Magazine article Sojourners Magazine

If I Were a Rich Man ... the Elite Few Benefit from the Bush Tax Agenda. the Rest of Us Get Stuck with the Bill

Magazine article Sojourners Magazine

If I Were a Rich Man ... the Elite Few Benefit from the Bush Tax Agenda. the Rest of Us Get Stuck with the Bill

Article excerpt

How we distribute the burden of sustaining governments determines in good part who prospers and who does not, who invests and who sinks into debt, who takes from society and who gives. When we decide who, and how, and how much to tax, and how to spread the burden, we shape the kind of nation we are and will become.

The moral philosophers of ancient Athens came to recognize this 2,500 years ago. When Athens was a tyranny it had a flat tax, an onerous burden that fell in the same amount on everyone subject to it. The less one had, the heavier the burden.

The philosophers of the Greek city-state concluded that morally the tax burden was upside down. Those who received the greatest material benefit from being Athenians should bear the greatest burden of maintaining Athens, they concluded. With this moral principle--taxation based on ability to pay--the Athenians invented democracy.

Every leading world philosopher from Aristotle and Plato to Adam Smith and Karl Marx, the fathers of capitalism and communism, has embraced the Athenian insight. Only in the past third of a century, in America, have these time-tested ideas been forgotten.

Today our airwaves, especially talk radio, are rich with denunciations of our supposedly progressive income tax, in which those who make the most pay the highest rates. Politicians who call themselves conservatives denounce the idea that those who make the most should bear a disproportionate burden.

They are ahistoric. Since taxation based on ability to pay spawned democracy, progressive taxation is the most conservative principle in Western civilization.

George W. Bush's first tax cut was so heavily tilted towards the rich that more than half of the benefits in the first decade went to the top 1 percent of Americans, those making more than about $300,000 annually. Even within that group the tax relief was highly concentrated in the top tenth of one percent--households with an income of $3 million or more annually. Go out beyond the first 10 years and the benefits to the super rich grow much more.

Rather than a progressive tax structure with the highest rates paid by those at the top, we have a bubble structure in which the upper middle class and the modestly rich pay more so that the super rich can pay less. And two-thirds of Americans pay more in Social Security taxes than in income taxes. If you consider the combined burden of Social Security and income taxes, people who made from $60,000 to $10 million paid a larger share of their money to the federal government than those making $10 million or more.

Political capital? Those who make millions each year depend far more on capital than wages. A goal of the second Bush term is to eliminate taxes on capital--on dividends, interest, rents, some kinds of royalties, and on capital gains from selling assets for more than they cost. The president articulates this when he says that "a dollar should only be taxed once" and "you shouldn't be taxed on money you've saved."

Taxes on capital have already been cut sharply. President Clinton lowered the top tax on long-term capital gains to 20 percent from 28 percent. President Bush lowered them to 15 percent and included dividends at that rate.

Shortly after the 2004 election President Bush, in one of his rare press conferences, laid out his tax reform agenda for his second term. He gave few details, but said he wanted to lower taxes on savings and investment and on "risk takers," which is Bushspeak for entrepreneurs and capitalists.

This idea that tax cuts for the rich are key to jobs, which Bush promoted in both of his presidential campaigns, has become ingrained in recent years. Almost any talk radio show or C-SPAN hour devoted to taxes will bring forth callers saying that their job will be secure only if their bosses get tax cuts.

Missing from this equation is the emergence of new rules for the world economy. …

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