any really have any enforceable rights for tenants. Most get evicted and in the process of being evicted are told by the judge they can always sue the landlord. Would be easier if the judge just enforced the law.

[redqueen]

51. Thank you.

K&R

[G_j]

52. excellent post

thanks for taking the time to put this together.
:yourock:

[varelse]

54. K&R

Excellent, fact and resource-filled essay. Thank you.

Do you believe that the Tax Policy Center's definition of the poor is adequate? It seems in need of some adjustment, imo. I'm fairly sure that there are more than 38 million "tax units" (what a way to describe people - bleh) living in poverty now, if poverty is defined as not having sufficient income to meet basic needs...

[bobbolink]

57. very good point...... and I think it's the subject of an upcoming essay...

:hi:

Wanna write it? :)

Seriously, the "poverty level" is a serious misunderstanding.

"if poverty is defined as not having sufficient income to meet basic needs..."

EXCELLENT, a very good link to the first article in this January series:
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x4754889

[dajoki]

59. That is definately a big problem...

the poverty measurement was developed back in the early 1960's and has been basically unchanged since then. I have read reports that the income level for people to just get by should be double what the poverty level is.

[Blue_In_AK]

61. K&R

[yellerpup]

64. Thank you for this excellent work, Hannah Bell.

There is nothing better than facts and figures to refute prejudice and unsupported opinion. This is a great post. K&R! :kick: :kick: :kick:

[bobbolink]

66. Previous essay here... Don't Miss It!

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x4754889

If you'd like to sport the banner for this month, pleeez contact JeffR... He did the new design! :applause:

[Tindalos]

68. The poor end up carrying most of the "weight" of society

It's such a scam. A few rich people have convinced everyone else to carry their share for them and the worst part is that many people don't even realize it's happening. If more people were aware of the discrepancies, then maybe it would be easier to change things.

Thanks for writing about this, Hannah Bell.

[GoddessOfGuinness]

69. K&R

[Ocracoker16]

70. Excellent Work

This post provides excellent insight into how our tax system manages to basically rob the poor. You summarize all of this information well. I appreciate the links you give. Right now, I am just trying to digest the content of the essay, but I am sure I will explore those links to enhance my understanding later.

I am concerned that the media is complicit in the government's attempt to tax the poor unfairly, because the media does not provide this information to Americans. Most people think that the poor people don't pay taxes and would be shocked to learn that they actually pay a greater percentage of their income in taxes.

Thank you so much for writing this. It is my hope that many people will read it. Therefore, I am recommending this.

[bobbolink]

73. Thank you so much for taking the time to digest this!

It's something that all progressives should be well aware of, but it has been neglected.

Hannah has performed a most important service!

Thanks to both of you! :toast:

[Waiting For Everyman]

72. Thank you for some great information there, Hannah Bell!

The bottom tier needs some hefty tax relief and a big boost in the minimum wage. Anybody who works full time should make enough "take home" to get by at a minimal level wherever they live... rent, food, transportation, medical, child care, etc. We should SET IT that way, with real automatic COLAs. Making less than that should be the poverty line. We have definitions like that which have nothing to do with reality. There should be no such thing as the "working poor".

We should tax mega-salaries (8-9 digits) as we used to at a high enough level until that practice STOPS, and get the tax burden completely off of those making the least or nothing at all, who are trying to begin or solidify their foothold on a stable life. The bottom rung can't afford to put any relief they get into savings, they have a long list of pent up NEEDS which could significantly help our recovery. They have been impoverished out of the economy for far too long, and that has cost JOBS in every sector.

"Redistribution" has been going from the poor to the top for decades. Now that needs some fast correction. Otherwise, our economy will not improve. Too many people have been bled dry, for too long. And for what? Only to unjustly enrich the already-wealthy who had no legitimate claim on what they took from the poor by underpaying wages and shifting the burdens to them, while at the same time they were dodging their own fair share of tax responsibility - those who profit the most from the system should support it the most. Which brings me to the most abusive and biggest transfer of wealth of all...

Another unnoticed "tax" is the UNBELIEVABLE amount which the poor pay in penalties, late fees, services charges and most of all UNJUSTIFIED EXCESS INTEREST. That, is how the super-rich got that way - if not directly then indirectly. Taxing it and returning it back where it came from is the only right or healthy thing to do.

