No one seems to be writing opinion pieces quite the way I would, so I decided to do it myself.

The name? Taverns are places where one goes to discuss the interesting events and things in the world, so this is my tavern.

I will offer my views on politics, economics, and whatever else strikes my fancy.
I will occasionally publish the entire article from another journal for purposes of causing discussion.

 

Greenspan and the Republicans have been working twenty years to pick your pockets and kill Social Security

The following is a transcript of an interview between Lou Dobbs and David Cay Johnson about the shill game Alan Greenspan is using to increase taxes on the middle class, lower benefits provided to the middle class, and exempt the upper class from taxation as well as control.

The New York Times's David Cay Johnson gets it. And I mean really gets it:

DAVID CAY JOHNSTON, AUTHOR, "PERFECTLY LEGAL": Well, in 1983 Alan Greenspan persuaded the Democrats who were in charge of Congress to overtax us on Social Security, that is to collect taxes in advance rather than on pay as you go system. The promise was that we would use the excess taxes to pay off the federal debt which was then about a trillion dollars. We have now paid 1.8 trillion dollars in excess Social Security taxes. This year the government will collect -- if you make $50,000, about $7,500 from you. It only needs 5,000 to pay current benefits. That other $2,500 wasn't used to pay off the federal debt, which is now 7 trillion dollars, instead it is being used to finance tax cuts for the super rich.

LOU DOBBS: We're putting up a graph right now which goes to the -- to that issue. Precisely what you're talking about. Now, why in the world would FICA be limited at $87,000 of earnings, taxing -- taxation on $87,000? Why not carry that straightforwardly through for everyone at higher levels?

JOHNSTON: Well, it's limited to the 90 percent of wages in the country. And the theory is that that's as high a benefit as the government is going to pay. So your benefit caps out, that's why the tax stops. If we simply had a pay as you go tax and it stopped at that end, Lou, I don't think there would be an issue. Since we were told you have to pay in advance. Of course a tax paid in advance costs you a lot more than when you can defer off into the future. That you are going to pay in advance for the benefits.
And now that money has not been spent to pay off the debt. Now Mr. Greenspan says you are not going to get those benefits but we should not raise taxes on those that make millions of dollars a year. It seems to me what Senator Daniel Patrick Moynihan predicted in 1983 has come true. He said this was thievery and the middle class were going to have their pockets picked by the rich.

DOBBS: Indeed, with that analysis that is what is happening. And the middle class at this point, hardworking men and women in this country are no longer being surprised by some of the pressures, forces that are working against them. What is your best judgment for a solution?

JOHNSTON: Well, in the case of Social Security, if we were to go back to pay as you go, people making $50,000 a year would have $48 a week more in their pocket, particularly if we took it all out of the side paid by the worker. So we cut that in half, and the max instead being dollar for dollar by your employer, it would be two dollars to one dollar. People earning $50,000 would have $48 a week more in their pocket. They could choose whether to save that money or whether to spend that money. But it would be their money and their choice.

DOBBS: I'm sorry, go ahead.

JOHNSTON: It would also mean, however, that the federal government would either be spending vastly more than it is taking in, a couple hundred billion dollars a year. We would either have to deal with that or raise taxes on people who have higher incomes.
DOBBS: Let's put the graph up. We have a graphic of this from your book that we want to show you maxing Social Security taxes per person doing exactly what David suggested. This is a remarkable -- to look at the income growth from 1970 to 2000, for the bottom, if you will, 99 percent of this country versus the top ... one percent, is staggering. I follow these trends rather carefully but I had no idea of the discrepancy there. (editor's note: ROFLOL)

JOHNSTON: If you chart, Lou, the increase in income for the bottom 99 percent of Americans over that 30-year period, for each dollar that each person got in increased income -- and the average was $2,700, less than a hundred dollars a year -- you made it one inch high. For the top one-one-hundredth of 1 percent, or 27,000 people, it is 625 feet high. 625 feet to one inch.
DOBBS: And the solution is there, the fact that Alan Greenspan, the Fed chairman would raise the issue, I think, is commendable. The suggestion in my opinion that the first solution should be sought is to cut the benefits of future retirees is reprehensible. What is your reaction?

