Guess Who's Paying for Dinner?

By Molly Ivins, AlterNet. Posted June 11, 2005.

David Cay Johnston, the invaluable New York Times reporter who specializes in our tax system, has come up with some staggering figures on what he calls "the hyper-rich," the wealthiest one-thousandth of the population, and their taxes.

"The share of the nation's income earned by those in this uppermost category has more than doubled since 1980. ... The share of income earned by the rest of the top 10 percent rose far less, and the share earned by the bottom 90 percent fell."

"Under the Bush tax cuts, the 400 taxpayers with the highest income -- a minimum of $87 million in 2000, the last year for which the government will release such data -- now pay income, Medicare and Social Security taxes amounting to virtually the same percentage of their incomes as people making $50,000 to $75,000."

"Those earning more than $10 million a year now pay a lesser share of their income in these taxes than those making $100,000 to $200,000."

"The alternative minimum tax, created 36 years ago to make sure the very richest paid taxes, takes back a growing share of the Bush tax cuts over time from the majority of families earning $75,000 to $1 million -- thousands and even tens of thousands annually. Far fewer of the very wealthiest will be affected by this tax."

Under the Bush tax plan, by 2015, those making between $80,000 and $400,000 will be paying as much as 14 percent more of their incomes than those who are hyper-rich. (All figures are from the Times.)

Whenever I write about such matters, the brethren on the right accuse me of "fomenting class warfare" or of unseemly envy of the rich. Why should I give a fig if 338,400 families with more than $10 million are having a high old time? Because of the numbers.

According to Johnston, that group has grown by more than 400 percent since 1980, after adjusting for inflation, while the total numbers of households has grown only 27 percent. This has nothing to do with envy -- Paris Hilton strikes me more as a subject for pity, and I actually admire Bill Gates and George Soros. It is about what is happening to this society. When the rules are increasingly fixed to benefit only a few ridiculously wealthy people, that leaves guess who with a larger portion of the tax tab.

And we are talking serious money. In addition to paying the same percentage of their income as those in the $50,000 to $75,000 range, the hyper-rich are very good at finding ways -- both legal and illegal, observes Johnston -- of sheltering a lot of income even from the taxes they are supposed to pay. The Texas billionaires and Bush buddies Charles and Sam Wyly are now under investigation by the IRS, SEC and Manhattan district attorney concerning a tax-shelter plan run out of the Isle of Man, according to the Independent of Britain.

Look, Medicare is being cut, Pell grants are way down, food stamps are being cut -- every day we get news from Washington that some new measure hurting the poor or the middle class has been put in place. At the same time, the country is running up a monstrous debt that will be passed to our children.

This is ruinous folly. This is not about class envy, it is about ridiculous, unfair and harmful public policy.

The Times has also been running a series on class in America. The bad news is that social mobility in this country -- the old Horatio Alger idea that we can get rich by working hard -- is less true now than it ever was. It turns out the American dream of moving up is now more likely to occur in Britain and France, those supposedly class-riddled countries. I suggest this has happened in large part because our government now functions as a fully paid arm of the wealthy and of corporate interests. The country is becoming internally calcified.

When Republican cuts to programs for veterans, troops, education or health care come up, Rep. David Obey, D-Wisc., has regularly offered amendments to restore funding and pay for it by reducing (not eliminating) the Bush tax cuts to the hyper-rich slightly. Every time, the Republicans vote to keep the tax cuts for the millionaires and let the troops or education take the hit. What Johnston's study shows is that the hyper-rich are now taking advantage of the merely rich. So now what will the Republicans do?

Molly Ivins writes about politics, Texas and other bizarre happenings.

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