Many conservatives believe that if you lower taxes on the wealthy, tax revenue will go up – a core belief of “Reaganomics.” Majority Report’s Sam Seder discusses “Reaganomics” with a caller.
Who is Arthur Laffer?
Wikipedia: “Arthur Betz Laffer (/ˈlæfər/;[1] born August 14, 1940) is an American economist who first gained prominence during the Reagan administration as a member of Reagan’s Economic Policy Advisory Board (1981–89). Laffer is best known for the Laffer curve, an illustration of the theory that there exists some tax rate between 0% and 100% that will result in maximum tax revenue for governments.”
What is the “marginal tax rate?”
The marginal tax rate is the tax rate above a certain dollar amount earned. For example if there is a marginal tax rate of 90% at 4 million dollars per year, that means that every dollar starting at 4 million dollars would be taxed at 90%. So, if you made 5 million dollars, only 1 million would be taxed at 90%. Everything below 4 million is taxed at a different amount.
Wikipedia: “Thus, the marginal tax rate is the tax percentage on the last dollar earned. In the United States in 2013, for example, the highest marginal tax rate was 39.6%, applying to earnings over $400,000. Earnings under $400,000 that year had a lower tax rate of 33% or less.”
You can calculate “marginal tax rates” at Money Chimp here.
A number of Republican-led states are considering tax changes that in many cases would have the effect of cutting taxes on the rich and raising them on the poor, according to the New York Times.
The Washington Monthly’s Steve Benen discusses plans in several Republican gubernatorial mansions to raise taxes… on the poor! Benen:
“Republicans are not, strictly speaking, a party obsessed with cutting taxes. The caricature is rooted in fact, but it’s incomplete – Republicans are actually a party committed to cutting taxes on the wealthy.
“This has been an underappreciated aspect of the GOP vision for several years. Indeed, it was part of Mitt Romney’s ’47 percent’ problem a few years ago – the Republican presidential hopeful complained, among other things, about the millions of families who ‘pay no income tax.’ A wide variety of GOP officeholders, candidates, and pundits have made related complaints about the poor not having “skin in the game” because their tax burdens simply aren’t significant enough.”
Of the 10 or so Republican governors who have proposed tax increases, nearly all have called for increases in consumption taxes, which hit the poor and middle class harder than the rich, according to the New York Times.
Favorite targets for the new taxes include gas, e-cigarettes, and goods and services in general. Gov. Paul R. LePage of Maine wants to start taxing movie tickets and haircuts, but is also proposing a tax break for the lowest-income families to relieve some of the pressure.
According to The New York Times, “Republican governors across the nation are proposing tax increases — and backing off pledges to cut taxes — as they strike a decidedly un-Republican pose in the face of budget shortfalls…”
But who are they raising taxes on? And what kind of taxes do they plan to raise?
In a recent Huff Post article, John W. Whitehead asks: who pays the price of the police shootings and SWAT team raids?
He states: “I’m not just talking about the price that must be paid in hard-earned dollars, whether by taxpayers or the victims, in attempting to restore what was vandalized and broken by police. It’s also the things that can’t be so easily calculated to a decimal point: the broken bones that will never quite heal right, the children’s nightmares, the broken family heirlooms, the loss of faith in a system that was supposed to serve and protect you, the grief for loved ones whose lives were cut short.”
The article then goes on to claim that Baltimore taxpayers have paid roughly $5.7 million since 2011 over lawsuits stemming from police abuses, with an additional $5.8 million going towards legal fees. That’s money that could have been spent on a state-of-the-art recreation center or renovations at more than 30 playgrounds.
“New York taxpayers have shelled out almost $1,130 per year per police officer (there are 34,500 officers in the NYPD) to address charges of misconduct. That translates to $38 million every year just to clean up after these so-called public servants. Over a 10-year-period, Oakland, Calif., taxpayers were made to cough up more than $57 million in order to settle accounts with alleged victims of police abuse,” the article states.
John W. Whitehead
Chicago taxpayers were asked to pay out nearly $33 million on one day to victims of police misconduct, and one person is supposed to receive $22.5 million – potentially the largest single amount settled on any one victim. Chicago has paid more than half a billion dollars to victims over the course of a decade. The Chicago City Council actually had to borrow $100 million just to pay off lawsuits arising over police misconduct in 2013.
The article further states: “Indeed, 99.8 percent of the monies paid in settlements and judgements in police misconduct cases never come out of the officers’ own pockets. Moreover, these officers rarely ever have to pay for their own legal defense. As law professor Joanna C. Schwartz notes, police officers are more likely to be struck by lightning than be made financially liable for their actions.”
The article references a case in which three Denver police officers beat a 16-year-old boy, stomping “on the boy’s back while using a fence for leverage, breaking his ribs and causing him to suffer kidney damage and a lacerated liver.” The cost to Denver taxpayers to settle the lawsuit was $885,000. The amount the officers contributed: 0.
A 92-year-old was mistakenly shot and killed during a SWAT raid in Atlanta. Attempting to cover their backs, the officers planted marijuana in the house and falsely claimed her home was the site of a cocaine sale. The cost to Atlanta taxpayers to settle the lawsuit: $4.9 million. The amount the officers contributed: 0.
In Albuquerque, a policeman was convicted of raping a woman in his police car, in addition to sexually assaulting four other women and girls. The cost to the Albuquerque taxpayers to settle the lawsuit: $1,000,000. The amount the officer contributed: 0.
The situation becomes clear: A police state is very expensive.
OK, Fine. 