It is time that we stopped thinking about fairness, goodness, and justice. Fairness went out the window with Reagan. There never was enough goodness to go around. And justice…well, we’ve got five Right Wing Corporate Lawyers serving on the Supreme Court. How do you like your justice now?
So let’s stop worrying about whether our rich and super-rich (because we’ve got a lot of those now) brethren will be treated unfairly. We have an economy, that–because of Rich White Men on Wall Street–dropped about ten stories and hit the street with a splat in January of 2009, (just coincidentally…oh yeah…big coincidence) as our new Democratic President was about to take hold of the economy.
Then, suddenly, as all that money went out of home values, out of 401K values, out of pension and state government asset values….poof…we looked around and everyone was saying….let’s cut government because it costs too much and we spend too much. There is no money, they said, to fund government. No one is working and so there are no tax revenues. Let’s cut government, they said. It is the ONLY way, they said, to keep our government from going bankrupt…by basically cutting it to the size of Rhode Island.
But that is not true. In fact, it is a lie. It is a damnable Republican lie. Because we know, as the Republicans know even better…because their lives are spent following money…that the money that went out of your 401K, went out of the equity in your home, went out of shuttered corporations and pensions….that money went somewhere. Money doesn’t vanish. Money flows.
For example, when you buy a pair of shoes, money flows from you to the store, from the store to the manufacturer, from the manufacturer to the suppliers of leather and to the workers who made the shoes and then to the owners of the business who keep what is left over. The shoe store owner buys more leather, the leather producer buys more hides. The workers buy food, and buy shoes and other consumer items.
When you bought a mortgage, the money involved was transferred to a mortgage company or a bank. That mortgage was in turn bought by someone else, another banker or an investment company, and then it was sold again…money constantly moving…in the form of that mortgage security…that piece of paper that carried a value with it of $100,000 or $300,000 or $500,000….to other investors.
So the money that you paid to the mortgage company moved from there to an investment company and to another and another. At the end, when people stopped buying mortgages, the last person to get cash for that mortgage kept the money and the subsequent person who now held the mortgage held a virtually worthless piece of paper. So the money remained in the hands of the people who got paid cash for it last. That isn’t you. They took your money, your equity, then sold it and re-sold it…each person along the line making out like a bandit.
Wall Street would like you to think that they have very little money when, in fact, most of them are people who sold those piece of paper before they became worthless and made huge amounts of U.S. dollars which they put in their pockets or in their bank accounts. If a man sold your mortgage to someone else, he didn’t get paid in debt. He got paid in cash. Money doesn’t stop. It flows and flows.
Now it has stopped. That’s what a Depression or a Recession is. The money stops flowing. It is not that there is no money. It is that the people who ended up with all that cash want to hold onto it. And that is what is happening now.
The money has stopped. But it has not disappeared. It did not evaporate. The money is on Wall Street. The last person paid for those worthless pieces of paper has the money. That would not be you or your neighbors or any of us who live in the mainstream of America. Think of it. Someone sold your mortgage to someone. The person who bought it has the mortgage, but the person who sold it has the cash. So the cash isn’t gone. It is somewhere.
The money, your money, now resides in the pockets and the bank accounts of people on Wall Street. Your money is in the hands of those who hawk stocks and bonds, like the worthless pieces of paper that resulted from investments in ENRON or Global Crossing or other companies, or people similar to the one who went merely one step too far…Bernie Madoff. There are other Bernie Madoffs We just do not know which of the millions of investors are being fooled by the latest Bernie Madoff.
Did Wall Street people lose money? Some did. But who is “Wall Street?” It is a lot of people. It is very wealthy men like Pete Peterson of the Blackstone Group and it is wealthy groups, that is groups with a lot of money, like pension funds and government employee funds.
It is also you. In some cases, someone on Wall Street bought these worthless pieces of paper for the pension funds and the 401K funds for all kinds of people. You were the last one with the worthless paper and you got it. That portion of your 401K that took a hit was the final buyer. But the person who sold it to your fund manager got the cash. Someone always wins and in this case, someone loses.
So someone has your money. And it was not the pension funds, it was not the people who suddenly had less value in equity in their homes. It was not the rich traders on Wall Street. They bought the paper when people thought it had value. They made lots of money. They put that money away, and then like good gamblers they continued to gamble with money they could afford to lose…because it was your money.
