"I pay my income tax... and I starve myself to death, trying to keep my family fed. I keep my budget tight, trying to get myself ahead... a workin' man can't get nowhere today." -- Merle Haggard, "A Workin' Man Can't Get Nowhere Today," 1977.
If you're like most people, you've been slaving away over the weekend trying to get that almighty tax return ready for April 15th. And chances are, even if you weren't around then, you can relate to Haggard's lament about working and taxes from way back in the 1970s. A lot has changed -- but not for the better. Back in the 20th century, the rich paid more. Not now.
We'll make like Marketplace and look at the numbers. Let's say you, or you and your spouse together, made $90 thousand last year. Taking the standard deductions, you're going to pay about $9600 in income tax. Your neighbor up the hill in the high-dollar neighborhood made $90 thousand too. Only he didn't actually get up and go to work a single day. His $90 grand was from qualified dividends and long-term capital gains. He pays -- are you ready? -- NOTHING. Obviously income from ordinary work is taxed at a much higher rate than income from stock investments. Seems backward to me.
Your wealthy neighbor isn't the only one with a get out of jail free card when it comes to income tax. According to an analysis by USA Today, whole raft of major U.S. corporations -- household names like Verizon and Metlife -- won't pay a thin dime this year.
We keep hearing that if corporations have to pay more taxes, the economy will suffer, because they won't hire more workers. Well, if you hadn't noticed, for the last five years they've hardly been on a hiring spree. And when they do hire these days, it's mostly low-wage jobs.
Corporations like to claim they're people -- "corporate personhood," meaning the constitution gives them the same rights it grants real people. The courts agree, letting them spend megamillions to promote political candidates and lie to us all on TV.
If corporations are people, the IRS should treat them like people, and take away the tax deductions they get that real people don't. You know, those three martini lunches, entertainment at places like Augusta National Golf Club, credit for shipping jobs overseas and hiding profits in foreign countries while accepting subsidies and bailouts.
Back in Haggard's day there was another country song that said "you got the gold mine, I got the shaft." When it comes to the U.S. tax system, the corporations and the wealthy are getting the gold mine. The rest of us are definitely getting the shaft.
Listen to the two-minute radio commentary here: