The Republicans are talking about it, too, but the actual policies they’re proposing are (you’ll never guess) based on tax breaks for the wealthy!
In a sharp departure from party leaders’ proposals over the last few years, Rep. Chris Van Hollen (D-MD) today announced an action plan to create, in his words, “the kind of economy where the pie is growing and everyone is getting a better slice.”
Van Hollen, the senior Democrat on the House Budget Committee, plans to introduce a series of proposals to create or expand tax breaks for child care, apprenticeship programs, middle class working couples, those who save for retirement, and companies that raise worker wages, while at the same time scaling back the tax break corporations currently claim for CEO bonuses. The plan would be funded by a tax on Wall Street — a tiny fraction of a percentage levied on trades in stocks, equities and derivatives. Long demanded by progressive groups and labor unions, this tax has been introduced many times before but failed to pass even when Democrats controlled both the House and Senate.
Van Hollen defended the proposal Monday as one that would both curb “irresponsible” trading and provide a source of revenue.
“If you look at the typical trades of a typical family, they would never feel this,” Van Hollen told reporters, noting that the UK, France, Singapore and Hong Kong already have similar policies. “If I had $100,000 worth of stock and I turned over my entire portfolio in a year, it would cost $100 bucks. When people go to the ATM machine, they take out $100 bucks, and they pay three bucks. That’s three times the percentage we’re talking about.” The policy, he explained, would be named for those it would impact most: the ‘High Rollers Fee.’
While many in Congress have been celebrating — and taking credit for — recent economic reports of increased growth and declining unemployment, Van Hollen emphasized Monday that many have yet to benefit from this recovery. Average worker pay has remained stagnant and in some cases declined over the last several decades. Most recently, the jobs gained after the recession are generally lower-paying and less stable than those lost.
“It’s no wonder so many Americans feel like they’re on a treadmill or falling behind,” said Van Hollen. “Republican trickle down economic theory has crashed miserably in the real world.”
Why do the Democrats keep trying to save Capitalism?
The last Democrat who attempted to do it was FDR and he did it by passing socialist programs.
Van Hollen knows damn well that the pie is always growing. He also knows that for the last 35 years, since Reagan, 90% of that growing pie has gone into the pockets of the top 10%. That’s our problem.
What Van Holland is offering are cutesy gimmicks that don’t amount to a hill of beans for most Americans.
If the Democrats are serious about building the wages and wealth of the Middle Class then they would 1) eliminate ALL income tax deductions, 2) eliminate ALL tax subsidies for any company doing business for more then 5 years, 3) tax nobody making less then $50,000 a year one thin dime, 4) tax anyone making more than $150,000 in earned or unearned income a year at a rate of 90% and 5) tax ALL corporations at a rate of 50%. We can work out an equitable graduated tax for those making between $50,000 and $150,000.
If the Democrats weren’t Capitalists that would be their plan.
But they are. So what they’re trying to do once again is save the failing Capitalist economic system by offering all of us pipe dreams and labeling it populism.
Eliminate all income tax deductions? Like cost of goods sold? Like rent and utilities and salaries? Gimme a break.
I would definitely raise the standard deductions to $40K or $50K (even then the poor are still paying payroll taxes, which are about 15%, i.e. about the rate of Warren Buffet). And yes, get rid of the mortgage interest deduction, but do that one last, after all of the other deductions for interest expense have been disallowed.
Then get rid of all tax credits (other than the withholding tax) they are just a giveaway of goverment money, and they never achieve anything close to the benefits their supporters claim (the main benefit is to give away money to the rich).
Most of all, tax all businesses equally and all investments equally. When you give preferential treatments, it sets up all sorts of distortions in the economy, in justice and in the tax code.
Don’t just tax all corporations equally, also tax S corps, and partnerships, and LLCs etc. the same. Only let true general partnerships be treated as flow thru entities (i.e. if the investors get limited liability, that is, they are only at risk for the amount they have invested, then the entity should be taxed the same as a corporation). Same goes for corporations that own other corporations. Currently they pay little or no tax on the dividends they receive from entities they own 20% or more of. If an entity is set up to limit the liability of the parent corp or other form of investor against the business’s creditors and customers and employees and their neighbors that they negligently poison or blow up, then it should pay it’s fair share of taxes and this “corporate shield” should not be subsidized by the taxpayers. So bring on the “double taxation” as the dittoheads refer to it when they are bleating (or triple or quadruple taxation, but my guess is if you enacted something like this, all those shell corporations would disappear).
Then stop giving preferential treatment to some types of investments over others. You don’t get to deduct dividends paid to investors (unless the owners own 20% or more, in which the owners are not taxed). So why should you get to deduct interest expense. That preferential treatment is a big part of why you see so much “leverage” in the economy and why banks are so big and powerful, and dangerous to the economy. You get to shove all the risk onto someone else, while you get a fat tax deduction. Also, the borrowers not only get to take a deduction for the interest payments, but they get to treat the loans as “basis” for claiming other losses. Take away all the rules and laws that permit debt to be used in calculating basis.
Why take away only tax subsidies for newer companies? Why is the IRS in the business of determining whose research qualifies for the research credit, and whose mine training qualifies for another credit. How is one person auditing a tax return supposed to be able to enforce all of those credits on one return. Just get rid of them all together. If it is important for the government to subsidize businesses, then quit with this magical thinking that everyone, on the left and right, has that says the best way to do it is thru the tax code. And just set up an agency that makes loans or other subsidies to farms, or another to subsidize rare earth mineral miners, and set a budget and when that budget is gone, stop handing out the money indiscriminately.
And get rid of the foreign tax credit first of all. Or at the very least, only let the credits be used against taxes on income from the country where the credit was earned. I.e. don’t let a company used a credit from taxes they paid to Germany in order to shield income they have in the Bahamas, or where ever. This is how it used to be done up to around the 60’s, and now if you suggested it the CPAs would scream that is too complicated. Not that complicated, especially since you could easily destroy all of these bogus tax shelters and tax havens with simple solutions like that. But the solutions on offer always involve adding more complexity and opportunity for abuse rather than eliminating the root causes.
Maybe Van Hollen should first should make a commitment on preserving and increasing SS and Medicare. Here he is around 66.6:
http://www.occupythesec.org/house/rankings
He’s a f—— phoney!
Dear guest, you seem pretty knowledgeable so let me ask you this: who winds up paying for the tax deductions when businesses are allowed to deduct cost of goods sold, salaries, rent and utilities?
You and I both know that it’s the average tax payer right?
All items related to the cost of doing business, rent, utilities, salaries and so on, should be passed along in full to the end consumer.
You railed against corporate subsidies yet are quite content in giving companies tax deductions. Aren’t those tax deductions just another form of taxpayer subsidy?
Isn’t Walmart being subsidies by the taxpayer when they pay their employees substandard wages forcing them to go on food stamps?
I think the transaction tax pea is under the Medicare Option shell.