For the first time ever, taxes on the 400 richest Americans were lower than taxes on everyone else

Originally published at: https://boingboing.net/2019/10/08/gilded-age-plusplus.html

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So much winning.

Sure, the wrong people are winning. But nobody explained to working class Trump voters they personally wouldn’t do any winning.

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We tried. But close to fifty years of unremitting propaganda worked better. Communism was bad and had to be destroyed. Capitalism is worse and must be destroyed

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Yes! The system works!

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Here’s a super nicely done one that was posted in the trump round-up thread:

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At that is super-important and necessary, but I get annoyed anytime I see phrases like, “The tax increases would bring in … enough to pay for universal pre-K, an infrastructure program, medical research, clean energy and more.”

Federal taxes do not pay for federal programs. As per MMT, federal spending happens first, through appropriations, and then taxes come along later to cycle the money back in. (See: defense budget.) Framing things as “taxes pay for” plays into the hands of the deficit scolds, who will always use deficit-fear-mongering to knock down spending on progressive programs.

The purpose of progressive taxation is to reduce wealth and income inequality, perhaps down to a level that is something less than grotesque.

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Usually the saying goes that “shit rolls downhill”. As true as that usually is, somehow in the case of Orange the Pyramid Topper, it rolled uphill.

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I am very confused by this paragraph. Our federal taxes do not pay for federal programs, but instead they spend money and that money is replenished by taxes? Isn’t that just paying for something? What is the distinction here? And if federal taxes don’t pay for federal programs, what does? And where do our federal taxes go?

I also don’t see how saying that taxes pay for programs plays into the hands of deficit hawks, since it seems like their primary argument should be for keeping income and expenditures balanced. Trying to break apart income and expenditures seems like it would make it harder to create a balanced budget.

I agree that one of the side effects of progressive taxation is to reduce the wealth gap, but that’s a secondary benefit over simply collecting money to run services so your government can continue to function.

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The biggest change seems to be a cultural/psychological one of turning most people from workers to management/administrators. Now your average republican voter identifies with the billionaires, rather than viewing themselves as the worker oppressed by the wealthy. It has lead to generations of voters ranting about “our taxes” as why they oppose the estate tax and top corporate tax and other things that they would never pay.

Apparently the price to get most Americans to sell out was a house in the 'burbs and a car, and once enough got it then they became blind to the fact that they were still being exploited.
Never forget - Fuck the Man, he’ll steal everything from you he can

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The problem is that what happens in reality isn’t explicitly framed as MMT, which it really should be at this point. But that would wreck the basis of the whole “we are the defenders of the American taxpayer” lie that movement conservatives have been pushing for 40 years.

Worse, since 2008, access to those two things has been available to fewer and fewer of these temporarily embarrassed millionaires.

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Since the U.S. went off the gold standard in the 1970s, the dollar is untethered to gold or anything “real”. The U.S. government is the sole issuer, and can issue/create dollars at will. This is the simple reality of the situation. The big banks and Wall-Streeters understand this, and use it to their advantage. I’d highly recommend learning about MMT; i.e., anything with Stephanie Kelton.

At one point former Fed Chair Ben Bernanke was dense enough to say the quiet part out loud:

“We simply use a computer to mark up the size of the account… It’s much more akin to printing money than to borrowing.”
– Ben Bernanke (on 60 Minutes, March 2009)

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I don’t see how this is relevant to using taxes to pay for stuff. Yes, the value of the dollar can change over time, although it does with a gold standard too. The government has more control over the price of the dollar, but only indirectly via changing interest rates or increasing/decreasing the supply. This is the entire point of monetary policy.

From a practical standpoint, your taxes are being used to pay for services. Yes, there is some fuckery going on that undoubtedly makes a ton of money for the 0.1%, but that’s largely in parallel with the taxes, not directly affecting them.

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We lack the nuance to distinguish between crony capitalism, corporate fascism, and kleptocracy. I think what most of us want for our children, if we thought about it seriously, would be some form of mixed economy and social democracy.

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But part of the point is that what the federal government spends doesn’t have anything to do with what it takes in as taxes. For instance, in the last two years, the federal budget deficit has been $779B and $665B. So it is inherently misleading to say that taxes pay for programs, when the spending on programs is actually funded from a combination of revenue (including taxes), debt, and printing money.

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Just because the federal government can’t balance the budget doesn’t mean there isn’t a budget. It just means they are mismanaging it.

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In a logical word, deficit scolds would love raising taxes to pay for things voters want. “You want universal health care, you better be prepared to have the super-rich be very slightly less rich, buster.”

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Mismanagement implies there has been an attempt at management. There is clearly no attempt for there to be any relationship between spending and revenue. The government spends what it’s going to spend. Any shortfall just goes straight to debt.

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Of course, the rich do pay most of the income tax collected.

Being able to create dollars at will changes everything. The federal “budget” has no input, only outputs. Viewing it like a household or state-level budget is bullshit. Viewing the federal “deficit” like a standard budget shortfall is bullshit. The federal budget “debt” simply represents the number of dollars that the government has injected into the economy; the public “deficit” is the private surplus. MMT baby!

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