Thursday, April 15, 2010


Well, another tax day has passed us in the good ole USA. And as usual, the Teabaggers picked up their signs and went out a-marchin'.

But what really interests me (since anyone who knows anything about US government and economics knows the Teabaggers have about as much ground to stand on as an astronaut doing a space-walk) is how every year CNN finds some dude to talk about tax reform. And, year after year without fail, it's the flat tax.

Now, it's quickly becoming uncool in some political circles (on the right) to use the word "progressive." (Mostly because conservatives are by definition against progress. Before anyone argues that this is a generalization, consider how the right approaches science. You don't see labor unions calling for the construction of Intelligent Design museums.) But, once upon a time, we had a progressive income tax in this country.

That meant that the more money you made, the more money you paid.

But the flat-tax means everyone gets charged one simple percentage. No if ands or buts.

The problem with the progressive tax wasn't the progressive tax; it was the government and corporations. Corporate lobbyists (you know them, they're the people that actually run our government ... well, them and the unelected bureaucrats) could throw money (and other promises, like sweet jobs and speaking tours) at elected officials and get more and more exemptions added to the tax code.

Until today, when you practically need a lawyer to understand the red tape. And you can drive an armored truck through the loopholes.

Some complications in the tax code benefit working people. It's nice to get a rebate; it's like the government recognizes how hard you work for your money and gives you a tiny little tip of the hat. (Whereas they spit on us the whole rest of the year.) But for the most part, the corporations hire entire departments of people, lawyers and white-collar workers, to figure out how to keep their profit from being converted into taxes.

Because heaven forbid the Fortune 500 and their billions in profit should actually pay for my healthcare, education, or roads. Heaven forbid they should have to give anything back.

You know what, Teabaggers? There are bigger problems than a little bit of your weekly paycheck going to what is admittedly a sprawling, out-of-touch, bloated central government.

What about the faceless corporation that uses you every day of your life to make money? You do the work; you make them thousands, if not millions of dollars every day, and they send you home with chump change. And you scream because the government touches a fraction of a fraction? You're being raped at work and you scream bloody murder because the government is, by equivalent, undressing you with its eyes?

It's foolish. The only entity that would benefit under a flat tax is the corporations.

Let's take three families as our example: a family of the "working poor," a union family from the "middle class," and a wealthy family, maybe from a law background.

Family A, between several low-wage jobs, pulls in $20k a year. They're just above the poverty line (which I myself haven't been above since I graduated college and moved away from home). They can feed their kids and make their rent, whatever. But the parents work long hours, maybe three or four jobs between them or another adult in the family. (I'm not pulling this out of the ether; this is the way it goes in, say, Harlem. Read No Shame in My Game for the deets.) If they pay 10% in taxes, that's $2,000. In their context, that family can't afford to lose that much money. That could be school supplies, three months of groceries, rent or mortgage payments. You start to worry if you can keep shoes on your children's feet. Maybe your kids have to get jobs as teenagers just to help make ends meet, so they can't do as well in school. 10% is a death-blow. Don't even mention health insurance.

Family B, maybe there's two incomes, but one's primary and one's backup. (This is how my parents live.) There's a house, a couple kids, and a couple cars - because, of course, we don't have any goddamn mass transit. If they make, say, $80k, they're doing good. That's about middle class. (With apologies to Senator John McCain.) If they have to pay 10%, that's $8,000. By no means does that signal total demise, but it might make it hard to send both kids to college (as my sister and I found out - I went to state college, she's having trouble continuing her education). It might make it hard to make a car payment here and there, to make renovations to the house, to take care of a sick relative who isn't covered by insurance. The fact of the matter is, the gains made by the labor movement - which brought blue-collar workers into the middle class, previously a realm for professionals and business owners - are being rolled back. More and more of these people are getting foreclosed on, losing their factory jobs, just plain losing out. 10% is precarious for them.

Family C. Ah, Family C, you only think you're middle class. (Of course, compared to the super-rich, who, like those below the poverty line, we've left out of our discussion so far, you are.) Let's say for the sake of argument that only one of the parents work, and they make 163k. Easy enough for a decent lawyer, as long as they're not a public defender. They probably have the nice house in the suburbs or on the coast, can take a foreign vacation every year or two. Don't have to worry about any but the most tragic illnesses, disasters, acts of god. 10% of that income is 16,300. Is that a lot of money? Yes. Can the lawyer live without it? Probably. But again, heaven forbid they forego a new car this year, or can't renovate the kitchen.

We can see as the income goes up, the 10% tax means less and less. To the top 1% of income earners - those who do not live on an hourly wage, but just get boatfulls of money dumped in their account for having gone to business school - 10% is laughable. 10% of a million dollars is only $100,000 - that doesn't matter a goddamn bit when you've got the other $900,000 to play with. Ridiculous executive bonuses are the same way.

But if you live below the poverty line, if you make $10,000 or less, 10% is $1,000, and that could be the difference between a studio apartment in the bad neighborhood and sleeping in your car with a couple stray dogs to keep you warm.

Let's not have a flat-tax. Let's pour the obscene Fortune 500 profits into free housing, healthcare, and food for everyone, huh? I mean, I know that's socialism and all, but this flat-tax bullshit is just lazy.

1 comment:

comrade x said...

Epic post... a one- two punch of economic logic.