Adam Smith (1723-1790), a man upon whose writings and
philosophy America was built, said: "The subjects of every state ought to
contribute towards the support of the government, as nearly as possible, in
proportion to their respective abilities ; that is, in proportion to the
revenue which they respectively enjoy under the protection of the state."
After all, taxes pay for everything that we
Americans love and need to survive as a country: the military, teachers,
emergency personnel, interstate highways, national parks, space
exploration, and fireworks on the 4th of July.
If Adam Smith is right, corporations which enjoy the most
protection form the government should shoulder the biggest tax burden,
Then, naturally, the richest individuals should follow closely behind.
Instead, according to a Bloomberg BusinessWeek study, 100 of the 500
largest corporations paid less than 16% of their earnings to the IRS over the
latest 5 year period. Some of these companies include: Coke; Ford;
General Electric; Boeing, Southwest Airlines. In addition, in its
August 2008 report, the Government Accountability Office estimated
that "[t]he average U.S. effective tax rate on the domestic income of large
corporations with positive domestic income in 2004 was an estimated 25.2
Taxes aren't flowing in from the richest Americans
either. Under Eisenhower, the richest American paid a 90% top tax rate!
Now, according to the IRS, taxes on the wealthiest are at the lowest level
they have been since the Great Depression. Over the 12 years to 2007, tax
rates for the richest 400 Americans were effectively cut in half. In
1995, the richest 400 Americans paid, on average, 29.93% of their income in
federal taxes. In 2003, it was 23%. In 2007, the last year for
which the IRS has released data, the richest 400 Americans paid just 16.63%.
At the same time, the total income of the richest
400 Americans skyrocketed. In 1995, the combined income of the richest
400 was just over $6 billion. By 2007, the combined income of the richest 400
was almost $23 billion.
Regrettably, it appears that many in the country
have embraced the ideals of J.P. Morgan (1837-1913): "Anybody has a right to
evade taxes if he can get away with it. No citizen has a moral obligation to
assist in maintaining the government. If Congress insists on making stupid
mistakes and passing foolish tax laws, millionaires should not
be condemned if they take advantage of them."
The only difference now with J.P. Morgan's time is that
the Americans and American corporations living by his idea are not
millionaires, they are billionaires.
articles about consumer debt by Ted Connolly, co-author of The Road Out of Debt
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