President Obama's State of the Union speech tonight is supposed to include some tax cuts along with some tax increase proposals.
I am not in favor of lowering taxes on anyone. Our tax burden today, on average, is lower than it has been since the 1920s. About 43% of the people don't pay income taxes - but they do pay into Social Security and Medicare.
The government needs revenue. The right-wing's second purpose in cutting taxes - the first being to enrich themselves and their very wealthy supporters - is to starve government so that it can't do anything. They have said that repeatedly.
Government needs to do things but really can't do a lot with deficit spending now because the Republicans succeeded in blowing the national debt sky-high. So more revenue is needed. It doesn't have to come from the middle class. There are many ways to raise revenues.
In my book, Let's Do What Works and Call it Capitalism, I calculated that two changes in the corporate tax law and one in the inheritance law would yield billions in annual revenue. Closing the loophole on transfers of corporate assets to subsidiaries outside the country would yield about $2 billion a year. Eliminating the deferral of income taxes on profits made overseas would yield about $80 billion a year. However, there are many issues involved and such a change may have to be phased in, along with, possibly, a reduction in the corporate tax rate of 35% (which is not that big a deal since the average paid by corporations is about half that percentage). Elimination of the step-up basis exception in the inheritance would yield somewhere between $20 and $64 billion a year, depending on whose calculations are used - the White House in the first case and the Congressional Budget Office in the second. Obama is going to propose that change in the inheritance tax law tonight along with some other proposals that supposedly include a tax cut for the middle class.
Then we put a tax on Wall Street transactions. It could yield many, many billions per year.
Then we restore the progressive income tax, and start raising tax rates progressively on incomes above $250,000, with a top marginal rate somewhere around 60%. I haven't calculated the revenue from this, yet, but it is substantial.
Then lift the ceiling on Social Security withholding and increase the percentage of withholding on higher incomes both for Social Security and Medicare.
All of these changes right now would yield a surplus in the hundreds of billions of dollars. That's what we need to do the things that need to be done.
I am not in favor of lowering taxes on anyone. Our tax burden today, on average, is lower than it has been since the 1920s. About 43% of the people don't pay income taxes - but they do pay into Social Security and Medicare.
The government needs revenue. The right-wing's second purpose in cutting taxes - the first being to enrich themselves and their very wealthy supporters - is to starve government so that it can't do anything. They have said that repeatedly.
Government needs to do things but really can't do a lot with deficit spending now because the Republicans succeeded in blowing the national debt sky-high. So more revenue is needed. It doesn't have to come from the middle class. There are many ways to raise revenues.
In my book, Let's Do What Works and Call it Capitalism, I calculated that two changes in the corporate tax law and one in the inheritance law would yield billions in annual revenue. Closing the loophole on transfers of corporate assets to subsidiaries outside the country would yield about $2 billion a year. Eliminating the deferral of income taxes on profits made overseas would yield about $80 billion a year. However, there are many issues involved and such a change may have to be phased in, along with, possibly, a reduction in the corporate tax rate of 35% (which is not that big a deal since the average paid by corporations is about half that percentage). Elimination of the step-up basis exception in the inheritance would yield somewhere between $20 and $64 billion a year, depending on whose calculations are used - the White House in the first case and the Congressional Budget Office in the second. Obama is going to propose that change in the inheritance tax law tonight along with some other proposals that supposedly include a tax cut for the middle class.
Then we put a tax on Wall Street transactions. It could yield many, many billions per year.
Then we restore the progressive income tax, and start raising tax rates progressively on incomes above $250,000, with a top marginal rate somewhere around 60%. I haven't calculated the revenue from this, yet, but it is substantial.
Then lift the ceiling on Social Security withholding and increase the percentage of withholding on higher incomes both for Social Security and Medicare.
All of these changes right now would yield a surplus in the hundreds of billions of dollars. That's what we need to do the things that need to be done.
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