Photo credit: Thomas Piketty and Emmanuel Saez/WSJ
According to Gallup, support for soaking the rich is rising. In 1998, 45% of respondents agreed the government should redistribute income by imposing heavy taxes on the wealthy. This percentage rose to 49% in 2007 and 51% last year.
Harris has found even stronger support for raising taxes on the wealthy. According to a 2008 poll, 62% of Americans believe the government should tax them more heavily. Interestingly, this percentage was higher than that in many European countries, generally thought to be more egalitarian than the U.S. …only 51% of respondents in France favored raising taxes on the wealthy.
Do you find it difficult to make ends meet? Do you go into your job 5 days a week, put in 100% effort and still leave at the end of the day feeling unsatisfied like you’ve just been ripped off or do you feel like you had just wasted the last 8 hours making money for someone else? Do you ever wonder when you get your paycheck, why you had such a big chunk of it taken away from you when you already find it difficult to afford the necessities for yourself?
Have you been told that if you want to change your financial situation, then all you have to do is work a little harder?
Are you always stressed out because you just never seem to come out on top? You’re not alone. None of these are really your problem. You shouldn’t blame yourself for your own financial shortcomings because it’s not your fault. You never had any control over these matters in the first place, so why would you go and attack yourself about it? Over half of the world’s total wealth is in the hands of 64 people, which means more than half of the world’s population has absolutely no wealth at all.
Of course, that’s not you. Those 3.5 billion are the one’s who have nothing, except maybe every curable disease known to man. You have some wealth but it is nowhere close to being what you would call “wealthy.” But this problem that you have, your own personal money issue, is actually a public epidemic. Billions of people around you are silently living in the same situation as you—precarious, desperate and insecure—me included.
Income and wealth inequality between the richest and poorest citizens on Earth is very real and each individual sovereign government has the important role of determining exactly who will stay wealthy in their country and who exactly will stay poor… Here’s what I mean: Governments tax every single individual and business. They have to evaluate how much everybody has to pay based on how much income they made in the year and how much wealth (assets and capital) they have.
You would think that the more that you have; the more you would have to contribute in taxes and vice-versa… But is this what is happening these days? Are businesses and the richest citizens actually paying their fair share? And what constitutes as fair? There is such a massive economic divide between individuals, so great in fact, that inequality such as this—this extreme—has never been witnessed ever before.
This first image is actually pretty vague, so I will only use it as a quick reference before I begin, but it’s a great picture of how repetitive this economic polarization really is over time. Inequality had reached an astronomical peak just before the Great Depression and just before the 2008 financial crisis. There are many other ups and downs which happened in the interim, which is how capitalist economies work: Booms and Busts.
4 GRAPHS TO VISUALIZE INEQUALITY
This is the average family income adjusted for inflation from 2002 and 2012.
The arrows at the bottom show the difference, by percentage, in incomes between those years.
The 90% have seen their incomes fall by 10.7% and the top 0.01% have seen their incomes skyrocket by 76%.
From this graph, the working class (middle class) families—anyone making less than $100,000/year—are the only ones who have seen their incomes drop in the last decade.
This is the percentage of taxes which either comes from individuals or corporations from 1934 to 2014.
This graph is used to represent the total amount (100%) of taxes that the government receives.
Individuals now pay substantially more taxes than corporations do and the burden of taxes has noticeably shifted to the individuals—as the tax rate has been cut for corporations.
(The noticeable spike for both lines from 1939-1944 was the New Deal tax rates that FDR introduced in order to get everyone out the Great Depression. That spike meant more money for the government to provide social benefits and public jobs to the people—which were not available before then. The drop in corporate taxes after has put severe pressure on the government to continue to provide these benefits to the people.)
The corporate tax rate in 2014 is actually lower than the pre-Great Depression rate—yet individuals seem to have exact same tax rate that they had in the 40’s.
The profits and taxes for corporations from 1947 to 2012.
The interesting parts of this graph are: the blue line representing the income for the top 1% of income earners, the gray bars representing the taxes on corporations and the green line represents the total profits of corporations.
Most corporations are run by the 1% (executives, stock holders.) This graph demonstrates that the 1% had taken advantage of its corporate tax breaks and what resulted is astronomical raises in their personal income.
Here we can see the undoing of the New Deal tax rates, which began in the 1970’s. This graph shows 1960-2004.
The top 0.1% has seen their tax rate drop from 71.4% to 34.2% during this time.
The bottom two brackets (shown as bottom 20% and fourth 20%) have actually declined too—along with everyone else—from 14.1% and 13.9% to 10.5% and 9.4% respectively.
Taxes have been going down for everybody, on average, since the 1970’s.
Fig. 1 and Fig.4 shows us that even though the poorest citizens have enjoyed a slight tax break, their incomes have also gone down by thousands of dollars per year. Why? Because real wages have not been rising faster than inflation of the dollar. In Fig. 4—the POOREST people are paying 0.9% MORE taxes than the bracket above them. How can we justify that? We can’t.
And by an extreme contrast, the rich and corporations have benefited greatly from these tax cuts. Instead of them sending money to the government, they pocket all the money as “profits.” But hey, I’m not blaming them, they’re just playing the game like everyone else… I can’t ignore the fact that the brunt of the share comes from the people and not the businesses which operate within our borders. This is a deplorable fact.
Yes, the richest people still pay the highest amount in taxes compared to everyone else—as long as they don’t write it all off as company expenses. My issue is not the amount, its the proportion. Where are the majority of the taxes is coming from? From a handful billionaires (who can easily afford higher taxes) or the hundreds of millions of poor workers (who cannot)?
Remember that only the businesses and wealthiest citizens can take advantage of HUGE tax breaks which enable them to literally get away without paying any of their taxes. I get about 17% of my measly $1000 paycheck taken away from me so that I pay my “fair share” for my country. Yet someone making something like a billion dollars a year—someone who probably has their own company—would only have to pay double the taxes that I do? 17% of a thousand or 34% of a billion?
And remember that billionaire who should be paying 34% usually gets away with paying NOTHING. Once someone has enough money to afford lawyers and overseas bank accounts, they can pull the strings enough that they literally get away with contributing nothing. Then, the company that’s making the majority of the profits for that individual billionaire has the LOWEST TAX RATE in the whole country. Is that really fair? No, it isn’t. Fair means equal opportunity. Fair means the distribution of wealth. Fair is when other people help others.
The majority of taxes is expected to come from the lower and middle-class citizens (Fig. 2 and Fig. 3.) The people who cannot feasibly afford them now or if they were raised since their wages aren’t going up. And the richest citizens are told to pay taxes, which are only a fraction of what they had after the Great Depression, but if they don’t then that’s completely fine. Can you see what I’m trying to say?
The financial situation of the majority of people is this: Less pay, more taxes. They are getting squeezed more and more. Being told to work harder, volunteer more and pay their taxes religiously. And for the richest, it’s like more this: More pay, less (or no) taxes. There’s an incentive to get rich in order not to contribute to society anymore.
And for the richest, it’s like more this: More pay, less (or no) taxes. There’s an incentive to get rich in order not to contribute to society anymore.
But that leaves millions of people (who probably work for the billionaire) to make up for what the billionaire didn’t contribute. The poor are getting poorer by paying a large portion of their small incomes into taxes and the rich are getting richer by only being taxed a proportionally small amount of their large incomes.
It’s great to see that the Canada Revenue Agency (CRA) is finally cracking down hard on high-profile, wealthy offenders who evade—which is somehow legal in some diabolic ways—their federal taxes.
Places like the British Virgin Islands, Panama and the Bahamas—among many other countries—are financial sanctuaries for business executives who want to save their precious profits from being “taken from them” in order to be redistributed among their fellow citizens through the tax system that’s in place in their home country. The Panama Papers revelation has brought a very important issue into the limelight: Who exactly is responsible for paying federal taxes, where, in such a complex globalized economy?♦♦