Only the Little People Pay Taxes in America
I don’t know about you, but one thing I don’t like being called is the “little guy”, so I refuse to think like them. They’re always behind on something financially and economically, and continue to justify why. One of the things I like to do is win, and I win regardless by learning the game, and mastering it. When “little people” lose, I separate myself from the losers, plain and simple.
Nothing personal, it’s just business.
So what is this thing about “little people” paying taxes? It was allegedly coined by the L’Oreal heiress Liliane Bettencourt, as to say that regular people are willing to comply with frivolous taxes, and that since they have the information right at their fingertips, paying it is only their fault through mental laziness.
Rather she coined that saying or not, if she did, do she have a point? Let’s see what this guy says below as a “99er” and let us dissect as we go to see it from the top “one percenter” point of view.
Why are our seniors paying higher taxes on their social security benefits than billionaires pay on stocks?
The IRS released a new report that reveals the staggering amount of money that the top one-thousandth of one percent in America is hoarding. While the top earners in the bottom 50% of Americans only make 36,000 dollars a year – the bottom earners in the top one-thousandth of one percent ‘only make’ over 62 million dollars a year.
The reason is how the IRS looks at certain income¹. According to Cashflow Quadrant, there are three kinds of income brackets the IRS consider. From stocks that fall under a portfolio tax which is more flexible to leverage, to social security benefits that’s derived from earned income which is taxed at a higher rate.
Sixty-two million dollars per year is what it takes to be a top one-thousands of one percenter – and those are the poorest of the richest households – on average the top earners make over 160 million dollars a year.
Now you have a target income amount to reach in order to get to the one percent according to this guy.The question is, where to start? Keep reading.
IF you believe you’ll never see that amount in your lifetime ($160 million), I respectfully encourage you not to read any further.
That’s 160 times richer than the average one percenter who only makes about 1.5 million dollars. That’s an obscene concentration of wealth – but that’s not the most outrageous part of the story, because those top earners are paying a lower tax rate than working class Americans and retirees.
I want to reemphasize the accusation of “obscene concentration of wealth” that wealth is only from within, based on your state of mind. From a financial standpoint, wealth is transferred from one hand to another based on compliance and voluntary trade of buying and selling. Most low to mid-income households agree with Walmart’s low price in order to stretch their paychecks, thus enable the Waltons to be one of the wealthiest families in the world. And millions of clients who voluntarily have trillions of their dollars managed by banks like JP Morgan Chase have given the bank the prominence of being one of the largest financial institutions in the world.
Now regarding top earners paying a lower rate than working class and retirees. Top earners knows something about taxes most 99ers don’t, and hire sophisticated accountants to legally avoid paying certain taxes. With over 70,000 plus pages in the code itself, it would be a hint that it’s more likely written for you to avoid paying it.
The highest tax rate on income¹ taxes in 2014 was 39.6% for households earning over 439,000 dollars – and the majority of American households paid an income tax rate of between 15% and 28%. Those are households of plumbers, bus drivers, doctors, and engineers – the average working Americans who create real wealth for the economy.
No disrespect to the plumbers and doctors and bus drivers, but this is where I believe the whole class warfare starts which is part of this country’s problem. Yes, every person in this country rich AND poor create real wealth for those who sell a product for them to buy. And by doing that, it stimulate the economy. You really have to look at where the money’s flowing to. These jobs are seen as earned income by the IRS which is taxed at a higher level than earners who leverage the language of the tax code for their benefit. The beauty of the Information Age is these same plumbers, bus drivers, doctors and engineers are presented with every opportunity at their disposal to play the game of the rich as well via social media, Internet, etc.
Meanwhile the banksters and vulture capitalists – the billionaires who make most of their income by moving money back and forth – pay a maximum rate of 20% of their earnings from the stock market.
Let me correct the typo, I think he meant “venture capitalist”, the same capitalist that infused capital in startups like Microsoft, Apple, Facebook, Twitter, and almost every product you’re using right now that enabled you go online and write this to venture out. Bankers are here because that plumber and doctor, and bus driver need to get their paychecks deposited on payday, and move it from point A to point B to pay bills, or to start their own business so they can legally lower their tax bills too.
How does this happen? Why did Mitt Romney a lower effective tax rate in 2011 than a waitress earning $2.13 an hour?.
Because Mitt Romney is a founder and executive of a corporation call Bain Capital and legally called his income a portfolio instead of an earned income by the waitress. It happens when you determine your income based on how it’s derived, and the internal revenue code taxes it based on the going tax rate for that particular income.
It started with the memo that Lewis Powell wrote in 1971 – just a few months before Nixon nominated him to the Supreme Court.
In no unclear terms – Powell wrote: “Business must learn the lesson, long ago learned by labor and other self-interest groups. This is the lesson that political power is necessary; that such power must be cultivated; and that when necessary, it must be used aggressively and with determination – without embarrassment and without the reluctance which has been so characteristic of American business.”
I wasn’t there when he wrote the memo so I have no comment on that one.
And for the last 40 years – business has followed Powell’s advice to a ‘T’: by taking over our education system; purchasing the nation’s newspapers, TV, and radio stations; filling the courts with activist judges; and filling Washington with lobbyists and corporate-owned lawmakers.
