by David Bruce
Ever-embroiled in debate, members of Congress are now in dispute over how to avoid financial default. Most of us who live in the United States and work for a living to support ourselves and our families have some idea how to balance our budget and how to avoid financial distress. Our elected representatives, however, show little sign of fiscal competence or moral demeanor, as they publicly and shamelessly deliberate on the best approach for avoiding a situation that will largely affect the elderly and disabled citizens of our country. Additionally, should our government default, we more-than-likely would endure increased interest rates, and government employees would suffer delays in pay. Regardless of income-level, individual taxpayers would be adversely affected. Conversely, our government and largest corporations would continue operating in such a way that they would benefit to some degree, regardless of the political or economic fallout.
Should our government default, a worst-case scenario illustrates that government employees (including service members) and social security recipients would sacrifice timely receipt of their paychecks. Major corporations would make attempts to recoup any losses by raising interest rates on credit cards, mortgages, and other loans. Would these large businesses be deprived of anything? Indeed, the ledgers may initially reflect a less-than-profitable quarter: nothing that a government bailout wouldn’t resolve. The American public does not merit a bailout, though, even with an election on the horizon. The major corporations are the darlings of both Democratic and Republican parties.
A list of ten companies was recently compiled that illustrates the overbearing tax burden suffered by large businesses in America. Of course, the buzz about the earnings and refunds for General Electric has made headlines across the Internet. Also worth mentioning, however, is the recent tax refund of $1.9 billion that Bank of America received in addition to their $4.4 billion in profit. This is also a company that profited from the aforementioned bailout. In 2008 Goldman Sachs paid income taxes measuring 1.1 percent of its income. In 2010 Citigroup paid no federal income tax, yet they generated in excess of $4 billion dollars of income (let us not overlook the bailout monies). In 2009 Exxon Mobile paid no income taxes against profits of $19 billion. Additional evidence is easy to access.
The families surviving on wages that are considered to be poverty-level and not paying federal income tax are not the criminals. The well-to-do families who have benefited from hard work, raising their standard of living significantly are not the criminals. Yet these two demographics are pitted against one another, tools in the political mêlée waged by each and every one of our elected representatives. Individual American taxpayers in the lowest 20% tax bracket and individual American taxpayers in the highest 20% tax bracket are positioned as bitter rivals in this Congressional conflict. The poorest Americans pay little or no federal taxes, and the wealthiest Americans pay the largest percentage. While the former would most likely switch places with the latter without argument or hesitation, and while the latter certainly has a valid argument against further tax increases against money that have rightfully earned, the fact remains that the real criminals are on Wall Street and Capital Hill.
An article in the Tucson Citizen pointed out that in 2010 individual income tax accounted for 42% of total revenue, while corporate income tax accounted for a mere 9% of total revenue. From outward appearances, this is what and who our representatives are fighting for. In a Christian Science Monitor article, calculations demonstrate that tax breaks are worth about $1,000 to a typical family earning about $21,000 or less, augmenting their after-tax income by 9 percent. Middle income families earning between $40,000 and $70,000 receive an average of about $4,000, increasing their after-tax incomes by about 8 percent. For those in the top 1 percent, tax breaks allow those wage-earners to increase their after-tax incomes by more than 20 percent. According to this research, the highest-income 20 percent enjoy almost two-thirds of the benefits of tax expenditures. More than one-quarter of tax breaks are allotted to the top 1 percent alone.
The issue is not whether or not taxes should be raised or for whom taxes should be raised. The issue is the major loopholes that exist permitting major companies to bring their tax liability to a percentage lower than that of the average working American. The issue is our elected representatives who represent the interests of these companies and their own self-interests. These issues will not resolve themselves. The majority of our representatives do not care about us as people. They do not care how we live, if we live, or how we die. They want our vote. They have taken virtually everything else from us; do not give them a vote they have not earned.
Your enemy is not your neighbor.