What the mega-rich do with their ill-gotten gains? They fund their undue influence, to do more of the same. We have created our own monster by abusing the poor. Even if people have no empathy or sense of justice, they should recognize that it's against their own interest.

[bobbolink]

75. Did you know that disabled people on SSI didn't recieve ANY from the "stimulus package"

last year??

NOTHING.

NADA.

ZIP.

ZILCH.

How's that for "fair"???

[Waiting For Everyman]

81. And they would've spent it right into the economy, too.

Actually I did know that, only because my late husband was on SSI and VA disability, and I thought about that glaring oversight right away when the stimulus was announced. It's sad, and very frustrating, that the lawmakers and even their staffs are so far above any experience at the bottom, that they don't know practical ways to achieve their own goals.

That's what I worry about the most now. They don't listen enough to people who really have the first-hand experience to know what the problems and solutions are. Instead, they'll fund a commission or something to look into it, which again are all well-paid people who don't have a clue.

I wonder if they know that today, a lot of poor people are even denied bank accounts?

[dajoki]

115. I remember that well...

and I remember being extremely angry, the people who need it the most and would use it the most were ignored. And our DEMS let it happen!!

[Raksha]

142. About those damn late penalties and fees...

TELL ME ABOUT IT!!! I recently applied for a financial hardship exemption for an offset to an old parent loan for my son. They have been deducting it from my Social Security--$191.00 per month (15%). To qualify for this exemption I had to document my monthly expenses.

Three items on my list: $35.00 bank overdraft fee. $35.30 interest on a $200 "payday advance" loan, necessary because I had a couple of utility bills that wouldn't wait. They were threatening to shut off my electricity and water. $40.00 late charge on my rent, which I pay almost EVERY month. I get my Social Security benefit on the second Wednesday of the month but my rent is due on the first. My landlord knows this, but refuses to change the date my rent is due to the middle of the month. He says he has to pay the mortgage on the first.

So that adds up to $110.30 that I had to pay in November JUST for the "crime" of being poor and living from hand to mouth. And it doesn't even include the late charges added to my utility bills.

Re Another unnoticed "tax" is the UNBELIEVABLE amount which the poor pay in penalties, late fees, services charges and most of all UNJUSTIFIED EXCESS INTEREST. That, is how the super-rich got that way - if not directly then indirectly. Taxing it and returning it back where it came from is the only right or healthy thing to do.

[Raksha]

143. Duplicate post - sorry about that!

[BrklynLiberal]

77. Thanks. A superb, and very upsetting analysis.

[azmouse]

78. Read and bookmarked

Thank you for the excellent info.

[bobbolink]

79. There will be a quiz...

:hi:

[azmouse]

83. No one told me there'd be a pop quiz!

[TahitiNut]

84. Nobody expects the (Spanish) Inquisition.

:dunce:

[azmouse]

85. It's a full moon tonight, no telling what might happen!

:scared:



:hi:

[VPStoltz]

86. It would seen corporations in many cases pay LESS then the poor!

See: http://www.cbpp.org/10-27-08tax.htm

[maryf]

105. interesting link

The spin of statistics is really used to full advantage by the corporations...

[dajoki]

113. Wow!!

These tax breaks lead to very low tax rates on certain types of investments — even negative rates in some cases. For example, a 2005 Congressional Budget Office study found that the effective marginal corporate rate — the rate paid on the last dollar of income earned and arguably the tax rate most relevant for investment decisions — on debt-financed investment in machinery was negative, estimated at -46 percent.<4> This means that the total value of the deductions that companies may claim for such investment is much larger than the tax they pay. (Put another way, it means that other taxpayers effectively subsidize the investment.) A recent Government Accountability Office study similarly found wide variation in effective tax rates across corporations.

Yeah, that makes sense.:sarcasm:

[Hannah Bell]

120. The other side of the story - like the info above - deserves its own essay, I think.

[The Doctor.]

87. K+R.

[valerief]

88. And don't even get into that money-laundering system they've got called the Pentagon.

Oy vey!

When money is the only thing in this world that's valued, those without money will always be devalued.

[bobbolink]

89. Here's a personal example: I'm homeless. I pay a tax with every purchase I make

that funds the buying of property for the county "Open Space Parks" program.

Other than the fact that I can't afford to let go of ANY pennies, and shouldn't have to, I can make use of the parks. There are some poor folk who can't... either housebound or working two jobs to try to survive and don't have the time... it's simply not right.

