Income Inequality, Politics, Economic Policy and Tax Day Facts
Muncie, Indiana (NEWS) – Well, hopefully you’ve completed your taxes and sent them to the Indiana and Federal tax collectors. Many of our local accounting professionals had their first solid nights sleep last night and should only feel moderately hungover with eyes and heads still a bit swollen from wading through pages of tax codes and IRS instructions.
At the last bell, we came across a great article from ThinkProgress which puts our tax payments and collections in perspective. Lots of good charts for those who simply want to scan the truth.
So, where do our tax dollars go?
Well, 65% goes toward the major spending programs of our national defense, Medicare & Medicaid, and Social Security.
Debunking most of the myths coming from the right, and ALL the complaints coming from the conservative blowhards on radio and TV, the wealthiest and corporations are paying less toward government than ever before in history. In fact, everyone is paying less in federal taxes.
As for the developed world, we rank 31st in the percentage of GDP paid toward taxes. We’re behind Korea and Japan while most of the developed world pays 40% or higher in taxes, we pay around 32%. This might explain why we are lagging behind other countries in education. We spend very little in this country on education – notice it wasn’t mentioned in the 65% going toward “major spending programs”. (HINT)
Also, not like we have to repeat this again, but why not, Mitt Romney was wrong. As the article points out, “According to the Tax Policy Center, only 14.4 percent of people pay neither income taxes nor payroll taxes, and the large majority of those are elderly retirees.“
Get ready, because here is where the “facts” spouted by the conservative media fall into a bucket of propaganda. Oft repeated lines about how much more taxes the 1% pay then everyone else. In this case, the facts point to the problem – the 1% do pay more.
However, the reason the 1% pays more, is they make more income than the 99%. You’ve heard us mention, and all good leaders like JFK know this, “A rising tide lifts all boats.”
Over the past three decades, our economic and political policies have favored the wealthiest Americans. The theory behind “Reaganomics” was if we put more money in the hands of large corporations and the wealthiest Americans, our entire economy would benefit.
Even though Reaganomics was the antithesis to JFK’s philosophy, people bought it because it was sold by corporate media. As the evidence reveals, “trickle down economics” was an epic failure and has left us with the largest income inequality gap in our history.
Does this stop the republican part from advocating for it?
No chance. They still want to remind Americans that wealth redistribution is un-American.
The Libertarian Billionaires who fund the Tea Party take it one step further, they also want to end taxes by privatizing all government functions. They believe we don’t need the government to keep our economic sector in check because market forces will correct any abuses in power. This is delusional, at best.
A Businessweek article posted earlier this week states:
Economist Scott Drenkard, of the Washington, D.C.-based Tax Foundation, announced Monday that once the tax reductions begin taking effect, Indiana will jump to eighth on the nonpartisan group’s rating of the best state business tax climates, up from 10th.
Well, here is where Americans really feel the pain, especially Hoosiers. While republican leadership has reduced the tax burden on the corporate élite and our wealthiest Hoosiers, the cost of government has stayed the same or increased. If the rich are paying less, who is picking up the cost of government services?
When you factor in all taxes, including state and local, guess who pays the highest percent of taxes?
Hoosiers in the lower-income brackets. According to the Ft. Wayne Journal Gazette, “Hoosiers’ tax bill as a share of income grew from 8.4 percent to 9.5 percent over the past decade.”
Not only are lower-income people paying a higher percent to the Tax Collectors, our quality of life is deteriorating since the republican policies are also cutting funds to local government entities, so schools, roads, parks and government-owned buildings get neglected.
To paraphrase ThinkProgress, our country is lagging behind our counterparts in other developed countries. We need to invest more dollars in our infrastructure, protect our elderly and disadvantaged populations, educate our children and young adults, and raise the standard of living for everyone in this country.
Our current tax structure and policies are failing Hoosiers, Americans and the United States of America. Austerity programs are foolish when they crush 99% of Americans. When you force the 99% to only spend for basic necessities, our economy will limp along forever. If our leaders want to see this country turn around, they’ll have to adopt JFK’s philosophy of raising the tide so all boats will do well by focusing the next three decades on raising the standard of living for the 99%, and stop pandering to mega-corporations, hedge-fund traders, and the 1%.