Scenes From The Class Struggle In Capitol Hill

by dday

If you're on Twitter, I strongly recommend you find a right-wing mouth-breather Congressman to follow on the site and read them carefully. You'll get the talking points hours or even days before they show up on the teevee. For example, my favorite right-wing Twitterbug, Rep. Pete Hoekstra (R-MI), has offered his sage thoughts on this Tom Daschle tax story.

Daescle(sp?)/Geitner/Rangel all avoided/cheated on taxes!Daescle latest!They don't mind raising taxes because they don't pay them.

He got two of the three names wrong, including Daschle, who was Senate Majority Leader when Hoekstra chaired the Intelligence Committee (!) and therefore was in all the Gang of Eight meetings with him.

But let's get off spelling for a second. The soundbite is that Democrats don't mind raising taxes because they don't pay them. Har giggle snort glorf!! So let's pre-but this statement in case it's used by George Will or David Brooks tomorrow morning.

Because, sigh, if only failure to pay taxes or disclose income had anything to do with party and not class. And this happens through both illegal and legal means.

The average tax rate paid by the richest 400 Americans fell by a third to 17.2 percent through the first six years of the Bush administration and their average income doubled to $263.3 million, new IRS data show.

The 17.2 percent tax rate in 2006 was the lowest since the IRS began tracking the 400 largest taxpayers in 1992, although the richest 400 Americans paid more tax on an inflation-adjusted basis than any year since 2000.

The drop from 2001’s tax rate of 22.9 percent was due largely to ex-President George W. Bush’s push to cut tax rates on most capital gains to 15 percent in 2003.

And as long as we're talking about tax dodgers, let's bring in the biggest group of them bar none, corporations.

The news that more than 60 percent of U.S. corporations failed to pay any federal taxes from 1996 through 2000 when corporate profits were soaring and that corporate tax receipts had fallen to just 7.4 percent of overall federal tax revenue in 2003 – the lowest since 1983 and the second-lowest rate since 1934 – is an outrage. But it should come as no surprise to anyone who has been paying attention to national tax policy over the past few years. The General Accounting Office (GAO) report also found that an astonishing 94 percent of corporations reported tax liability of less than 5 percent of their total income during the same time period. Corporate tax dodging has gone on for far too long. But the policies of the Bush administration have exacerbated the problem by furthering the culture of tax avoidance by big corporations and creating a pervasive unfairness in our tax code.

We have a problem in this country with people not paying their taxes. And irrespective of anything else, those people are by and large rich and connected. They influence politicians in Washington to write breaks and favors into the tax code. They pass special gifts back and forth to one another. They claim that their corporate headquarters can fit into a mailbox in the Cayman Islands.

The tax code is multi-layered and complex. These tax problems happen at confirmation hearings every four years as a result. Because it's easy to evade taxes, by either legitimate oversight or outright theft, and for the wealthy that likelihood is multiplied. Don't take my word for it - take the leader of the Republican Party from 2000 to 2008:

WALLACE: How does [McCain] overcome all of that and...

BUSH: Because there's two big issues. One is, who's going to keep your taxes low? Most Americans feel overtaxed and I promise you the Democrat [sic] party is going to field a candidate who says I'm going to raise your tax.

If they're going to say, oh, we're only going to tax the rich people, but most people in America understand that the rich people hire good accountants and figure out how not to necessarily pay all the taxes and the middle class gets stuck.

We've had -- we've been through this drill before. We're only going to tax the rich and all you have to do is look at the history of that kind of language and see who gets stuck with the bill.

He said this over and over during the 2004 campaign. His team must have thought it was a mighty clever talking point. It was so much fun to see the President of the United States, with control over the IRS, helpfully explain that the rich evade taxes and there's nothing anyone can do about it.

7/14/2004 THE PRESIDENT: ...People need to be aware of this talk out of Washington, D.C. that says, oh, don't worry, we're just going to tax the rich. That's not the way it works in the tax code. The big rich dodge taxes, anyway. It's companies like this who end up paying more taxes.
8/3/2004 THE PRESIDENT: ...He said, tax the rich. You've heard that before haven't you? You know what that means. The rich dodge and you pay.
8/13/2004 THE PRESIDENT:...I'll give you one other thought. Let me just leave you with one other thought about taxing the rich. You know how that works. A lot of the rich are able to get accountants, so they don't -- they're able to dodge. You've seen it before. We're going to tax the rich, and then they figure out how not to get taxed.
8/28/2004 THE PRESIDENT: ...Every time they say, tax the rich, the rich dodge and you pay.
9/1/2004 THE PRESIDENT: ...You know what it means, tax the rich. It means the rich dodge and you get stuck with the bill.
9/3/2004 THE PRESIDENT: Yeah, we've heard that before, haven't we? First of all, you can't raise enough money by taxing the rich to support all his programs. Secondly, the rich figure out a way to dodge it, and you get stuck with the bill.
9/7/2004 THE PRESIDENT:Yes. Oh, don't worry, we'll tax the rich. Well, that's why the rich hire accountants and lawyers. They dodge, you pay...
10/11/2004 THE PRESIDENT: ...Something else about taxing the rich -- the rich hire lawyers and accountants for a reason, to dodge the tax bill and stick you with it.

This is the same guy who eliminated half of the IRS lawyers who audit the rich, and went after the middle class more often with audits and scrutiny.

Since 2000, authorities at the Internal Revenue Service have nearly tripled audits of tax returns filed by people making $25,000 to $100,000 as part of a broad change in audit strategy.

Audits of these middle-class taxpayers rose to nearly 436,000 last year, up from about 147,000 returns in 2000. For these 61 million individuals and married couples, who make up nearly half of all taxpayers, the odds of being audited rose from 1 in 377 to 1 in 140.

I'd be willing to bet that practically everyone of means in Capitol Hill has cheated on their taxes in one way or another. They're the Masters of the Universe and they see it as their due. If Republicans have gotten religion and suddenly want to end the practice, sounds good to me. We'll just put those auditors back to work and start poring over the returns of every corporation and every man and woman of wealth. We can even get rid of those loopholes and complexities that cause a lot of these problems. But don't tell me that this is an issue of party in any way. This is a class issue.