As if anyone needed it, further evidence that the system is rigged heavily in favor of the rich:
Payroll taxes (deductions for Social Security, Medicare, and unemployment insurance) are mostly paid by the bottom 90 percent of earners. When they’re factored in on top of income tax, the gap between the tax rates at the very top and everyone else shrinks even more—so much that the effective tax rate for people earning more than $370,000 is nearly the same as for those earning between $43,000 and $69,000 a year.
As Martin A. Sullivan of Tax.com recently calculated, a New York janitor making slightly more than $33,000 a year pays an effective tax rate of nearly 25%. And the effective tax rate for a resident of the Park Avenue building named after Helmsley, earning an average of $1.2 million annually? A cool 14.7%.
Bear this in mind as you witness the purely fabricated debate unfolding in Washington about our spiraling national debt and the necessity to make drastic cuts in domestic spending. All the bogus statistics you hear about the wealthy being charged a higher income tax rate – while true in a very technical sense – are grossly distorted in order to portray an element of fairness which simply doesn’t exist in the U.S. tax system. The bottom line is that working and middle class Americans pay a higher tax rate than the wealthiest individuals and corporations.
This reality needs to be at the forefront of any debate about budget cuts. The MSM, of course, will never reveal this information, preferring instead to focus on the theatrical aspects of the imaginary Republican / Democrat divide. As a result, most Americans will never realize just how corrupt the system truly is, unless we help them learn. It is our responsibility – both to ourselves and to our fellow citizens – to do everything we can to make this knowledge public, and to call the greedy elites to account.
But let’s put this into even broader perspective. Ordinary Americans pay a tax rate which effectively amounts to 20-25% of gross income. The wealthiest Americans pay a tax rate which amounts to anywhere from 0 – 20% — but generally on the lower end of that spectrum, as demonstrated by multiple sources. Corporations, while technically required to pay up to 35% in taxes, pay absolutely nothing in many cases – in some cases even less, as with GE.
So ordinary Americans are saddled with a higher tax rate, but what do we get in return? Almost nothing. Our infrastructure is crumbling, are schools are in shambles. Millions of Americans lack access to adequate health care, millions more are unemployed, while millions remain under-employed. Homelessness and poverty are at unconscionably high levels for a nation as technically wealthy as ours, and hundreds of thousands more continue to lose their homes each year.
Meanwhile, corporations are recording unprecedented profits, the near-trillion dollar military budget remains untouched in order to fund our five ongoing wars, and Wall Street continues to operate with its usual reckless greed, backed with the assurance that, regardless of how irresponsible they might behave, they have been deemed “too big to fail.”
It’s a pretty twisted state of affairs, but the masses still lie in a half-awake, half-asleep dreamlike state, convinced that the MSM practices genuine journalism, that there actually is a meaningful separation between the Republicans and Democrats, and that at least one of those parties actually represents the interests of ordinary Americans. And perhaps the worst part of it all is that, by some unfathomable mutation of logic and understanding, the most ignorant and politically uninformed Americans tend to be the most vocal, the most opinionated, the most unwilling to bend. How can ever hope to make any progress when we’re surrounded by people who actually believe corporations help America, that taxing the rich is a bad thing, that offering universal health care is an unthinkable evil?
The sad truth is that things will have to become far, far worse before we can have any hope of them getting better.