Fair taxation would help solve the problem of government revenue shortfalls

Fiscal crisis (difficulty matching expenditures and revenues) has been a recurrent theme for both national and state governments in recent years. It seems to me that most establishment politicians are wearing blinders when it comes to consideration of solutions.

In particular, here in New Jersey, Governor Christie has an ideological bias that precludes him from acknowledging the truth about the situation: Neither teachers nor state workers nor unions are to blame for the crisis; rather, years of tax cuts for the richest individuals and tax avoidance by the big corporations are the real culprits.

The wealthy and the economy-dominating corporations can afford to pay higher taxes. While much of the populace is struggling in the aftermath of the Great Recession, corporate profits are at record levels and wealthy households are experiencing a new Gilded Age.

Income disparities have widened considerably in recent decades. In 1980 the top 10% of earners accounted for 33% of the state population's total income. Now they account for almost 50%. Half of all income goes to just 10% of the population!

Nationally, according to the Campaign for America's Future, in 1955 the country's 400 wealthiest taxpayers had an average income of $13.3 million (in 2008 dollars) and paid 51.2% of that in federal income taxes. In 2008 they had an average income of $270.5 million and paid 18% of that in federal income taxes! As income disparities have gone way up, effective tax rates for the richest have gone way down.

Progressive taxation should mean higher rates for wealthier people. If a household making $50,000 a year is taxed at a 20% rate they have $40,000 to live on. If a household making $500,000 a year is taxed at a 40% rate they have $300,000 to live on. Yet the rich have successfully lobbied to get their rates lowered . . . as if they need more disposable income! Due to capital gains benefits and all kinds of esoteric deductions, wealthier households now often wind up paying at a lower rate than typical middle-class households.

"Warren Buffett said that he was taxed at 17.7% on the $46 million he made last year, without trying to avoid paying higher taxes, while his secretary, who earned $60,000, was taxed at 30%. Mr. Buffett told his audience, which included John Mack, the chairman of Morgan Stanley, and Alan Patricof, the founder of the U.S. branch of Apax Partners, that U.S. government policy had accentuated a disparity of wealth that hurt the economy by stifling opportunity and motivation."
http://tusb.stanford.edu/2007/07/warren_buffet_has_a_lower_tax.html

Millionaire's tax rate:
1945: 66%
1965: 55%
1982: 48%
2000: 36%
2010: 32%

Share of federal tax revenue paid by large corporations:
1950: 27%
1970: 14%
1990: 10%
2009:  8%

Share of federal tax revenue paid by workers' payroll taxes:
1950: 11%
1970: 21%
1990: 37%
2009: 42%

http://motherjones.com/politics/2011/02/income-inequality-in-america-chart-graph

"General Electric, the nation's largest corporation, had a very good year in 2010. The company reported worldwide profits of $14.2 billion, and said $5.1 billion of the total came from its operations in the United States. Its American tax bill? None [zero taxes paid]. In fact, G.E. claimed a tax benefit of $3.2 billion."
http://www.nytimes.com/2011/03/25/business/economy/25tax.html?pagewanted=all

Some people think that lowering taxes on wealthy investors and on large corporations enhances economic growth. But growth was higher back the fifties and sixties when the tax structure was more progressive than it is now.

 I'm running for State Assembly this year as a Green Party candidate. Our party says: Don't further burden those middle- and working-class citizens who are struggling to maintain a decent standard of living. Instead, get back to fairly taxing the bloated balance sheets of the super-rich and the "too big to fail" corporations!

http://GreenSteveForNJ.wordpress.com