R i g h t a r d i a: Republicans play the same old tax game

Wednesday, October 19, 2011

Republicans play the same old tax game

Most of the candidates in the GOP Las Vegas debate talked about taxes, namely the Cain 9-9-9 plan.

Michelle Bachmann seemed to be the only candidate who wanted to talk about jobs.

Why does the GOP constantly push "tax reform?"

First, many Americans think these tax cuts benefit them when actually the tax cuts have primarily benefited the most affluent Americans.

The overall objective of the GOP for taxes is simple.

1. Make the Us tax system regressive which means the working class and the middle calls take the brunt of the US taxes. Of interest, municipal taxes, real estate taxes and sales tax are regressive taxes. The only progressive tax is the Federal income tax. The GOP plutocrats hate progressive taxes.

The GOP has been successful in flattening the tax tables for the wealthiest Americans. Income tax was 90 per cent on top earning Americans after World War 2. In 2011 people making $ 379,150 and above will pay a 35 per cent tax rate.

The short term capital gains tax was recently 28 per cent, but Bill Clinton lowered it to 20 per cent. GW Bush lowered it again to 15 per cent.

America wealthiest families make most of their money in investments that are subject to the capital gains tax. This means millionaires and billionaires pay a substantially lower tax rate than the average American. Warren Buffet has mentioned this on many occasions.

The corporate income tax for the large c-corporations is usually 35 per cent. However, there are so many exemptions, few c-corporations pay this rate. In fact, many Us corporations pay no corporate income tax. The smaller s-corporations are not subject to corporate income tax at all.

Two out of every three United States corporations paid no federal income taxes from 1998 through 2005, according to a 2008 report by the Government Accounting Office. Cutting the corporate tax rate would only make sense if the numerous corporate exemptions were eliminated. However, cutting it to 9 per cent would give the US the lowest corporate tax rate of the industrial counties.

Ireland has the lowest statutory corporate tax rate (12.5 per cent) and was internationally criticized for this corporate rate when the country became insolvent.

The World Bank and GAO data indicate that the US effective corporate tax rate is lower than 35 percent and lower than several developed and some European economies.