Mark Shields: Lightening the Burden of the Super Rich
http://www.noozhawk.com/noozhawk/article/022710_mark_shields_lightening_the_burden_of_the_super_rich/
By Mark Shields
Bush's tax cuts continue to pay big dividends for the wealthiest among us
The owners of the Los Angeles Dodgers baseball team, Frank McCourt and his wife, Jamie, are mired in a messy divorce. According to papers filed in Los Angeles Superior Court, the McCourts — from 2004 to 2009 — collected income totaling $108 million. According to those same court papers, on that $108 million, the multimillionaire McCourts did not pay a single dime in either California or U.S. taxes.
Obviously, this un-fun couple must be fans of the values of the late New York hotel owner and convicted tax evader Leona Helmsley, who, according to the sworn testimony of her former housekeeper, announced: “We don’t pay taxes. Only the little people pay taxes.”
That’s certainly the way things look to be heading after the IRS revealed that the effective federal tax rate for the 400 highest-earners in the United States in 2007 was 45 percent lower than it had been in 1995. The average annual income of the 400 highest earners was $345 million.
In 1995, when Bill Clinton was president, the top 400 earned an average of $50.9 million and paid U.S. taxes at an effective rate of 30 percent. Twelve years later, after the enactment of George W. Bush’s generous tax cuts on upper-income individuals, the effective federal tax rate paid by the richest 400 averaged just 16.6 percent — or about 45 percent less than in 1995.
Not only did the pre-tax income of the highest earners increase dramatically during the Bush years, but because of the tax cuts, their after-tax income went up even faster.
According to the research of Avi Feller and Chuck Marr of the Center on Budget and Policy Priorities, those changes produced “a tax cut of $46 million per filer in 2007, or a total of $18 billion in tax cuts for these households per year.”
Yes, all of the 400 highest earners individually were getting much bigger paydays in 2007, but collectively this privileged group’s share of the nation’s total adjusted gross income — 1.59 percent — had tripled in size of what it had been in the 1990s.
Republicans, we know, proudly believe in the genius and sanctity of tax cuts for the wealthy — make that, “the productive.” The Republican Party’s answer to any problem — from declining Sunday school attendance to increased rush-hour congestion — has always been predictable: Cut taxes, especially the capital gains tax.
Their reasoning, as John Kenneth Galbraith once observed, seemed to be based on the “horse and sparrow” theory of taxation: If you feed the horse enough oats, some will pass through to the road for the sparrows.”
But why aren’t the majority Democrats, the self-proclaimed tribunes of working people, storming the barricades and demanding tax justice beginning with the immediate repeal of the tax preferences for the most affluent? Could the Democrats’ passive lack of urgency about changing the nation’s manifestly unjust tax laws have anything to do with the fact that candidates of the party of Thomas Jefferson and Andrew Jackson have lately been the principal beneficiaries of Wall Street contributions? It’s time for them to prove otherwise.
As Sen. Byron Dorgan, D-N.D., once asked during a Senate debate on shrinking even further the tax rate on capital gains (now barely half what it was when President Ronald Reagan was in the White House), “Why don’t we go all the way and simply take the rich off the tax rolls altogether?”
— Mark Shields is one of the most widely recognized political commentators in the United States. The former Washington Post editorial columnist appears regularly on CNN, on public television and on radio. Click here to contact him.
http://www.noozhawk.com/noozhawk/article/022710_mark_shields_lightening_the_burden_of_the_super_rich/