Posted by AzBlueMeanie:
Tax expert David Cay Johnston has an excellent essay this week about the 9 Things The Rich Don't Want You To Know About Taxes:
For three decades we have conducted a massive economic experiment, testing a theory known as supply-side economics. The theory goes like this: Lower tax rates will encourage more investment, which in turn will mean more jobs and greater prosperity — so much so that tax revenues will go up, despite lower rates. The late Milton Friedman, the libertarian economist who wanted to shut down public parks because he considered them socialism, promoted this strategy. Ronald Reagan embraced Friedman's ideas and made them into policy when he was elected president in 1980.
For the past decade, we have doubled down on this theory of supply-side economics with the tax cuts sponsored by President George W Bush in 2001 and 2003, which President Obama has agreed to continue for two years. You would think that whether this grand experiment worked would be settled after three decades. You would think the practitioners of the dismal science of economics would look at their demand curves and the data on incomes and taxes and pronounce a verdict, the way Galileo and Copernicus did when they showed that geocentrism was a fantasy because Earth revolves around the sun (known as heliocentrism). But economics is not like that. It is not like physics with its laws and arithmetic with its absolute values.
Tax policy is something the Framers left to politics. And in politics, the facts often matter less then who has the biggest bullhorn.
The Mad Men who once ran campaigns featuring doctors extolling the health benefits of smoking are now busy marketing the dogma that tax cuts mean broad prosperity, no matter what the facts show.
As millions of Americans prepare to file their annual taxes, they do so in an environment of media-perpetuated tax myths. Here are a few points about taxes and the economy that you may not know, to consider as you prepare to file your taxes. (All figures are inflation adjusted.)
Here is Johnston's bullet point list of the 9 things the rich do not want you to know about taxes:
- 1: Poor Americans do pay taxes.
- 2: The wealthiest Americans don't carry the burden.
- 3: In fact, the wealthy are paying less taxes.
- 4: Many of the very richest pay no current income taxes at all.
- 5: And (surprise!) since Reagan, only the wealthy have gained significant income.
- 6: When it comes to corporations, the story is much the same — less taxes.
- 7: Some corporate tax breaks destroy jobs.
- 8: Republicans like taxes too.
- 9: Other countries do it better.
For the details of each point, continue reading 9 Things The Rich Don't Want You To Know About Taxes.