Tax Breaks For The Wealthy Harmful
Corporations and big business have obtained tax reductions over the past few years that have left them to prosper while the average American suffers. According to Mother Jones, the top one-hundredth of one percent of Americans make an average of $27 million per household, while the average income of 90% of Americans is $31,244. This extreme income inequality, which is among the worst in comparison to all other countries in the world, has risen over the past few years after massive tax cuts have left the rich richer, the government poorer, and the people in need. While corporate profits rise without any increase in taxation, the average American is left behind, and the government-sponsored programs that provide necessary services for ordinary Americans are cut.
The right wing has been disproven time and time again on this issue: tax cuts for the wealthy do not assist in economic recovery. Those tax cuts, given freely with the best intentions of allowing the rich to use that money to create new jobs, do not do as they intend. The rich pocket the extra money they do not have to give to the government, rather than using it to raise the living standards of their employees or alleviate unemployment. There is economic evidence of this. Trickle-down economics, otherwise known as Reaganomics, did not work. Paul Krugman noted that “…while the rich got much richer, there was little sustained economic improvement for most Americans.
By the late 1980s, middle-class incomes were barely higher than they had been a decade before — and the poverty rate had actually risen.” Neither did the Bush tax cuts of 2003 result, in job creation, and the same result can be expected in the future.
So, in a time of economic recession when jobs need to be created and the people need assistance, corporations and big business must do their part to contribute. They cannot be given a free ride while the rest of America suffers.
Tax cuts are not the answer.
If taxes were raised and collected on the wealthy, even relatively small taxes that left the majority of their wealth intact (and still left them many times wealthier than the average American), the government would have the necessary funding to create new jobs and maintain essential programs such as Medicare, Medicaid, and Social Security, that are used by ordinary Americans.
Standing up to Wall Street and big business has become the creed of many individuals and organizations that look to change the drastic wealth inequality that has developed over the last few years. Huge protests on Wall Street have been held frequently over the past few months, including one attended by union members and their supporters in April, whose goal was to “force a which-side-are-you-on movement for U.S. senators on the issue of Wall Street reform…Are they with the American people or are they with the Wall Street banks?” Another protest in May, attended by over 20,000, focused on education cuts in the midst of the lowest taxes for corporations and businesses on Wall Street. One participant stated, Wall Street recovered, hedge funds got stimulated, and now they want to lay off teachers and close day care centers…We’re going where they sent the money…” Huffington Post reports: “Organizers claimed the city could prevent budget cuts by reinstating the state's ‘Millionaire Tax,’ ending subsidies for large companies that failed to meet job-creation targets and renegotiating city contracts with the big banks.”
National Nurses United (NNU) just held a rally in New York City on the steps of the New York Stock Exchange. June 22 was an International Day of Action with events all over the world supporting taxes on buying and selling stocks, bonds, derivatives, and other financial transactions. Many other nations – nations with better income equality – already have such taxes. The nurses rallied on the idea that, according to the press release for the rally, “In the U.S., hundreds of billions of dollars could be raised every year through such fees – revenue needed to repair the harm to Main Street communities so devastated by the abuses of Wall Street speculation and greed. The money can be used to create jobs and fund health care, education and housing.”
The NNU website lists some statistics that should alarm any ordinary American. Here are a few of them:
1. Corporate taxes are at historical lows. Yet $1.6 trillion, corporate profits for the third quarter of 2010 were the highest on record.
2. 42 percent of U.S. companies paid no U.S. income taxes for two or more years from 1998 to 2005.
3. The average CEO who was paid $27 for every dollar earned by an employee 25 years ago now gets a ratio of about $275 to $1.
Their solution: Make Wall Street pay. Rose Ann DeMoro, Executive Director of the NNU, said: “America has the wealth to end the despair and deprivation. It’s just being hoarded by those on Wall Street and corporate board rooms, and the politicians they elect and control to protect their privilege…To reclaim this nation, we have to start by making Wall Street pay to undo the damage that has caused immeasurable suffering while the high rollers on Wall Street, who created this crisis, are rewarded with bailouts, bonuses, tax cuts, and regulatory rollbacks.”
When corporations and the wealthy are already benefitting from tax cuts and are sporting record profits, why should they be given even more “assistance” with lower taxes, when that “assistance” benefits the wealthy alone, and not the people? The government has the opportunity to improve the lives of ordinary Americans, if it would only use its power of taxation to collect and allocate the funds necessary to provide healthcare, housing, education, and jobs to the entire country, all of which are needed by millions. Why is raising the living standard of the majority of the American population so abhorrent while a small minority is hoarding all the wealth?
As National Nurses United says: “Over the past 30 years, while wages have fallen or stagnated and insurance premiums and other basic costs skyrocketed, wealth has been shifted from working families to Wall Street. It’s not shared sacrifice when only working people make concessions.”
The people have played their part. Now it's time the robber barons do.