Posted on 10/27/2008 8:43:49 AM PDT by KarlInOhio
Is the U.S. graduated income tax — a tax that ties both the amount of taxes paid and the rate of taxation to wealth — "socialistic," as certain politicians have been arguing lately?
It's hardly likely, since the U.S. graduated income tax in its present form has been around since 1916. The Sixteenth Amendment authorizing a federal income tax had been ratified by three-fourths of the states in 1913. It has been vetted by economists great and small, and endorsed by none others than Teddy Roosevelt, Adam Smith and, yes, Karl Marx.
Maybe the problem is the term "progressive," which some equate with "liberal." But in fact "progressive" in tax parlance means increasing proportionately with wealth. Its opposite is "regressive," where taxes disproportionately punish the poor.
Or maybe it's because it's a tax on income, which some think wealthy Americans — being more skilled at earning — have a higher moral right to hoard?
Since when does the hoarding of wealth by individuals, rather than jobs creation, do more to "grow the economy?"
History provides us with some answers.
Even though an income tax was anticipated in the U.S. Constitution (Article 1, Section 8), the first tax on income was not levied in the United States until 1862 to help pay for the Civil War.
The numbers are quaint, but the tax was progressive. Annual earnings between $600 and $10,000 a year were to be taxed at 3 percent; incomes in excess of $10,000 at 5 percent. It didn't take but two years for the rates to go up to 5 percent and 10 percent, respectively, but that's not part of our story.
The income tax went out of favor for about 40 years after 1872, but when it returned, it was graduated as much as before.
The fact is: The U.S. has never levied anything but a progressive tax on income.
Teddy Roosevelt, a model for both Republican and Democratic aspirants for the presidency, was a leading advocate in his day for a graduated, or progressive, income tax.
In the language of his times, he wrote: "The really Big Fortune, the swollen fortune, by the mere fact of its size, acquires qualities which differentiate it from what is possessed by men of relatively small means. Therefore, I believe in a graduated income tax on Big Fortunes and (he added gratuitously) a graduated inheritance tax on Big Fortunes . . . increasing rapidly in amount with the size of the estate."
That's about as warm an endorsement as one could muster. John McCain likes to compare himself to Teddy Roosevelt. So, why his sudden opposition to progressive taxation?
Well, for one, there are more Americans than ever before hoarding Big Fortunes, as Teddy Roosevelt would have said, with more dollars to lose from a graduated income tax.
Writes Edward Wolff, a professor of economics at New York University, and managing editor of the Review of Income and Wealth, "The top 5 percent of Americans now own more than half of all wealth, a disparity that has doubled what it was in the mid-1970s. And as regards family assets, the top 1 percent average $12.5 million, compared to the median family household with about $62,000.
For another, there's a convenient myth that rich people put more of their money in circulation; that is, their untaxed money is available to "grow the economy." But that's not the reality.
When you're very rich, you can't spend all your money, so it's socked away, out of circulation. The rest of us just getting by, spend proportionately more of our money on necessities, small extravagances and entertainment. Putting money into the economy is what creates jobs and makes the economy grow.
Let's not confuse "sharing the burden" with "sharing the wealth."
A progressive income tax distributes the tax burden fairly.
Maybe the problem is the term "progressive," which some equate with "liberal." But in fact "progressive" in tax parlance means increasing proportionately with wealth.
I equate "progressive" with ever increasing like a progressive disease. Thus cancer and the progressive income tax should be forever associated with each other.
Or maybe it's because it's a tax on income, which some think wealthy Americans — being more skilled at earning — have a higher moral right to hoard?
Since when does the hoarding of wealth by individuals, rather than jobs creation, do more to "grow the economy?"
Very few of the rich "hoard" their money. It is invested in businesses, either directly or indirectly through bank savings which is then used to lend to businesses and people. Warren Buffet doesn't have the largest matress in the world to hoard his wealth under.
The fact is: The U.S. has never levied anything but a progressive tax on income.
That's because the only way to get an income tax passed is to convince the majority that some other sucker will be stuck with it, not you. The 16th Amendment was passed by the majority of states by having a low rate initially and convincing most people that it would be applied mainly to rich East Coasters, not to the general population.
When you're very rich, you can't spend all your money, so it's socked away, out of circulation. The rest of us just getting by, spend proportionately more of our money on necessities, small extravagances and entertainment. Putting money into the economy is what creates jobs and makes the economy grow.
Tell me again how a rich person with personal interest in making more money is a worse steward of that money than someone from Washington who expects more political pull from spending the money rather than economic success.
Neal Boortz is savaging this lady and her column on his morning radio show.
If liberals really believed this, their tax returns would show a huge percentage of their money being “given” to the poor.....instead they show very little given to charity and their money safely tucked into non taxables.....they just want YOU to give more money.
Someone please take this idiot's keyboard away before he does any more damage. Apparently he's never heard the term 'investment' before. Or maybe he thinks that just something politicians do with money they take from people by force.
excuse me ...he = she.
Sounds progressive enough to me.
Don’t you just love the sick scumbags who write this stuff?
“Asking”....
Joe Biden says that people who earn more than $250,000 need to man up and pay more for their fellow man.
Biden made $425,000 and gave less than $1,000 to charity.
When he was making $300,000+ for several years, he was giving under $400 a year to charity.
He is an obnoxious hypocrite who wants to spend YOUR money to ease his guilt.
http://sheilatobias.com/index.html
When we were not paying attention the communists seized control of all the institutions of higher learning in our country and now are planning to reap the benefits. And this kind of cloudy, anything-but-critical thinking is the best they can offer? One someone who has spent her entire life sucking off the public tit and achieving nothing of actual worth could write such bilge with a straight face.
Taken to the extreme, and yes these are extreme times and issues, the progressive or graduated tax rate will eventually achieve 100% taxation above the median income.
Oh, they’re “asking” me to pay more tax?
So, I can say “no”?
Its was the boat builder who lost jobs not the rich.
I heard that which is why I posted it here so we could all have fun hitting this pinata.
Since the “very wealthy” ($30 million and up) support Obama (and Democrats) far out of proportion to what the “modestly wealthy” ($1 to $30 million net worth) class of people do, let’s give them what they want.
Find the income profile of the vastly wealthy and tax the dickens out of them. I mean, tax them into the ground.
This will do two things:
1. It will remove future campaign contributions from the liberals/Democrats.
2. It will forever change the tune of the very rich who feel very guilty for being rich, and want to raise all our taxes.
When I say “tax the dickens” out of them - the goal should be to make them paupers within four years. I want their net worth reduced considerably within four years.
Warren Buffet doesn't have the largest matress in the world to hoard his wealth under.
Thank you! This is the first thought that popped in my head as I read this toilet paper article...
Is a progressive tax payment scheme socialist? What is the money being spent on? National defense? Or a welfare state that is redistributing the money from those who have to those who do not?
Spread the wealth is nothing but trickle up poverty.
They protect their wealth with "foundations" which their families serve on.
Look at Europe! China! Russia” All the Arabic countries! Do you want to live poor anywhere in the world?
America offers bettering oneself by work and being enterprising. No one is locked out of this opportunity, except those that are unwilling to participate and get educated. Night school, on line intern-net participation toward earning a degree is open to most all.
Even the poor have Ipods, cell phones, etc. What they really value they have.
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