Declare The Pennies On Your Eyes

This fine letter in this morning’s Philadelphia Inquirer from Ben Burrows of Elkins Park got me to thinking (the letter appears below):

Arguably, the 1950s saw the greatest growth in the middle class in United States history. At that time, the highest incomes were taxed at 90 percent; federal and state estate taxes were nearly universal. By contrast, with today's flatter tax rates, executive salaries have accelerated out of control, while family income has been relatively stagnant. Why would you run away from a tax structure which gave us the greatest middle class growth and fostered the greatest team spirit among all the classes of American society?

I’ll admit that this is kind of a “water wet, sky blue” post, but I’ll try to provide some value with it.

This describes the report from the Congressional Budget Office in August 2004 confirming what we already learned long ago; namely, that the tax burden in this country has shifted dramatically under Bushco onto the middle class (it should have made a difference in the election, but I don’t recall exactly what happened – I don’t know if John Kerry and his people even knew about this or had anything to say), and this describes how the GOP spinmeisters usually play this stuff along the lines of “well, the rich are still paying more than their fair share” while not acknowledging the fact that a small percentage of an increase for people with higher incomes will take much less of a bite from earnings than it will if the same percentage increase is applied to someone who earns less (got that?).

However, instead of just harping about this, I want to mention this article written by John Irons, the director of tax and budget policy for the Center of American Progress, and John Podesta, the chief of staff for the Clinton Administration from 1998 to 2001 and the center’s director. Among the many good ideas in the article are requiring employers to pay taxes on payroll incomes over $90,000 (with payroll taxes identified as the most regressive part of our tax system), and addressing the so-called Alternative Minimum Tax, which is a “ticking time bomb” of sorts because more and more wage earners will be affected since the tax is not indexed for inflation.

I am hardly an expert on the tax code or the type of financial issues they discuss in the article, but fortunately Irons and Podesta are, so I highly encourage you to take a few minutes and read what they have to say.