JOHNSTON: Well, we can choose in America, if you want, to have a system in which the middle class and the upper middle class, people making $30,000 to $500,000 a year subsidize people who make millions of dollars. And if Americans want to vote for that they should do it.

I just don't think, Lou, that Americans would have gone for this if they had known what is happening. And since it was Mr. Greenspan who said pay your tax in advance and now he says, no, we're not going to give you the benefits, but we can't raise taxes on the rich. That seems to me morally troubling.

The above is from The Whisky Bar


David Cay Johnson is the author of “Perfectly Legal: The Covert Campaign to Rig Our Tax System to Benefit the Super Rich -- And Cheat Everybody Else”

Johnsons book

From the Publisher
One of the country's top investigative reporters reveals how the richest 1 percent of the country has rigged the tax code and other laws in its favor.

Since the mid-1970s, there has been a dramatic shift in America's socioeconomic system, one that has gone virtually unnoticed by the general public. Tax policies and their enforcement have become a disaster, and thanks to discreet lobbying by a segment of the top 1 percent, Washington is reluctant or unable to fix them. The corporate income tax, the estate tax, and the gift tax have been largely ignored by the media. But the cumulative results are remarkable: today someone who earns a yearly salary of $60,000 pays a larger percentage of his income in taxes than the four hundred richest Americans.

Pulitzer Prize-winning investigative reporter David Cay Johnston exposes exactly how the middle class is being squeezed to create a widening wealth gap that threatens the stability of the country. By relating the compelling tales of real people across all areas of society, he reveals the truth behind:
* "middle class" tax cuts and exactly whom they benefit
* how workers are being cheated out of their retirement plans while disgraced CEOs walk away with millions
* how some corporations avoid paying any federal income tax
* how a law meant to prevent cheating by the top 2 percent of Americans no longer affects most of them, but has morphed into a stealth tax on single mothers making just $28,000
* why the working poor are seven times more likely to be audited by the IRS than everyone else
* how the IRS became so weak that even when it was handed complete banking records detailing massive cheating by 1,600 people, it prosecuted only 4 percent of them

Johnston has been breaking pieces of this story on the front page of The New York Times for seven years. With Perfectly Legal, he puts the whole shocking narrative together in a way that will stir up media attention and make readers angry about the state of our country.
Author Biography: David Cay Johnston won a Pulitzer Prize and shared in another for his investigative reporting in The New York Times, for which he has written since 1995. Prior to that he wrote for the Philadelphia Inquirer, the Los Angeles Times, the Detroit Free Press, and the San Jose Mercury News. Johnston is a frequent guest on NPR's Fresh Air.
From The Critics
The New York Times
As Johnston knows, the real scandal of our federal tax system isn't so much what the rich didn't pay. It's what the rest of us now have to -- particularly the middle and upper middle classes, with incomes from $50,000 to $500,000. This is the group Bush is squeezing, to benefit what Johnston aptly calls the ''political donor class.'' This truly shocking story emerges later on in Perfectly Legal. — James K. Galbraith

Publisher's Weekly
Since he began writing about taxes for the New York Times in 1995, Johnston's investigative reporting has earned two Pulitzers. The journalistic legwork informs every page of this expos of the ways in which, he says, America's taxation system is stacked in favor of the wealthy. Johnston evades the imposing abstractness of the tax code by keeping the story focused on individuals, from working-class parents facing audits to Internal Revenue Service officials desperate for the resources to revamp their procedures. Chapters addressing the inability of the IRS to go after the worst tax cheats, thanks in part to opposition from grandstanding members of Congress, are particularly effective in putting a spotlight on the problem, but there's plenty of space given to revealing how canny tax attorneys come up with legal (and barely legal) ways to get around the system. And for those who can afford it, he reports, there's always a new dodge available once the law has caught up to the latest tricks. At some points, dealing with numbers becomes unavoidable, but even here Johnston displays a knack for breaking the story down into easily grasped components. Though the tax cuts engineered by Presidents Reagan and George W. Bush receive most of the criticism, Democrats come in for their fair share of opprobrium. Genuine reform, he suggests, will require serious and sustained attention from the public, not just reflexive griping. His book is a thoughtful overview for any citizens willing to educate themselves on the issue. (Jan.) Copyright 2003 Reed Business Information.


posted by Richard at 2:48 PM