HOWEVER, it also funds the local and very upscale recreation center. All I can do there is use the restroom when I'm in that area. I can't afford the classes, or the pool, etc.

NOW.. why is it that a homeless person is funding a building for the well-to-do?????

[Trillo]

91. One hopes that all these user fee and sin tax injustices can be transformed.

One also hopes there is still real, as opposed to illusory, hope.

When I read about the plight of poor folks in other areas of the world, I realize their "prisons" are little different from our own: It seems that ours are just more elaborately masked or hidden. If we can't transform our own war against our own, if we can't truly enact a just system of rewards here, I'm afraid our future "prison" looks much like theirs.

[enuegii]

92. A couple of more things about Alabama...

If you receive a refund on your Federal income tax, you are required to list that as earned income on your state tax return for the following year. If you are well off enough to have to pay federal tax, you can deduct the amount on your state return. And, yes, Alabama is one of the two states that charge full sales tax on food.
Also, with its highest in the nation alcohol tax rate, if everybody in Alabama quit drinking tomorrow, the state government would collapse in short order.
But, hey, ya gotta make up for the obscene tax breaks for Mercedes and Toyota, plus maintain cheap property taxes for the paper companies somehow, I guess!

[dajoki]

136. And I thought...

PA was the land of taxes, I think you guys might have us beat. But a little story. A friend of mine, like many people up here, was buying cigarettes from an Indian reservation. He was getting them for less than $2 a pack, as opposed to the $4 price you pay here. Well, the state somehow caught him and he must now pay around $5000 back to PA for smoking taxes OR they will TAKE HIS HOUSE. This guy lives on Social Security and he is now struggling to make the payments they set up for him and pay his regular bills.

If they(the state)would only devote that much time and energy going after the big guys(corporations)that don't even pay taxes, instead of picking on the little guy, the state wouldn't have to shut down if everybody quit smoking!!

[JeffR]

94. Kicking!

:kick:

[4 t 4]

96. k&r this should be sent to all news networks

because up until Friday they were still touting bullshit on this topic. How can you give tax credits to people that don't pay tax ? Isn't that just welfare.Blah blah blah

[bobbolink]

97. It would be great if you would head up an effort to do just that!!!

Yes, we need to PUSH this!

:toast:

[4 t 4]

101. I will do that

as long as there is no problem sending it out and it sounds like it is fine. I will send it to MSNBC CNN Faux Bloomberg BBC CSPAN who else ?

[bobbolink]

102. Terrific! Could you head up a post about this? And give contact info!

That's what we need to do, is take ACTION!!!

[4 t 4]

103. will do n/t

[maryf]

106. Please post the link to it

When you can, thanks!

[4 t 4]

118. Emailed all these addresses so far

General e-mail: [e-mail]
Nightline: [e-mail]
20/20: [e-mail]





CBS News
524 W. 57 St., New York, NY 10019
Phone: [phone]
Fax: [phone]

Email forms for all CBS news programs
CBS Evening News: [e-mail]
The Early Show: [e-mail]
60 Minutes II: [e-mail]
48 Hours: [e-mail]
Face The Nation: [e-mail]





CNBC
900 Sylvan Avenue, Englewood Cliffs, NJ 07632
Phone: [phone]
Fax: [phone]
Email: [e-mail]






CNN
One CNN Center, Box 105366, Atlanta, GA 30303-5366
Phone: [phone]
Fax: [phone]
Email forms for all CNN news programs



Fox News Channel
1211 Ave. of the Americas, New York, NY 10036
Phone: [phone]
Fax: [phone]
[e-mail]
List of Email addresses for all Fox News Channel programs
Special Report with Brit Hume: [e-mail]
FOX Report with Shepard Smith: [e-mail]
The O'Reilly Factor: [e-mail]
Hannity & Colmes: [e-mail], [e-mail]
On the Record with Greta: [e-mail]



MSNBC/NBC
30 Rockefeller Plaza, New York, NY 10112
Phone: [phone]
Fax: [phone]

List of Email addresses for all MSNBC/NBC news programs
Dateline NBC: [e-mail]
Hardball with Chris Matthews: [e-mail]
MSNBC Reports with Joe Scarborough: [e-mail]
NBC Nightly News with Brian Williams: [e-mail]
NBC News Today: [e-mail]



PBS
2100 Crystal Drive, Arlington VA 22202
Phone: [phone]
Fax: [phone]

