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Posts Tagged ‘tax code

Four GOP Presidential Icons on Tax Fairness and Values

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Three Republican Presidential Icons Who Advocated Tax Fairness

Bruce Bartlett, in the Fiscal Times, makes a really good argument for raising taxes on the wealthy, especially on those who receive capital gains, dividend, and inheritance tax breaks.

What is novel about Bartlett’s argument is that he uses four Republican Presidential icons to make his case.

At least through the 1980s, special tax breaks, such as those for dividends and capital gains, were viewed as unfair and unjustified. Indeed, Ronald Reagan was among those who decried the capital gains break because it meant that rich people, who get most of their income from capital, paid less taxes than the average working man. Consequently, as part of the Tax Reform Act of 1986, he agreed that income from capital gains and wages ought to be taxed at the same rate.

Reagan was building on long tradition by Republicans of demanding fairness in the tax code, which, among other things, meant making sure that capital and labor were treated equally. For example, in his first State of the Union Address in 1861, Abraham Lincoln said, “Labor is prior to and independent of capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration.”

In 1910, Theodore Roosevelt excoriated big corporations and wealthy men for rigging the system in their favor and not paying their fair share of taxes.

    The true friend of property, the true conservative, is he who insists that property shall be the servant and not the master of the commonwealth; who insists that the creature of man’s making shall be the servant and not the master of the man who made it. The citizens of the United States must effectively control the mighty commercial forces which they have themselves called into being….

    We grudge no man a fortune in civil life if it is honorably obtained and well used. It is not even enough that it should have gained without doing damage to the community. We should permit it to be gained only so long as the gaining represents benefit to the community. This, I know, implies a policy of a far more active governmental interference with social and economic conditions in this country than we have yet had, but I think we have got to face the fact that such an increase in governmental control is now necessary.

    No man should receive a dollar unless that dollar has been fairly earned. Every dollar received should represent a dollar’s worth of service rendered – not gambling in stocks, but service rendered. The really big fortune, the swollen fortune, by the mere fact of its size acquires qualities which differentiate it in kind as well as in degree from what is possessed by men of relatively small means. Therefore, I believe in a graduated income tax on big fortunes, and in another tax which is far more easily collected and far more effective – a graduated inheritance tax on big fortunes, properly safeguarded against evasion and increasing rapidly in amount with the size of the estate.

In 1954, Dwight Eisenhower said that everybody should pay their fair share and denounced unjustified tax cuts. “An unwise tax cutter, my fellow citizens, is no real friend of the taxpayer,” he said.

In short, the real debate on the Buffett rule is about fairness. Its particulars are less important – especially since it has no chance of passage at this time – than the debate that will accompany it. If Republicans are successful in conveying the message that it’s okay for rich people to pay less than working people then this will frame the forthcoming budget debate in a particular way….

If history proved any answers, the one answered by these four Republican presidents is that labor should be taxed at the same or lesser rate than capital gains and inheritance because labor is inherently worth more to society.

Something to think about as discussions on taxes and tax rates continue throughout the year.

Related:

Have the Rich Ever Paid a Fair Share of Taxes? (Part 1)

Have the Rich Ever Paid a Fair Share of Taxes? (Part 2)

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Written by Valerie Curl

April 20, 2012 at 10:35 AM

My letter to the President

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President ObamaBREAK UP THE MEGA-BANKS! Read “13 Bankers.” Limit bank size to $100 Mil and support the Volker Rule. SUPPORT Prof. Lessig’s Change Congress proposals. Give Congress back to the people, rather than fostering complete ownership of the US economy and Congress by oligarchies.

Andy Jackson bucked the Senate (aka the Millionaires Club – sound familiar? ) and Biddle to decrease the power of bank oligarchs. TR took on JP Morgan’s railroad monopoly to ensure competitiveness in the American economy and won; then he went on to break up the monopoly of Standard Oil, ushering in an era of growth.

FDR took on the banks who caused the Great Depression with their unbridled speculation and created a regulatory system that kept the financial system sound for most of the following 60 years.

The Dodd bill before the Senate is a sham in far too many respects. It does little to prevent the kind of crisis experienced on Loyd Blankenfein, CEO of Goldman Sachs2008…and contains far too many “carve outs,” exceptions, and regulatory discretion (so how did that work out over the last decade?) Numerous studies show that any bank with more than $100 mil in assets does nothing – zip – to increase global competitiveness, encourage real economic growth, or make our financial system globally competitive and safe. On the contrary, studies how, megabanks actually harm our financial and business health.

Mr. President, if you really care about business, the U.S. economy, and average working-class people, you will demand a much better, much stronger bill than the current Dodd bill. You will over-rule those in your administration who argue for the near status quo, with only few minor tweaks. Those people do not argue for the people of the US. They argue for the oligarchs. They still remain captured by the ideology of “whatever is good for banks is good for the economy.” Biddle and JP Morgan argued the same ideology, but time proved them wrong. Monopolies and regulatory “carve outs” and slanted tax structures that provide for corporate welfare harm the overall economy and depress entrepreneurialship.

If you care about “putting the people first,” you will support Prof. Larry Lessig’s Change Congress ideas and the campaign finance bill put forth by Sen. Byron Dorgan.

Either this country belongs to the oligarchs – those people mentioned in Citibank’s 2007 financial analysis – or it belongs to the “People.”

You have to take a stand. Are you with the people who want – and deserve – opportunity or are you with the oligarchs who have bled the country to satisfy their own, albeit greedy, interests?

We, the People, demand government be given back to the people by definitively breaking the campaign financing link between oligarchs and elected officials, and to set our entrepreneurial community and economy free from the risk and speculative forces dominating Wall St. We demand open and free competition among and within industrial sectors. We demand the elimination of corporate welfare through our tax code and the basic entrepreneurial right, free of monied influence to determine policy and legislative code.

If you cannot or will not do these two things, then how are we, the American people, to believe in you?

If you cannot – or will not – give the American people back our government, free from overwhelming lobbyist influence and money in which the appearance and actuality of control by oligarchs controls policy, you betray your trust amongst the People. And in that failure, you give rise not just to Republicans in the next election but to continued crises and the economic decimation of the People.

Mr. President, we, the People, deserve better than to be captured by oligarchs.

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