Take Back Our Country

Are you angry?  Are you mad at the system? Well, if you aren't, you should be.  The middle class and working poor are over taxed while the rich get substantial tax benefits and the top 1% has had their tax rate reduced by 56%.  There are six federal income tax brackets up to $336,550 but none above that amount.  That effectively means that someone making $350,000 annually is paying taxes at the same tax rate as billionaire tycoons "earning" 350 million dollars.  Doesn't seem fair to me. Does it to you?  Furthermore, even though the very wealthy argue that they pay the bulk of the income taxes, if they have their tax rate reduced and the federal government needs to collect the same amount or more in tax then 99% of the taxpayers below them must make up the difference.  Did you know that once you earn $94,200 your income above that amount is no longer subject to Social Security?  Maybe if the cap was eliminated there wouldn't be the projected future crisis in funding Social Security.

My name is Greg Lee.  I am a long time resident of Iowa and work in the public sector.  The following proposals, I believe, will benefit the vast majority of our citizens and at the same time they might encourage Americans to look beyond our personal, day to day concerns and develop the means to help those struggling to survive in the poorest countries of the world.

The proposals given below are in part inspired by two books, Collapse: How Societies Choose to Fail or Succeed and The End of Poverty: Economic Possibilities for Our Time, respectively written by Jared Diamond and Jeffrey Sachs.

1. Exempt the first $50,000-$60,000 of household income from federal income and withholding tax.
2. Impose a 5% income tax surcharge on the top one percent of all households in the United States and encourage all other industrialized countries to follow our example.  The money collected would then be distributed to the poorest countries to ameliorate their persistent economic, social and health related problems.
3. Remove the cap on wages subject to Social Security taxes.  The cap is now set at $94,200.

Many federal programs have been created that assist the poor and middle class.  I think they would be happier and would benefit more from keeping the money that is taken from them, in the form of federal income taxes, that is used to support those programs.  We should all pay, in some way, for the services that are rendered to us by the various branches of government but I contend that they already pay too much.  In addition to federal income taxes, most people also pay FICA and Medicare taxes, state income taxes, motor vehicle fuel taxes, excise taxes, personal property taxes, local sales, use or income taxes and real estate taxes.  Politicians are always proposing different means or methods to help the poor and middle class.  It usually involves changing the Federal Tax Code to provide a credit or adjustment on their tax returns.  Frankly, these folks would prefer keeping their money that would have otherwise gone to federal withholding or income taxes and use that money to pay for their immediate needs.  It doesn't seem to make any sense to impose withholding or income taxes on people who are struggling to pay for their basic needs.

Something that is rarely mentioned in the media is that prior to 1964 the tax rate on the top 1% of all households was 91%.  The top rate is now 35%.  It might be interesting to research how this came about but I think the result has been that it only served to concentrate the wealth of the nation in fewer and fewer hands.  Over 36% of the nation's wealth is in the hands of the top one percent.  It is certainly not any more evenly distributed at any of the lower income levels.  Warren Buffett and many other people of extraordinary wealth know that it is dangerous to our republic, our representative democracy, to promote further concentration of wealth and has opined that it is wrong that his secretary and himself are effectively taxed at the same tax rate!  It is wrong that someone making $350,000 (the bottom of the top income tax bracket), is taxed at the same rate as someone reporting $350,000,000 on their tax return.  Many people can't conceive of that kind of income because it is far beyond their comprehension.  For example, it would take 940,000 years for someone earning $60,000 annually to amass the 56 billion dollars that Bill Gates is reported to be worth. (That's about four times longer than our species has been on the planet).  Some will say that my foregoing statements incite class warfare.  I say, so what!  As someone much cleverer than I once remarked, "What class warfare?" "The rich have already won."

The Republicans have exploited our various divisions (as ably explained by Thomas Frank in his book, What's the Matter with Kansas?), and used them against ourselves so that we don't look to our own self interest, our economic well being.  We have inadvertently and invariably helped the rich grow richer by electing people to office whose only platform is to reduce the taxes of the very wealthy.  Middle class taxpayers may receive some tax relief but never to the degree that the rich or super rich do.  Though the top 20% of all households pays 82% of all federal income taxes they could easily absorb the other 18%.  The total income of the top one percent is beyond all comprehension.  The tax exposure of the top 1 percent has been reduced by 56%.  Who has to pay the additional amount of income tax now due, from which they were able to unburden themselves?  Everybody else below them.  Is that fair?  Let us put the burden back on the people who can most afford it.