This is where I bring it back to the consumer, the very people he believe is getting ripped off by the rich. If people believe everything the school system told them (except math and probably science) without questioning, then I can’t help those people. Then they voluntarily read the newspaper, watch the TV program, and listen to the radio stations. They comply with the courts and the judges that make and enforce the laws. That’s a complete voluntary act on the consumer’s part. So I don’t blame corporations investing millions in PR with lobbyists and lawmakers. These same corporate funded lobbyists got people debating about vaccines, abortions, organic vs. GMOs and the legality between holistic treatment and pharmaceutical drugs like chemotherapy. Corporate lobbying invested lots of money for those who have emotional attachments to these products based on marketing tactics. That’s business.
And what have they done with that power? They’ve rigged the system against the average American and in favor of themselves. They’ve punched holes in our tax system so that seniors and working Americans can pay a higher tax rate than vulture capitalists and bankers.
I have to disagree. The average American have rigged the system against themselves. Arguing over who’s a tax cheat is actually an industry in itself. How much lobbying did it take to get people to vote for politicians promising to “tax the rich” when they get elected? The votes is what put the holes in the tax system. I honestly believe that an income based tax system is the single most outrageous, and backwards way to collect taxes to ever exist. And it has created a cancerous mindset of pitting one against the other in a masterful way. In order for the American people to stop feeling like everything’s “rigged” is to really act united and come up with a tax code where they no longer care who’s paying what anymore. This proposal might be a good start.
Vice President Henry Wallace, in 1944 in the New York Times, warned about how corporatists might try to undermine American Democracy: “They claim to be super-patriots, but they would destroy every liberty guaranteed by the Constitution. They demand free enterprise, but are the spokesmen for monopoly and vested interest. Their final objective toward which all their deceit is directed is to capture political power so that, using the power of the state and the power of the market simultaneously, they may keep the common man in eternal subjection.”
And this IRS report shows that Wallace was prescient – that’s exactly what’s happened.
May I intervene here? I believe this “patriot” game is extremely profitable. Rather you agree with it or not, it’s generating tens of billions of dollars. Going back to the consumer, they give these corporations the financial firepower to buy whatever they want, and payoff whoever they want. Small businesses dwindled away because people demanded to pay a cheaper price for products and Walmart delivered, hence the world’s largest retailer.
If this is what corporatists REALLY doing, then the consumer has the choice to help them fund their agenda, or stop doing business with them altogether.
The vulture capitalists and bankers make money without creating wealth. Adam Smith, back in 1776 in “Wealth of Nations,” said that real wealth is created for a nation by manufacturing. His simple example was a person adding labor to raw materials to create a new object with greater value – he used the example of a person taking a valueless tree branch and using their skill and labor to carve it into a valuable axe handle that then becomes part of the wealth of the nation for years.
Bankers and “venture” capitalist may not “create” wealth from a physical product point of view, but managing it is a market, and therefore create wealth by selling an intangible product. And people are willing to pay bankers and VCs money to move and/or manage that money for them through these products just like this gentleman might be providing an intangible product right now writing this article because someone will find value in what he’s saying. So in hindsight, he’s in the same category as the VCs and bankers–just earning money relaying information.
That’s what working Americans do every day – building cars; making consumer products; an engineer designing a bridge.
And again it’s up to the market to buy these products from the companies that billionaires fund and invest in, in order to buy the raw material for the working Americans to build the cars and make consumer products that the market wants to buy. But someone, somewhere has to invest their millions and billions in order for the working class to get paid and build it. That’s why the top earners are able to pay less in taxes, so they can use those savings to invest in more businesses looking to hire more working Americans.
But the top earners in America? The Wall Street executives and vultures? They don’t make anything – they don’t create wealth – and they actually can increase their profits – but not the wealth of our nation – by gutting a company, slashing employee benefits, and decimating the workforce.
According to the free market (the consumers and producers) can trigger a consolidation of companies based on the products and services they choose to buy, or not buy. Cars are popular now, but soon autonomous cars will be popping up, and there goes your taxi drivers and bus drivers if the market choose to move in that direction. Buggy whips lost market share from cars, the market chose cars over horse and buggy, so the VCs used their wealth to invest where the market was going and started investing in engines. Yes, companies got gutted (VHS manufactures), employee benefits got slashed (GE, Boeing), and the workforce got decimated (GM) because the consumers, the customers, the free market said to the bankers and VCs (hey! We’re spending our money here instead!).
But after 40 years of corporate America infiltrating and subverting our democracy – they’ve grabbed so much power and influence over our politics that they’ve essentially written themselves out of our tax code.
Can you blame them?
The last thing I would claim if I was an average American is the tax code being “ours.” I wouldn’t want any part of that monster anymore, nor touch it with a ten foot pole. The politicians decided to work for the highest bidder, so what do you do with that? Now I understand why they feel the nation’s dysfunctional, they’re claiming ownership of a dysfunctional tax code(s).
So now – only the little people in America – the doctors, plumbers, servers and small business owners – pay taxes in America.
I already told you my thoughts on this term, but how do you feel about this article calling you “little people” Doc? How about you Mr. Plumber? Small business owner? Waitress? Are you small?
Or is it best that he speak for himself?
Little people – like the seniors who have paid into social security all their lives only to have their benefits taxed at a higher rate than Mitt Romney’s capital gains. And that needs to change – we need to get money out of politics so that billionaires can’t buy elected officials and get special tax rules written just for themselves. We need to stop the superrich from punching more holes in our tax code and get them to pay their fair share.