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Tax System Remains Punitive

Friday February 16th, 2018   •   Posted by K. Lloyd Billingsley at 9:28am PST   •  

As we noted, the Republicans’ tax bill lowers the corporate rate from 35 to 21 percent and according to the New York Times it will cut taxes for about 75 percent of filers in 2018. That is good news for taxpayers, who would do well to consider realities that have not changed, such as the essentially punitive nature of the system.

The more work a person performs, and the more she achieves, the more she will be taxed for her efforts and success. For the ruling class this is “progressive,” and accurate only in the sense that the rates progress to higher levels. True to form, the new tax system retains, count ‘em, seven tax brackets, so it’s not any kind of a flat tax. Neither was the “flatter” tax Missouri Democrat Richard Gephardt proposed back in the nineties, which featured five brackets with rates from 10 to 36 percent. Gephardt thought a true flat tax, a single rate for all, was unfair.

Ruling-class bagmen assume that any taxpayer’s success has been due to some sort of exploitation or malfeasance, and that government is better equipped to redistribute the proceeds of workers’ labor. Actually, it isn’t, and as this writer has often noted, the government gets workers’ money before they do in the form of withholding. That exploitive practice dates from World War II and was supposed to be temporary. It remains as perhaps the most effective enabler of government greed, and the Republicans’ tax bill did nothing to change it. Neither did it change the rates of taxation in the states.

California governor Jerry Brown once described himself as a “born-again tax cutter.” In the 1992 presidential primary, Brown proposed a flat tax of 13 percent for all Americans. That went nowhere and California now deploys a top marginal income tax rate of 13.3 percent, highest of the 50 states, and a base sales tax rate of 7.5 percent.

The tax system will be “fair” when all Americans pay the same tax rate. When that happens, and when workers are the first to get their own earnings, true tax reform could be at hand.

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February 2018