by David Waters
Scripps Howard News Service
February 09, 2005
Bill Gates doesn't. Oprah Winfrey doesn't. George W. Bush and Ted Kennedy don't. They pay Social Security taxes only on the first $87,000 of their annual incomes. The rest of their millions go untouched.
That's just one of countless ways our federal tax system is rigged - unfairly and immorally - to help the super-rich at the expense of the rest of us.
There is a tax crisis in America, but it's not the Social Security system. It's the entire federal tax collection system.
Mr. President, forget the "axis of evil." Save us from the evils of taxes.
Unlike Iraq, the U.S. tax code is filled with WMDs - weapons of mass deduction that help the richest among us and/or hurt the rest of us.
Take the income tax system, for example. When it began in 1913, it collected taxes on "surplus incomes," large gifts and estates. Income from capital was more heavily taxed than income from wages.
Since then, the income tax system has been tweaked, twisted and shape-shifted to give the super-rich and their super tax attorneys more and more ways to dodge and defer taxes.
Over the past decade, according to the IRS, the overall federal income tax burden increased by 18 percent. And yet for the 400 richest Americans, it declined by 16 percent, even as their incomes soared. Guess who's picking up the slack?
As Pulitzer Prize-winning journalist David Cay Johnston notes in his book, "Perfectly Legal":
"Our tax system is a good part of the reason that the incomes of the richest 1 percent, and especially the top-earning 13,400 American families, have soared, while the bottom 80 percent of Americans have seen their incomes stagnate for three decades."
He adds: "That most families now need two incomes shows how our tax system is robbing us and our children so that the already deep pockets of the few may be stuffed even more."
Bush's "tax cuts" have made a bad situation worse. But there's plenty of blame to go around.
Who raised the minimum Social Security tax on low- and middle-class wage earners 13-fold and spent much of the surplus to give tax cuts to the rich? Democrats in Congress.
Who allowed the Alternative Minimum Tax (the so-called "stealth tax") to metastasize into the fastest-growing tax on middle- and upper-middle-class families? Democrats in Congress.
Who put Amo Houghton, the richest man in Congress, in charge of IRS oversight during Bush's first term? OK, Republicans in Congress did that.
As Johnston and others have pointed out, both parties play the tax-collection shell game. The stealth tax is a perfect example. It was adopted during the Johnson administration and adjusted by Congress during the Reagan years.
"That a tax designed to catch aggressive rich tax avoiders is being applied to middle-class families to finance tax cuts for the super-rich shows how both parties in Washington have become two wings of the same party. The party of money," Johnston wrote. Now, the reigning party of money wants to "save" Social Security by killing it and creating Social Insecurity that rises and falls at the mercy of the market. The shell game continues.
Like Iraq, the Social Security "crisis" is another manufactured crisis that distracts from real problems the president and Congress can and should address. The growing number of uninsured men, women and children. The increasing inability of seniors and others to pay for prescriptions.
And a federal tax system that has been corrupted by big-money, strong-arm special interests.
Taxes should be levied according to one's ability to pay them, not one's ability to get out of paying them.
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