The NewsHour with Jim Lehrer: [e-mail]




--------------------------------------------------------------------------------

National Radio Programs


National Public Radio
635 Massachusetts Ave. NW, Washington, DC 20001-3753
Phone: [phone]
Fax: [phone]

E-mail: Jeffrey A. Dvorkin, Ombudsman [e-mail]
List of Email addresses for all NPR news programs



The Rush Limbaugh Show
1270 Avenue of the Americas, NY 10020
Phone (on air): 800-282-2882
Fax: [phone]
E-mail: [e-mail]



Sean Hannity Show
Phone (on air): 800-941-7326
Sean Hannity: 212-613-3800
James Grisham, Producer: 212-613-3807
E-mail: Phil Boyce, Program Director [e-mail]

[maryf]

121. WOW! thats great!!!

I'm bookmarking this post :applause:

[bobbolink]

140. My hero!!!

:applause::applause::applause::applause::applause::applause:

Are you trying to kill me? I'll have a heart attack "when" Rush and Hannity broadcast this info! :rofl:

This really deserves it's own thread... I hope you will post it!

Thanks so much!

[dajoki]

108. That would be great...

if you can do that, it could go a long way to getting the truth out. Thank you!!

[Two Americas]

95. excellent work Hannah

This is an important subject. We are inundated with right wing and authoritarian points of view now all through the "liberal" and "progressive" community, as the premises and assumptions upon which the right wing propaganda is based have been internalized by people. It is vitally important that we continue to develop and refine an alternative narrative.

We need to see a thorough examination and discussion of the subject of taxation.

Some of the talking points I have seen here the last few days include a proposal that renters pay property tax and stop freeloading off of property owners - do I need to explain the utter absurdity of that? - and that people who do not have children should not have to support public education.

While the tax burden is shifted more and more to the poor, often in ways that are not immediately obvious to the causal observer, the wealthy and powerful have been very successful in escaping their share of the burden.

U.S. Companies More Aggressive About
Reducing Tax Burden

Corporate taxes are expected to fall this year to the lowest level as a share of the economy since the early 1980s. Revenues will amount to roughly 1.3 percent of gross domestic product in 2002, down nearly fivefold from a post-war peak. That leaves some 83 percent of federal income taxes for individuals, up from a 60-40 split in the 1950s.

To critics, Corporate America's shrinking tax burden shows how well-funded lobbying efforts can turn government against the people. Even as public confidence in the accounting profession has hit a new low, companies are going to ever-greater lengths to avoid paying. Progressive magazine calls it a "50-year swindle."

At least part of the difference reflects how companies are working harder to pay less tax, said Mihir Desai of Harvard Business School: "The breakdown is consistent with the idea that firms have become much more aggressive about tax sheltering."

Certainly Enron, with its hundreds of subsidiaries in tax havens such as the Cayman Islands, qualifies as aggressive.Other high-profile examples are big players such as Ingersoll-Rand Co. and Stanley Works that have moved their headquarters offshore. Those firms concluded that the tax savings were worth the inevitable criticism from the likes of Sen. Charles Grassley (R-Iowa), who recently accused these companies of "skirting their own taxes and profiting from other people's taxes. That's wrong."

http://www.law.wayne.edu/McIntyre/text/navistar_no_tax.pdf

The Corporate Tax Dodge

By Cassandra Q. Butts

The news that more than 60 percent of U.S. corporations failed to pay any federal taxes from 1996 through 2000 when corporate profits were soaring and that corporate tax receipts had fallen to just 7.4 percent of overall federal tax revenue in 2003 – the lowest since 1983 and the second-lowest rate since 1934 – is an outrage. But it should come as no surprise to anyone who has been paying attention to national tax policy over the past few years. The General Accounting Office (GAO) report also found that an astonishing 94 percent of corporations reported tax liability of less than 5 percent of their total income during the same time period. Corporate tax dodging has gone on for far too long. But the policies of the Bush administration have exacerbated the problem by furthering the culture of tax avoidance by big corporations and creating a pervasive unfairness in our tax code.

http://www.americanprogress.org/issues/2004/04/b45142.html

Making the Rich Pay Their Fair Share



Corporations have succeeded in shifting their share of the tax burden to working people. In 1940, corporate income taxes alone accounted for more than 41 percent of all federal tax collections. Over the last 50 years the corporate contribution has declined steadily. Cuts in the corporate tax rate, combined with wasteful military spending in the 1980s, caused the federal deficit to balloon. And corporations make an even smaller contribution to state coffers: in 1997, taxes on corporations represented just 6.9 percent of state tax collections.