I read where, in our area, that a home selling for $100,000 is referred to as a starter home.  Then someone earning under $100,000 a year must only have a starter income!  Half of all households in the United States are earning less than $60,000.  Exempt the first $50,000 to $60,000 of household income from federal income and withholding tax.  There are six federal income tax brackets up to $336,550.  If there was at least another bracket below $336,550 and as many brackets above $336,550 as there are below, the federal government could generate enough tax revenue to exempt from federal income tax the first $60,000 of  household income.  Poor working class and middle class families now would have extra money to finally save for their current or future needs; the higher education of their children; training expenses related to changes in their circumstances; health insurance, if not provided by their employer or if they were self-employed and for their own retirement.  Most families have no or insufficient savings.  This would give them the opportunity to save for the things they need rather than depending on credit cards and going further into debt or depending on government assistance.  If the presidential candidates are serious about the working poor and the middle class they can put more money into their pockets by exempting the first $60,000 they earn from both withholding and income taxes.  There are also benefits related to tax administration and collection because the government will now have half as many returns to process and collection efforts can be focused more profitably on high income earners.  Businesses may experience less paperwork because they have fewer employees on which they must withhold income tax, provide W2's and end of the year tax reports.  I also believe that if the total federal income tax burden was squarely placed on the shoulders of the rich and super rich they would be more unwilling to support our current administration in its ill-advised millitary ventures.

My next proposal is based on one presented by Jeffrey Sachs in his book, The End of Poverty: Economic Possibilities for Our Time.  He proposed that the top 1% of all the taxpayers in wealthy industrialized countries dedicate a 5% income tax surcharge, imposed on their earnings, to the poorest nations of the world.  Two billion people, for example, are each earning less than $2 per day.  The money that we would give to those countries would fund programs that could end or control widespread diseases, provide fresh drinking water, promote agricultural self-sufficiency, build schools, roads and clinics and fund many other causes that would improve the lot of millions, possibly billions, of people.  If the U.S. commits itself to this proposal, the other wealthy nations of the world would more readily follow our example.  Many people are concerned about the number of immigrants who are moving from some of the poorest countries of the world to the richest.  Some are concerned about the friction and ill-will that this often generates between the immigrants and the residents of the countries to which they have moved.  Many of those immigrants leave their homes because the world's resources are not evenly divided. 

Jared Diamond suggested that the scarcity or misuse of resources led to the collapse of many civilizations.  He referred to the Earth as a lifeboat.  There is no place that we can flee to if we foul our planet.  Countries that become desperate for resources often lead their people into conflictt with other people or nations.  Immigrants often times flee from desperate circumstances and go to places where they feel that their families can prosper.  However, if all of those desperate people converge on those relatively few wealthy countries, the "lifeboat" will be overwhelmed and all civilization will collapse.  If the poor can find no way to support themselves in their home countries they are going to immigrate to the more wealthy, industrialized nations.  Wouldn't it be better for everyone concerned and the development of the poorest countries if their citizens could remain in their homelands?  The poor can only stay in their countries if their circumstances are improved.  Mr. Sachs concluded that we have the means to help the poorest of the poor out of ppoverty.  He says that we can do this and it can be done if we have the will to do so and commit ourselves to the promises that we have made.  I hope that you agree that this is a truly worthy cause and one which I hope our country adopts.

We are looking at a situation in the not too distant future when the Social Security fund may be paying out more than it is bringing in.  Why not curtail that problem now by removing the cap on income subject to Social Security?  Currently it is set at $94,200.  If there is no cap on income subject to Medicare then there shoudln't be one on Social Security.  People should have other sources of income available to them once they retire but Social Security gives people some sort of safety net if the other means fail.  Removing the cap goes a long way to insuring that there will be a safety net for everyone when they retire.

What should be done now?  I want you to take action if you feel as I do that it is wrong to tax people who are just getting by.  Social Security benefits are not taxable if the recipent's total income is under a certain dollar threshold, nor are food stamps and other welfare benefits.  The point I am making is that the government feels that it makes no sense to tax the benefits of people who are destitute.  The middle class may not be destitute but many are just getting by.  They live from one paycheck to the next and have little or no savings and are getting by with credit cards.  A few financial setbacks and they may be looking at bankruptcy.  Why tax people who are living like that?  The money taken in taxes could have been used to put their collective financial houses in order and make us a nation of savers rather than borrowers.  It makes no sense to me to collect taxes from poor and working class people for governmental programs, that might help them, when the money taken from them in taxes might have been used to help themselves with less or no governmental assistance.  It is time to take the government back from the rich.

Let's be honest.  Our government was created by rich men.  None of the signatories to the Declaration of Independence were poor.  John Hancock, for example, was a millionaire who made his millions by smuggling illegal goods.  Goods that the Crown wanted to control so he worked to end their interference by setting up a government that would foster his interests and thereby enrich himself immensely.  The rich created the government.

The laws they created kept them in power and made them wealthy.  That was true then as it remains to be true to this day.  Take a look at current federal legislation.  Most of it is to foster the interests of the wealthy; either to favor their businesses or exempt them from tax.  Legislators spend most of their time getting reelected to office.  Elections are expensive.  They look to rich patrons and businesses to keep them in office.  It is time that we, the middle class, free the government from the rich man's grasp.  They have had their way too long, since the time they created this government that has been used to enrich them and kept them in power.  We need to be more concerned about our own economic self-interests and not be so concerned about how it might affect rich men.  They don't seem to mind abusing and taking advantage of us.  Now is the time to contact your Congressman and the presidential candidates and see where they stand on these issues.  It is time to stand up for ourselves and make the government truly our own, which it has never, really, been.

Sincerely,

Gregory A. Lee