Once they had all the money, they stopped the merry-go-round, the musical chairs. Everyone sat down and everything stayed as it was. But the rich, who always get the message first, got out. They sold. Which means that they have the cash and you have the worthless paper. And you have your home, which, because this was speculation on home mortgages, was the thing being traded and therefore the thing that lost the most value.
In other words the Wall Streeters took your cash and they took the equity in your home, which had been almost as good as cash.
Now it is time to fight back. It is time to tax the rich.
It is time to stop worrying about the people who took your money. These Wall Streeters came and stole the value of your home, your securities and even your income. So why should you worry about them. It is time to balance the budget of the country. It is time to keep fixing health care until everyone can afford it. It is time to put Americans back to work. It is time to create the alternative energy solutions that are just out there, ready to go, but slightly beyond our fingertips.
We can do it all by taxing people who will, in some cases, never feel it at all. If you had an income of over one million dollars per year, and there are more of those people than you can imagine, would you be concerned about another ten percent in taxes? You would still keep $670,000 a year or about $56,000 a month, down from about $65,000 a month. In a time when the Neocons want to take away Social Security and Medicare and Medicaid….do you think that you would notice $10,000 if it would help balance the budget?
But how many people are we talking about? Well, in 1978, there were 450,000 millionaires and 1 billionaire listed with Forbes and Fortune. (So it may have been more in all of these figures, but it was not less.)
When Ronald Reagan came in there were 635, 000 millionaires by 1982–plus–38,885 decamillionaires (worth more than ten million, 400 centamillionaires (worth 100 million and 13 billionaires. Not bad. Some improvement. But by the time Reagan left office, six years later, there were 1,500,000 millionaires, 100,000 decamiliionaires, 1,200 centamillioniares and 51 billionaires.
That is great. This is a great country. The problem is that the reason many of those people became so rich is that they simply weren’t paying the kinds of taxes they had been paying before, if any at all in some cases. But you weren’t getting any raises.
There was no increase at all in the minimum wage. People began for the first time to lose ground against the cost of living and in addition, Reagan and Tip O’Neill made an arrangement whereby you would keep your Social Security but you had to pay more for it every month and you had to wait until age 66 to get it. So, not only did they create over 2000% more millionaires in the Reagan era, they cut your retirement benefits.
The average millionaire, the average million dollars of income, during the Bush tax cuts of 2003, having already been cut once, would now generate an additional disposable income for the tax payer of $120,000 per year. They received that for 6 years and they will receive it for another two years. So they have made, $960,000 more than they would have under the Clinton tax rates. That is just one person.
The amount that the country now wants to cut from government is the exact amount that taxes were cut under Bush. Under Bush, we spent $7 trillion more than we took in. (The Bush Recession has cost us another plus-or-minus $3 trillion.) So where were all these same Republicans…Lugar, Hatch, Grassley, Sessions, Roberts, Vitter, DeMint, Snowe, Gregg, Blount, Corker, Cornyn, Craig, and all the others, plus Boehner and all the House Republicans when it came time to cut spending between 2001 and 2008?
Nowhere. And where were they when it comes to repaying the American people for their sacrifice, while allowing the children of the rich to go without serving at all in the military. The Republicans were great at creating wars and spending taxpayers money. Now it is time to get some of that money back from the rich.
It is time to make the top marginal rate 55% on those earning over $5 million a year. We need to scale down from there to 45% on those making over one million and everyone who makes an income whether it be one million or one dollar will pay at least ten percent to help fund this country. You can have a mortgage interest discount on your home, up to $5 million but only on one home.
You pay tax on all income if you are a corporation, on any income you earn over and above your operating costs and if your deductions take you lower than ten percent, you still pay a minimum of ten percent tax, no matter what. So if you make ten billion profits, even if you owe no taxes under the rules for deductions, you will still pay ten percent of ten billion, or one billion dollars in taxes.
Needless to say, this will begin to balance the budget immediately. Over ten years we will reduce this deficit back to what it was when Clinton was in office. That’s what we need to do to solve our fiscal problems. No cuts. No austerity programs. Just tax the rich. And as the Republicans always used to say under Bush, “If you don’t like it, move to another country.”
