Warm Southern Breeze

"… there is no such thing as nothing."

Re-Examining Personal Income Taxes

Posted by Warm Southern Breeze on Monday, November 18, 2019

Those who encourage tax cuts on the wealthy & corporations are misguided.

Here’s why:
They mistakenly believe that by reducing taxes upon the wealthy, it will increase their consumption – or, that in their benevolence, they’ll “create jobs” for the masses. (Which is also why they’re treated like “sacred cow job-creators.”)

Nothing could be further from the truth.

The wealthy already consume more. They consume more conspicuously, and they consume more governmental services.

No one “hates” the wealthy.

At least I don’t.

But, we ALL expect them to pull their fair share, not shirk their responsibilities, and we expect them NOT push their fair share onto others who are less capable.

I continue to analogize the matter this way:

There are THREE people who MUST move an 800-pound boulder:
1.) A Strongman body builder;
2.) An 80-year old, 80-pound Granny, and;
3.) An Average man.

Should we tell the Strongman, “sit down, and take a break – let the other two do the lifting.”?

No!

Any reasonable person would expect the Strongman to do the majority portion, or the “heavy lifting,” while the Average man assists, and the Granny supervises.

Who do those people and objects represent?

1.) The Strongman body builder represents the wealthy and their corporations;
2.) The 80-year old, 80-pound Granny represents the frail, elderly, and disabled, and;
3.) The Average man represents the average person/family.

The 800-pound boulder represents the services we expect and ask of our government.

In a similar fashion, our progressive personal income tax system is structured.

And I hasten to remind EVERYONE that in 1984, then-president Ronald Reagan lowered the Top Personal Income Tax Rate from 70% to 28%.

Then, he imposed the FIRST EVER Income Tax on Social Security benefits to make up for the loss.

During then-POTUS Eisenhower’s two-term Republican administration 1953-1961, personal income taxes upon the very wealthiest of Americans – and their corporations – was 90%+ for individuals, and for corporations was 30% and 52%.

During Republican Dwight David Eisenhower’s two terms, the income tax rate upon the wealthiest of Americans was in excess of 90%. It’s important also to understand that taxes are imposed upon the TAXABLE PORTION of income, not ALL income.

Presently, Personal Income Tax rates upon the wealthiest Americans is 37%, while upon corporations it’s 21%, both are a mere pittance, even though our nation’s population has significantly increased in size (meaning that needs have also increased) and in GDP.

But while Reagan is praised by some for reducing taxes, few recall his tax increases, such the 1982 Tax Equity and Fiscal Responsibility Act, the 1983 Social Security Amendments, and the 1984 Deficit Reduction Act – all which were enacted to increase Federal revenue after it bottomed out because of his cuts. Yet even before his tax cuts were implemented, the Treasury Department had warned that a 9% revenue reduction would occur. Criticized for his “trickle down” “supply-side” theory of economics which later earned the moniker “Voodoo Economics,” Reagan’s budget cuts were a kick-the-can-down-the road promise, which only reduced projected spending, and were not not absolute cuts in current spending.

Analogously, it’s like having 3 hamburgers to feed 5 family members. Somebody’s gonna’ get left out, or if they’re “equally” divided, everyone gets less than a full hamburger.

It’s just not right, not equitable, and unjust… not to mention just plain stupid.

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