Back in the 1830s, rich men taxed working men for the privilege of voting and buying their tools and clothing. The nation’s first labor parties argued in favor of replacing poll and sales taxes with taxes on income, property and bonds. Fifty years later, union-backed parties advocated a graduated income tax. Then came the People’s Party, a coalition of debt-weary farmers, factory workers and miners also known as the Populists. They likewise called for a graduated income tax to make the wealthy pay their share of the cost of our national government. In the early 1890s, the Populists elected members of Congress, governors and state legislators; the Populist presidential candidate carried three states in 1892. Political pressure for change forced Congress in 1894 to enact an income tax.

The wealthy were horrified. The Supreme Court declared the act unconstitutional. More years of political pressure led to the adoption in 1913 of the Sixteenth Amendment, which allowed the federal government to levy taxes on personal income. The income tax was (and, to some extent, still is) graduated and progressive — meaning that in stages, the tax rate is higher on larger incomes. Back in 1913, workers and farmers thought this made good sense. The robber barons who had become fabulously wealthy by looting the nation’s resources and exploiting labor ought to be required to give back some of their ill-gotten gains.

...

Directed mainly at the big money, the income tax supplied as much as 59 percent of the federal budget. A top rate of 90 percent whacked the income of the super-rich. President Franklin D. Roosevelt, elected with labor support, said no American should have an income of more than $25,000 after taxes — about $250,000 in today’s money. But the class struggle over taxes continued. In the White House, the goal of fairness and social equality died with Roosevelt. The corporate elite came back in full control. Unions came under attack.

...

The problem is that a number of loopholes and dodges allow the very wealthy to shield their incomes from taxes. Working people have little protection; instead, Congress has closed practically all deductions allowed to workers. As a result of the deductions and credits available to the wealthy, 998 top earners with adjusted gross income totaling $600 million paid no income taxes at all in 1995. Ninety-seven percent of the super-rich paid less than the top rate of 35 percent rate, 81 percent paid less than 30 percent, 43 percent paid less than a 25 percent rate. Much of the tax "reforms" bandied about in Washington — like the flat tax and value added tax proposals — would replace an unfair tax system with a worse plan that would benefit the wealthy at the expense of working people.

http://www.ranknfile-ue.org/uen_taxrich.html

[maryf]

107. Great stuff, TA, check out the link VPStoltz provided above

The more we know, the better we can fight for economic justice...

[Waiting For Everyman]

129. Wow TA, your info is like the flip side of the OP - how little the rich and corps. pay.

They have the most say-so and control over our government and take most of the profits and advantages from it, while paying the least percentage of the cost. Wrong, wrong, wrong. They should have the LEAST say about what we do - not only because that would be Constitutional, but also they aren't the ones paying the bills.

Your post alongside the OP shows a very clear picture of what's happening with our finances. It's once again more of the same theme of "privatize the profits and socialize the cost". (Perhaps if corporations were paying most of the bills for wars, it wouldn't seem so profitable and appealing to them, as it does now???)

If this doesn't outrage any individual taxpayer, it should. We see from this how misguided people are to rail against the progressive income tax. The problem with it is though - we need to give most of the deductions to individual people (such as for interest we pay), and close them off to corporations. Make it a heavy jailable crime for them to launder or offshore income over a high set amount (to keep the focus on significant amounts rather than trivial sums).

If corporations take income or jobs offshore we should take all advantages here away from them, including being known as a US company. At least until then us private people should have a "toxic list" of such companies and those which use slave labor, and boycott the hell out of them - and any entities which invest in them. I've believed for a long time that the "voting power" of personal pensions should be used for a positive social agenda. I think boomers would warm to that idea, if it was promoted for a while. It would be like "demonstrating" with one's pension account.

[Raksha]

98. K & R

[rosesaylavee]

100. K / R / Bookmarked.

Thank you for posting

[WCGreen]

111. Outstanding post that really takes everything that conservatives

leave out of the tax rate equation into consideration.

Way to go.

K&R

[Joe Chi Minh]

112. Taxation is such a matter of common sense, isn't it? The SUPPOSED advocate

of right-wing, loony capitalism, Adam Smith, in fact, stated that people should pay tax as closely as possible in accordance with their income!

