Friday, January 6, 2017

What's America Worth To You?

Can You Spare A Quarter For Your Country?
By Nick Paleologos
January 6, 2017

I grew up in Woburn Massachusetts. My grandfather settled there from Greece in the early 1900’s. He labored in one of those tanneries the city became famous for. So proud is my hometown of the prosperity those factories produced, that our sports teams are still called the Tanners.

It was mostly immigrants who actually did tannery work in Woburn because stripping animal hides and transferring them by hand - one at a time - into a series of increasingly toxic open baths was the best job Greeks and Italians could get. Every working day of his adult life, my mother’s father left his modest home on Conn Street - lunch pale in hand - walked a few blocks; donned a “protective” apron, rubber gloves; and inhaled poisonous chromium-sulfate fumes from dawn till dusk.  

And not once did he ever complain about paying taxes to his adopted country.

Donald Trump on the other hand is a billionaire. As a reminder, a billion is one thousand million dollars. Which is an awful lot of money. Donald Trump loves billionaires. His cabinet is lousy with them. You know what they all have in common – besides not having to sweat the price of gas?

They can’t stop complaining about the taxes they pay to their country.

These are some of the richest guys on the planet and all they can do is whine incessantly about how rough it is to make a buck in America. About how much it costs to live here. About how paying a living wage for an honest day’s work will put them out of business. About what an unreasonable burden it is for them to make products that don’t kill people. About how no self-respecting entrepreneur can get rich in a country with such an oppressive personal tax rate of 39% for billionaires and 35% for corporations.

That’s not even the worst of it. Not one of these chronic cry babies or any of their crony capital companies have ever paid anything close to those tax rates. Consequently you would think they’d have the common decency of my immigrant grandfather and shut up about it already. But they just can’t help themselves.

In 2010, at the height of the Great Recession, General Electric Corporation reported worldwide profits of over $14 billion - five billion of which they earned right here in America. But GE didn’t pay $1.75 billion (35%) in taxes in 2010. They paid ZERO taxes - actually less than zero because they got a $3.2 billion rebate. In fact, between 2008 and 2013 - during a soul-crushing economic crisis for the rest of America - GE made $34 billion in US profits while their effective tax rate was negative nine percent. That’s right, the country gave them money.

But let’s not dump on GE exclusively. Bank of America, Boeing, Verizon, Citigoup, Pfizer, FedEx, Honeywell, Merck and Corning all made billions of dollars in profits during the Great Recession and all paid zero taxes to their country. Most folks with a decent upbringing would say thank-you, but not these bums. Bank of America, after snagging a whopping $1.3 trillion bailout from their country, showed their gratitude by paying zero taxes and eliminating 8,000 jobs. Real nice guys.

The other ingrates spent money they didn’t pay to their country to buy off sleazy politicians instead. You know the ones I’m talking about. That sorry collection of ventriloquist dummies who’ve been peddling the party lie that our country is way too tough on billionaires and way too generous to everybody else.

Pity poor Mitt Romney, who earned $14 million in 2011 but never paid his 39% ($5.46 million) in taxes – not even close. Mitt paid a grand total 14%, and then spent the entire 2012 presidential campaign decrying the unbearable tax burden on millionaires like himself.

I mean really, you don’t have to be a Rhodes Scholar to know when you are being hosed. During the height of the punishing Great Recession (2007 to 2013) corporate profits increased across the board by 21% while their tax bills dropped by 5%.

Even Warren Buffett was so embarrassed by the gross inequity of billionaires like himself paying lower tax rates than their secretaries, that he penned a New York Times op-ed piece which can be summed up in one sentence: STOP KISSING MY ASS!

But now comes Donald Trump to shove his own peculiar brand of patriotism down the throats of the 74 million Americans who voted against him. In Trump World our country is simply not worth paying for. The people who pay taxes to America are just plain stupid. The President-Elect had so little regard for his country that he reportedly paid zero taxes -- not for a single year, but for nearly two decades.  “That makes me smart,” he said.

Actually, that makes him a jerk. That, plus the fact that he tapped a half dozen Goldman-Sachs alums for his administration even though Goldman-Sachs was fined $5 billion just last year for lying to their investors during the financial crisis.

But I digress.

How much is your country worth to you? Or, put another way, how much are you willing to pay for the stuff you want in the country you say you love?

I graduated from Woburn High School in 1971. We had some pretty good math teachers in the days before trashing public schools became all the rage. So I thought I’d put some of my twentieth century arithmetic to work on this problem.

In 2015, total personal income in America was $15.45 trillion. And that’s with the average person’s wages being essentially flat for the last thirty years. US Corporate profits that same year were $6.44 trillion. That totals $21.89 trillion and includes everybody – Main Street, Wall Street, and everyone in between. So if we all kicked in a quarter for every dollar of earnings and profits in 2015, our country would have had revenue of $5.47 trillion. The entire federal budget in 2015 was $3.8 trillion.

Put another way, if we cut the corporate tax rate from 35% to 25% and cut the top personal income tax rate from 39% to 25% - and everybody actually paid their 25 cents on the dollar - we could afford everything the country currently does for its citizens, and still have a $1.67 trillion surplus left over -- every year. 

But wait, you say. It's not fair for Joe Six Pack to pay the same tax rate as Richie Rich -- because the basic cost of living (food, rent/mortgage, gas, utilities, etc.) takes a much bigger bite out of Joe than Richie. And you are right. So here's how we fix that. The first $75,000 of everybody's income should be federal tax free. That shouldn't be a big problem since the top 20% in America already pay 87% of individual federal income taxes. By the way, that ought to tell you something, since few if any of them are even paying 25% right now (let alone 39%).

So you see if we all paid a quarter on every dollar we earned (over $75,000 per year): there would be no need for any deductions at all; we'd have a massive annual budget surplus immediately; our country would be debt free in just over a decade; Social Security would be solvent for all time; Medicare could be extended to every citizen from birth; and we'd still be spending more on our military than the next ten largest countries combined

But in order for that to happen, we would need a president who's a patriot and not a putz. We'd also need politicians who believe in a country that can keep us safe and secure, guarantee our healthcare and education, and treat us fairly so that every citizen can have the opportunity to be the most that they can be.

My immigrant grandfather was happy to pay for that country. Are you?