Eliminate Billionaires: Tax Them Out of Existence

For months, Down with Tyranny has been beating the drum to raise taxes on the rich back to the levels that would prevent anyone from accumulating so much loot that they can literally buy the U.S. government - the way ExxonMobil already has and the Koch Brothers are perilously close to doing.

As Down with Tyranny explains,  low taxes on the wealthy are a reversal of the taxing tradition that made America's economy the strongest in the world.

As you know, until a scion of one of America's most corrupt plutocratic families managed to steal the White House, the highest marginal tax rate was a very rational 91%-- not highest ever (94% in 1944 and 1945) but high enough to prevent the establishment of an aristocracy based on financial power that could actually threaten democracy itself. That's what we have now. And the scion of the plutocratic family who started us down that path from after he defeated a more prudent President Eisenhower was... John F Kennedy. He lowered the rate from 91% to 70%, the kind of drop that usually only comes when Republicans are able to grab control of government.

When Eisenhower was president the marginal rate on regular income over $400,000 was 92% and then 91% and the max rate on long-term capital gains was a just 25%. This allowed people to get plenty rich-- but just not to take over the whole country the way Wall Street banksters and criminal sociopaths like Adelson and the Koch brothers are doing today. Ironically, it was Nixon who realized what was happening under Big Business-friendly Democrats JFK and LBJ and he raised the capital gains rates to 36.5%, although kept the marginal tax rate between 77-70% for income over $200,000. Ford kept the over $200,000 rate at 70% but increased the capital gains rate to 36.5% to a somewhat more healthy 39.875%, the highest level since the 50's. The capital gains rate started decreasing dangerously under... another Democrat: Jimmy Carter. He brought it down to 28%, a disastrously low level and then Reagan went nuts and wrecked the entire tax structure in such a way as to encourage the formation of an aristocratic society. The top rate on regular income came down from around 70% to 28% and lowered the capital gains rate to an unsustainable 20%, which would have bankrupt the country very quickly so that saner minds persuaded him to eventually bring it back up to the already horrible 28%. George H.W. Bush raised both income and capital gains, but not by enough to even make up for the systemic damages done to the country by Reagan. Clinton only raised taxes on the middle class. He left the wealthiest Americans alone and he gave them another Reaganesque tax cut on capital gains-- down about 8% to 21.19%. And you thought the Democrats were the good guys, huh?

Bush, of course, was the worst ever. He wrecked the economy completely-- and set the stage for the Great Recession by lowering income tax rates for the wealthy and by gutting the capital gains rate and bringing it down to 15.35%. Obama hasn't changed a thing. Nothing. The tax rates are historically low and completely unable to sustain a united United States. If the country appears to be falling apart, that's the reason why. And that takes us to an excellent post in Rolling Stone this week by Matt Taibbi on... what else?... Romney's taxes. He claims Harry Reid and the Democrats are wasting their time by sniping at Romney for the unreleased years of tax returns and the claims that there are at least some years he paid no taxes at all. "[W]hat they should be doing instead," he writes "is hammering Romney on the missing returns, yes, but focusing even more on the returns he did release. We’ve known for seven months now, for instance, that Romney paid $3 million in federal taxes in 2010 on $21.7 million in taxable revenue, an effective tax rate of 13.9 percent. Which, as most people know, is less than half the rate most people pay on their income tax."

But even raising income taxes on the rich won't be enough to restore the booming economy of the soak-the-rich tax years.

Back in March, Robert Reich made the case for a surtax on the super-rich.

Let Santorum and Romney duke it out for who will cut taxes on the wealthy the most and shred the public services everyone else depends on.

The rest of us ought to be having a serious discussion about a wealth tax. Because if you really want to know what’s happening to the American economy you need to look at household wealth — not just incomes.

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Over 90 percent of the nation’s financial assets – including stocks and pension-fund holdings – are owned by the richest 10 percent of Americans. The top 1 percent owns 38 percent.
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The 400 richest Americans have more wealth than the bottom 150 million Americans put together.

Given this unprecedented concentration of wealth – and considering what the nation needs to do to rebuild our schools and infrastructure while at the same time saving Medicare and reducing the long-term budget deficit – shouldn’t we be aiming higher than a “Buffet tax” on the incomes of millionaires?

There should also be a surtax on the super rich.

Yale Professor Bruce Ackerman and Anne Alstott have proposed a 2 percent surtax on the wealth of the richest one-half of 1 percent of Americans owning more than $7.2 million of assets. They figure it would generate $70 billion a year, or $750 billion over the decade. That’s half the savings Congress’s now defunct Supercommittee was aiming for.

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The wealth gap is widening into a chasm. A surtax on the super rich is fair — and it’s necessary.

There were both repug and Democratic bills in Congress proposing such a surtax. The repug one - from a Rep. Crawford - is a fake, offering pennies in surtax in return for wholesale gutting of the social compact. Down with Tyranny on the other:

Last year Sen. Bernie Sanders (I-VT) and Jan Schakowsky (D-IL) introduced a real millionaires surtax bill in each House. Conservatives killed the bills, of course, but the Congressional Progressive Caucus is planning on reintroducing their ideas as part of their budget proposal this year. Sanders proposal was paired with his legislation eliminating tax breaks for Big Oil. “It would be morally wrong for the United States to balance the budget on the backs of the most vulnerable people in our society while asking nothing from the wealthiest," he said at the time. In fact, he says it all the time. It's been a hallmark of his career-- which is why he's the only incumbent Senator on the Blue America Senate page. Bernie's bill called for a 5.4 percent surtax on adjusted gross incomes over $1 million would raise as much as $50 billion a year. “In the midst of the worst recession since the Great Depression, America's middle class and working families have already paid a very heavy price in terms of lost jobs, lost homes, lost wages, and lost opportunity,” Sanders said. “The time has come to ask the wealthiest in our society and the most profitable corporations in America to help our nation address its deficit crisis.”

Superficially, the Beltway media may equate what Crawford is proposing with what Sanders and Schakowsky tried to get passed. But the two things aren't really alike. Crawford further penalizes working families and helps entrench plutocracy in this country. Bernie's legislation would strike a blow for economic justice and for democracy itself. That simple.

For thirty years, the rich have been gobbling up the fat of the land while the workers who build the economy slowly starved.

I say merely a surtax on wealth and restored top tax rates to 90 percent are not enough. We can calculate how much of the nation's wealth today's billionaires have stolen - through criminally low tax rates - and should demand the motherfuckers pay it back.