Speaking of a Wealth Tax - Thom Hartmann: The No Billionaires Campaign

[Junkdrawer]

As Thom posted this transcript in Video & Multimedia, I don't think he'd mind if I reposted in its entirety:

I believe it's time we reconsider the role billionaires play in our economy and our society. In fact, I say it's time we outlaw billionaires by placing a 100% tax on any wealth over $999,999,999. Trust me, we'll all be much better off in a nation free of billionaires. Look around, the whole planet is in crisis. Europe is on the brink of collapse, the United States economy is sputtering out, freak climate-change induced weather is becoming more and more common, our streets are becoming the breeding grounds for social instability, and all the while there is a small cadre of very, very wealthy individuals – billionaires – who are sucking up more and more of the wealth that used to belong to working people.

Just consider these numbers: Post World War 2, all income levels in America grew together, and the lowest income level - the 20% poorest Americans - actually grew at a faster rate that the top 20% wealthiest Americans. During this time, billionaires were few and far between in America as wealth was more evenly distributed. But since Reagan , and since a new mentality was instilled in our culture that greed is good, and that the super-rich shouldn't be questioned or asked to sacrifice anymore for their nation, then income for the top has increased rapidly - while actually falling for the bottom. Since 1980, the top 1% has sucked up 80% of all the new wealth created. And, in 2010, the richest one percent of Americans received 93% of all of the new income earned that year.

And now there are over 400 billionaires in America. In fact, today, the richest 400 Americans - all of whom are billionaires - own more wealth than the bottom 150 million Americans COMBINED. The richest 6 members of the Sam Walton family - heirs to the Wal-Mart fortune and, again, all billionaires - own more wealth than the bottom 30 percent of Americans COMBINED. According to a recent study from the Federal Reserve, median net worth for middle class families dropped by nearly 40 percent from 2007-2010. That’s the equivalent of wiping out 18 years of savings for the average middle class family. And that money went to the richest 400 Americans - all billionaires - who collectively own $1.3 trillion worth of wealth. The issue is not punishing the wealthy.

The issue is acknowledging that billionaires have sucked up so much wealth out of our economy that the rest of us are drowning.
What's worse is the rest of us are working harder than ever. Productivity has steadily increased post-World War 2, and it used to be that income gains increased right alongside it. But around the time of Reagan, productivity and wages began to diverge. While productivity increased, wages stagnated. That's because all the extra profits made by increased productivity weren’t given back to the workers, but instead pocketed by CEOs and executives.
In other words, we're all working harder, but unfortunately by no will of our own have been forced to give up these fruits of our labor to the elites - to the billionaires whose wealth has exploded and continues to increase year after year.

And what have we working people been given out of this deal with the billionaires?

We've been given political corruption as billionaires like Sheldon Adelson and the Koch Brothers can now buy politicians and legislation to benefit their own selfish interests like tax cuts for wealthy people, deregulation for polluting oil corporations, and free trade for job out-sourcers.

We've been given gigantic transnational corporations - steered by billionaires - that can crush the competition of small business and kill the American entrepreneurial spirit. According to a newly released study by the New American Foundation, the number of entrepreneurs per capita in America has dropped by 53% since 1977. And since 1991, the number of Americans who are self-employed has dropped by more than 20%. Americans who use to be able to start their own businesses are increasingly being forced to join the ranks of the working poor - crowded out of the market by the billionaires' corporate domination.

We've been given financial instability as billionaires, having more money than they can spend in a dozen lifetimes, go to Wall Street to gamble. As author Larry Beinhardt has discovered, whenever tax rates drop below 50% - and the super-rich have a lot of hot money to play with - there are always subsequent economic crashes: It happened in the 1920's, it happened in the 1980's with the Savings and Loan crisis, and it happened just a few years ago with the housing bubble bursting.

Not only that, the billionaires have even denied us - and themselves – happiness. As a 2010 study by the Proceedings of the National Academy of Sciences found: "Emotional well-being rises with income, but there is no further progress beyond an annual income of $75,000. Low income exacerbates the emotional pain associated with such misfortunes as divorce, ill health, and being alone. We conclude that high income buys life satisfaction but not happiness." In other words, once your basic essentials are met, which can be achieved with a $75,000 a year income; any extra money doesn't make you any happier.

But above all else, our subservience to the billionaires has given us a perverse form of capitalism - corporate capitalism - which subjugates all the needs of our society like clean air, food and water, security, healthcare, education, retirement, and energy to the demands of quarterly profits. To the demands of billionaires who sit in corporate boardrooms and figure out what extra bit of profit they can squeeze out of their workers, out of the fracking wells, out of the Gulf of Mexico, out of bombs dropping on Afghanistan, out of healthcare premiums, and out of pensions and retirements. As Pulitzer Prize winning journalist Chris Hedges has routinely pointed out, corporate capitalism, if left unchecked, will kill us. And the way to put a check on it today is to cut off the spigot funneling what was once middle class wealth to the billionaires.

