creators.com opinion web
Liberal Opinion Conservative Opinion
David Sirota
David Sirota
21 Nov 2014
A Big Election With Little Local Journalism

On a warm October night toward the end of the 2014 campaign, almost every politician running for a major … Read More.

14 Nov 2014
Wall Street Takes Over More Statehouses

No runoff will be needed to declare one unambiguous winner in this month's gubernatorial elections: the … Read More.

7 Nov 2014
Tuesday Probably Meant Nothing for 2016

The dramatic, across-the-board victory engineered by Republicans in Tuesday's elections would seem to bode … Read More.

Economic Death and Millionaire Taxes

Comment

For most of us, Benjamin Franklin's words in 1789 still apply: "Nothing is certain but death and taxes."

However, millionaires, by definition, are not most of us. While they can't stave off the grim reaper, they can convince lawmakers to shield them from the taxman and balance budgets on the backs of everyone else.

That's what's going on in revenue-starved states right now: governors are preparing to slash middle-class programs and are resisting calls to raise taxes on the wealthy.

Nowhere is this class war more pronounced than in New York — the home of the financial thieves who killed the economy. Having halved its top tax rate over the last three decades, New York today faces a $15.4 billion deficit. In response, Gov. David Paterson (D) might have asked his state's Gordon Gekkos to pay higher taxes, especially considering the idea's popularity in polls and the news that Wall Street's elite are still swimming in money. Indeed, according to CBS News, the allegedly beleaguered financial industry is so flush with cash it plans to dole out $14 billion in executive bonuses this year.

Yet, far from forcing robber barons to pay their fair share, Paterson told the New York Times that taxing millionaires is "the last place you want to go." Instead, he proposes to punish Joe and Jane Six-pack by hiking the taxes and cutting the programs that disproportionately impact them. Specifically, he wants to increase sales taxes, college tuitions and licensing fees and slash education and low-income health programs.

Paterson defended his proposals by telling PBS's Bill Moyers "that when you tax the wealthy in the downturn of an economy, you have an automatic link of a loss of job opportunities and then a loss of population." The rationale sounds intelligently pragmatic — until you peruse the relevant data.

When New Jersey recently raised taxes on the wealthy, Princeton University researchers found that most of those who later left the state moved to places with higher taxes, meaning there is no causative link between levies on the rich and residential flight.

Likewise, when New York temporarily raised high-income taxes after 9/11, the state added 127,000 jobs, meaning no link exists between higher taxes on the rich and job loss.

During times of surpluses, governors could get away with the unsubstantiated nonsense Paterson is peddling. But now, 43 states confront shortfalls, and because states cannot run deficits, the dollars and sense of these arguments matter. Lawmakers must choose what policy will create the best chances for economic recovery: spending cuts or tax increases, and if the latter, on whom?

The answer isn't rocket science. As Nobel prize-winning economist Joseph Stiglitz says, "Reductions in government spending on goods and services (are) likely to be more damaging to the economy in the short run than tax increases focused on higher-income families."

That's because government cuts automatically decrease the consumptive spending programs that broadly stimulate the economy whereas tax increases, when aimed at the wealthy, more often impact funds socked away in savings. "The more that the tax increases (are) focused on those with lower propensities to consume (i.e., the rich)," Stiglitz notes, "the less damage is done to the weakened economy."

Incredibly, Paterson acknowledges how destructive his budget is, admitting that his own "education cuts are draconian, the health care cuts are prohibitive [and] the taxes that are being levied...are not fair."

So why would he — or any governor — nonetheless try to legislate such idiocy? Because millionaires are the ones who finance gubernatorial candidacies, and their campaign contributions buy tax protection. The result is what another New York royalist promised.

"Only the little people pay taxes," said Leona Helmsley — a doctrine that will exacerbate this recession if states keep making it true.

David Sirota is the bestselling author of the books “Hostile Takeover” (2006) and “The Uprising” (2008). He is a fellow at the Campaign for America's Future and a board member of the Progressive States Network — both nonpartisan organizations. E-mail him at ds@davidsirota.com.

COPYRIGHT 2008 CREATORS SYNDICATE, INC.



Comments

1 Comments | Post Comment
Sir;... Good for you... But let me warn you... Talk is cheap unless your income depends upon it, and as my income often has, I am richer in words than in money... You should be careful of words like thief... You might get away with pointing that word at an entire class as it is hard to argue against the fact that they have stolen the country... In fact, only one thing stands between the working class and slavery, and it is only our self conception as free people...But; then, only one thing stands between the rich and ruin... Simply enough, until they have it all they cannot be destroyed... Property, liberty, society, or economy are only examples of forms of relationship.... If it were possible for one person to have all the gold as a king Midas may have, then gold would no longer be a form of relationship, but a point only of contention... Or; if no one had any gold, it would have no meaning or value for anyone... For property, or liberty, or America to have meaning we all have to have a bit of it... Our problem is simple: out of small inequalities are great inequalities made of that can in the end find a few owning all....Property; the sure sign of wealth once supported society and government.... Taxes drove its price down, and forced it to be profitable... Taxes on labor has put the burden of society primarily upon working people, while the relatively light taxes on property raised its price, and put it out of the reach of workers... Since we must work twice as hard for the money we have, and borrow to have any property, the value of money became a force in itself, extorting wealth to have wealth ... And get this: It is all legal; even if no better method could be divised for destroying society, it was, in retrospect, entirely natural... This society taxed the rich, and for that reason gave them the greatest level of control in government.. .Having the control, they naturally shifted the burden... If great inequalities were in this fashion created; the natural want of democracy in this land was made impossible to satisfy... Look at how the rich pervert our government, and how money decides every issue... If the rich were paying their way they would demand in public that their concerns be addressed... Instead, money sways the political process, and then money never makes a fuss about the real issues before us... Instead, our government is hamstrung with moral issues that never should be subject to a vote... THAT is the government we are allowed, one as broke as ourselves; no longer able to peddle our property for nothing to settle its debts, -spending like us, money it will never possess to buy a moment of fantasy... But never forget: It is legal... And if that is so; then it is law, as a form of relationship, that has lost all meaning, along with government, and property because it is all owned by the rich..... .Thanks...Sweeney
Comment: #1
Posted by: James A, Sweeney
Mon Dec 29, 2008 6:48 PM
Already have an account? Log in.
New Account  
Your Name:
Your E-mail:
Your Password:
Confirm Your Password:

Please allow a few minutes for your comment to be posted.

Enter the numbers to the right:  
Creators.com comments policy
More
David Sirota
Nov. `14
Su Mo Tu We Th Fr Sa
26 27 28 29 30 31 1
2 3 4 5 6 7 8
9 10 11 12 13 14 15
16 17 18 19 20 21 22
23 24 25 26 27 28 29
30 1 2 3 4 5 6
About the author About the author
Write the author Write the author
Printer friendly format Printer friendly format
Email to friend Email to friend
View by Month
Marc Dion
Marc DionUpdated 24 Nov 2014
Deb Saunders
Debra J. SaundersUpdated 23 Nov 2014
Steve Chapman
Steve ChapmanUpdated 23 Nov 2014

24 Jan 2014 The Economic Case for Paid Leave Laws

18 Jul 2008 "Centrists" Running the Asylum

23 May 2014 Christie's Budget Choice