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SUBSCRIBER CONTENT: Sep 7, 2012, 4:00am MDT


The wealthy should pay larger share of taxes

John Hooker, Guest Opinion

Do you dream of getting rich someday?

You probably ask yourself regularly, how much is enough? Am I being paid what I am really worth? Why aren’t I making as much as Paul Ryan? Why aren’t I living in the Parker Mansion in Madison like he is? Why don’t I have a million dollars in my IRA like Mitt Romney does?

The answers are simple: too much is never enough, and no, you’re not being paid what you’re really worth.

Paul Ryan made a lot of money ... somehow, while working for the government. Mitt Romney makes his money as the owner of a company that exports jobs, not as an employee, as most of you who read this publication are. You probably dream that you’re on your way to making big money, someday. Therefore low taxes on the rich will benefit you, too, someday.

Let me go back to ancient history. In 1989, Vance Packard wrote “The Ultra Rich; How Much Is Too Much?” This was back before the days of “Lifestyles of the Rich and Famous” on TV, Donald Trump and Bill Gates. He interviewed 30 of the richest Americans with net wealth over $330 million back then. To his surprise, he discovered that 21 of them lived on income of less than $1 million a year. Even today, are you taking home more than $1 million every year? Are you worth more than $330 million? Or even $25 million?

Let me offer an old reality: every dollar over, let’s say a million, that a CEO or any other executive takes out of a company is a dollar that’s not reinvested in the company or into salaries and wages for employees.

Every dollar in dividends that an owner takes as “unearned income” is money that is not growing the business. Especially every dollar that drops into an untaxed offshore bank account.

There are estimates of $21 to $31 trillion US dollars hidden in offshore bank accounts. Americans own about a third of that hidden hoard, money that is not available for investment in US factories, jobs or income growth.

So corporate owners like Romney and others who take their income as capital gains and dividends put the lie to “double taxation” on investments. Why not tax their income as “earned income” like the rest of us? They claim the same deductions as everyone else does. They claim they are getting “paid” by the stock they are given for the work they do.

But it isn’t exactly an Employee Stock Ownership Plan (ESOP) that most of you might participate in. This is more of an Executive Stock Ownership Plan. Funny thing is, unlike the 1950s when some executives took a cut in pay when the corporation suffered losses, today’s top executives continue to see pay increases every year, win or lose. It’s called privatizing gains, socializing losses.

Back to the question of taxes: Packard proposed a progressive income tax on incomes over $1 million a year.

Below that, one would pay middle-class income taxes. Above that, one would pay Eisenhower-era taxes. Do you need more than a million a year to live a comfortable life and send your children to a private college?

And he proposed a wealth tax on, well, wealth over $25 million. He estimated that one could generate $1 million in income every year from each $25 million in investments. Perhaps the numbers have doubled over the past 23 years. Perhaps not, really. Middle-class incomes have flatlined over the past years, while the top 1 or 2 percent have skyrocketed.

You are welcome to accuse me of waging class warfare. But you and I lost the war 30 years ago under Reagan. The top 1 percent won. And they haven’t looked back. They own Congress, the banks, the media and Wall Street.

So let’s consider the failures of government to fund our basic needs like infrastructure, the environment, education and health care. They have successfully starved the federal government of funds to pay for these essential needs, while fighting wars off-budget. The civil engineers grade us as a “D” for infrastructure. Our parents built it, but we don’t maintain it.

Now conservatives accuse liberals of busting the budget after they brought the wars online. Eisenhower warned us of the Congressional-military-industrial complex — every warplane built is a school that isn’t built. Packard warned us of the growing private oligarchy of hidden power. It’s all come true, with a vengeance.

He offered a solution.

John Hooker is an architectural, urban and rural design consultant and former mayor of the Village of Los Ranchos de Albuquerque.




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