We can't say we weren't warned of the dangers that might come with the rise of the billionaires. Our most influential Founding Father, Thomas Jefferson, wrote exhaustively about the dangers of an aristocracy - or what the billionaires would have been called back in his day. As he wrote to George Washington in 1786, “ho’ the day may be at some distance, beyond the reach of our lives perhaps, yet it will certainly come, when, a single fibre left of this institution, will produce an hereditary aristocracy which will change the form of government from the best to the worst in the world…I shall think little also longevity unless this germ of destruction be taken out."

And as he wrote to John Adams in 1813 - re-hashing a debate the two had over the Senate, which at the time was hand-picked by wealthy state legislators, “The artificial aristocracy is a mischievous ingredient in government, and provision should be made to prevent its ascendancy...I think that to give them power in order to prevent them from doing mischief, is arming them for it, and increasing instead of remedying the evil.” We were warned by President Grover Cleveland - the only Democrat elected during the Robber Baron – who, in his 1888 State of the Union address, said, “As we view the achievements of aggregated capital, we discover the existence of trusts, combinations, and monopolies, while the citizen is struggling far in the rear or is trampled to death beneath an iron heel. Corporations, which should be the carefully restrained creatures of the law and the servants of the people, are fast becoming the people's masters."

And we were warned by Franklin Roosevelt in the aftermath of the Great Depression, when in 1936 he called out "Economic Royalists" who today would be billionaires, saying, “A small group had concentrated into their own hands an almost complete control over other people's property, other people's money, other people's labor, other people's lives. For too many of us life was no longer free; liberty no longer real; men could no longer follow the pursuit of happiness...These economic royalists complain that we seek to overthrow the institutions of America. What they really complain of is that we seek to take away their power. Our allegiance to American institutions requires the overthrow of this kind of power.” We as a nation listened to Roosevelt's warning and got behind him when he put in place a 94% top income tax rate on the billionaires.

Republican President Dwight Eisenhower kept that tax rate at 91% during his administration. And even Richard Nixon embraced a 70% tax rate on the billionaires. Today it's 35%, and we know where that's gotten us. Our nation does not thrive on the goodwill of billionaires. We thrive on the hard work of average Americans who wake up every day, go to work, care for their families, and raise children to believe that America is a "WE" society - a place where we all work together. Not a place where we wait for scraps to fall off the billionaires’ dining table.

Billionaires are not job creators, they are not smarter than us, they are not harder workers. They are hoarders - plain and simple. If they had to convert their wealth into actual things, they wouldn't be able to even move around in their lavish mansions. We need to bring back common sense taxes on wealth, including an absolute tax above one billion dollars that once and for all prevents the ascendancy of predatory billionaires in America. Time to join the "No Billionaires" campaign!

[devany]

1. Save the Rich Billionaires

Mr. Obama has the right ideas in the wrong order: health care, jobs and tax reform. We need to save some of our rich folk first.

An entire generation of tax expenditure babies have been enriched by the tax code to the point where the top 10% have accumulated 75% of the wealth and the bottom 60% are reluctant to spend the 3% that they still have left. The middle class complain about a few million workers being laid off and about their wages and net wealth being reduced as a result of the recession. The middle class have failed to lift themselves by their own bootstraps and are simply treading water with the 2% payroll tax holiday, the extended unemployment benefits and the generous food stamp allowances. The rich can no longer depend upon the poor and middle class to get out of this economic malaise.

When people say the wealth gap and the rate of unemployment weren’t this bad since the Great Depression I just remind them of how much fun it must have been living during the Roaring 20’s with just a 24% top income tax bracket. No one should be bummed out by tax reform after the depression when rates were increased to: 63%, 79%, 81%, 88% and finally to 94% in 1944.

The well-to-do have become accustomed to a redistribution of income through tax expenditures that each year amount to about the total paid by the workers for Social Security and Medicare. This massive redistribution of income has actually been a redistribution of wealth because the well-to-do don’t spend their money like the middle class used to do.

For the sake of the rich we need to steer the ship away from the iceberg by eliminating payroll taxes and paying for Social Security and Medicare with a 2% net wealth tax (excluding $15,000 cash and retirement funds). That will save the middle class and most of the rich by giving middle class consumers more to spend and creating jobs and profits in the process. For the wealthy, a 2% wealth tax is no different than a 2% rate of inflation in a good economy.

The middle class will soon suffer when they have to get out of the house and get back to work. We also need to really “punish” some of the wealthy who forgot how to run a business by lowering the income tax rate to 8% and eliminating capital gains, estate and gift taxes. These changes will create business freedom and complement the negative reinforcement (“use it or lose it”) of the wealth tax. Businesses will have 7% more money to hire workers without payroll taxes. By enabling investors to buy and sell capital assets without being taxed and by providing a 92% after tax return on investment, the new tax code would greatly help entrepreneurs and the idle rich will get what they deserve.

Completing the perfect tax reform plan would be a 4% value added tax (VAT) on business and an 8% corporate tax rate for the most competitive business rates in the world. The current 35% corporate rate would be eliminated and no longer prevent the return of foreign profits which could add trillions to domestic investment.

Imagine a sustainable economy that does not depend on government spending or tax expenditures.
Imagine a stable economy based upon broad tax bases with the lowest rates possible. Eugene Patrick Devany, JD, MPA
Read more at www.TaxNetWealth.com