In other words, if poor people are to be taxed AT ALL, the tax on the rich would have to be astronomical. Common sense would suggest that poorer people should not pay anything, and the rich, a very much higher proportion of their income, net of tax-lawyers' chicanery, than they have since the early post-war period.

It's as obvious as the inevitability of Milton Friedman's putative, economic "philosophy", if you please, being exposed as unbridled greed, as the most simple-minded, fundamentalist Mammon-worship!

[JNelson6563]

114. Good post!

Timely topic! :applause:

Julie

[dcsmart]

117. The facts will set you free

:kick:













POST REPLIED TO

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=4800489&mesg_id=4800489

[Tindalos]

119. Kicking poverty in the

:kick:

[4 t 4]

122. Now I will start with some radio stations n/t

[4 t 4]

123. Thank You Hannah

hope it is ok with you. I am so sorry because I am sure it won't matter because they don't hear what they don't want to, but will give it a try.

[Hannah Bell]

128. thank you for doing this, great idea.

[Hannah Bell]

164. kick

[Hannah Bell]

167. kick

[maryf]

134. Homelessness Marathon

Seeing you mention radio, reminded me of this fantastic radio project for the homeless, I'll be quoting from the site in my poverty OP next week...you'll probably get something positive there...

http://homelessnessmarathon.org

[bobbolink]

152. coming up...when? February?

:applause:

[maryf]

170. From the site...

thanks for asking!!!

The 12th Annual Homelessness Marathon will originate from Pass Christian, Mississippi. The broadcast will start at 6 p.m., central time, on Monday, February 23rd and end at 8 a.m., central time, on Tuesday, February 24, 2009. Pass Christian is next door to Waveland, MS, which the Army Corps of Engineers officially designates as the "Ground Zero," where Hurricane Katrina came ashore. We call it the "other" Ground Zero, because it's the one that didn't get the attention (or the multi-trillion dollar response) that was given to the Ground Zero in New York.

[JeffR]

125. Kick!

:dem:

[maryf]

126. Kick nt

[Tindalos]

127. kicking for the night owls. n/t

[saltpoint]

130. Dolphins and this thread are very smart and interesting.

Both are recommended.

[bobbolink]

166. Luckily, you don't have to be underwater to read this GREAT information!

:hi:

[lonestarnot]

131. Kick!

Too late to R!

[ulysses]

132. needs to be required reading.

:thumbsup:

[bobbolink]

151. Sure does! Amazing that stuff like this isn't widely known

:hi:

[smokey nj]

135. Kick!

[varelse]

141. Kick

And a link to a related topic (thread started by kpete): http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=4808402&mesg_id=4808402

[bobbolink]

146. We MUST push that language... "CORPORATE WELFARE"!!!

:hi:

[Tindalos]

162. Thanks for the link. n/t

[Joe Fields]

160. Thanks for ALL of this, Hannah!

It's true that the poor pay a greatly disproportionate share of taxes, specifically through payroll deductions. It also makes sense that the poor, because of little or no established health care, do not live long enough to collect on the social security that they pay into. There is no real lobby for the poor. Politicians ignore the poor, because the poor is a constituency that can't line their pockets or advance their power base, or advance their career after politics.

[JeffR]

161. Your last sentence is surgically elegant. That's exactly the truth of it.

:fistbump:

[bobbolink]

171. "There is no real lobby for the poor." I always thought that's what the Democratic party was

SUPPOSED to be.

I thought wrong. :cry:

[Fireweed247]

175. That is what the "Democratic" party is supposed to be

and precisely why we need to take back OUR PARTY for the people!

[Tindalos]

163. Taxes. How much do you get back?

Do you benefit under the current system?
Do you have the services you need?
Are you getting your money's worth?


I'm guessing the answer is 'no' for most people, but somebody answered 'yes'. Maybe it's time to ask that person what makes them so special.

[malaise]

165. Anyone who says the poor don't pay taxes

is delusional. Kick

[bobbolink]

172. YEt, there are many who repeat that --everyday. And right here on DU!

And many more who don't see the harmful effects of regressive taxes, such as gas tax!

:(

[malaise]

173. 100% correct

Kick

[saltpoint]

174. A kick a week or so out from the Inaugural.

[bobbolink]

176. For those who didn't see it... Poverty In America-- help to change it!

:kick:

[bobbolink]

177. kicking this for inauguration awareness!

:kick: