Unless someone in power seeks retribution or wants to make an example of you – with an occasional sacrificial lamb to placate the masses – the United States has absolutely created two distinct legal/economic systems of governance: one for the mega-mega-rich and another for the rest of us. It started during the Reagan era, when well-heeled lobbyists for the mega-rich suggested a plausible, but since proven false, economic theory. The misplaced belief maintained that if you did not tax the super-rich, that excess money would “trickle down” to the rest of us. More rightwing sophisticated economists referred to it as “supply side economics,” conservative lawmakers referred to it as “incentivizing the job creators,” and many would simply call it “fiscal responsibility” to rein in government spending. But the rising tide did not float all boats, only yachts. Trickle down economics has never worked to benefit anyone but the rich!
That notion has since become the most fundamental platform, immutable, of the Republican Party. Without using the dictionary definition of the word “socialism” (predicated on ubiquitous government ownership of land, business and all significant economic values), Republicans mislabeled programs aimed at helping most of us – like universal healthcare (we are the only develop nation without that) and support for higher education (the real job creator) – as “creeping socialism.” Unamerican, they called it.
Back in the 1950s, major corporate CEOs were compensated somewhere between 30 to 50 times the pay level of their average employees. By 2023, that multiple is north of 350. Take a look at the strikes we have faced of late: writers, actors, autoworkers, etc. The common thread in these labor disputes is the disproportionate pay increases to senior management versus the long-term practice in settling labor disputes by just correcting for inflation. No real raises.
At the heart of this core issue, more alive in the United States than any other nation on earth, is the blank check accorded to mega-rich in pursuing their agenda of wealth maximization and tax/ regulation minimization. Nothing screams legitimized corruption like the Supreme Court’s 2010 Citizens United vs FEC – a ruling that uncapped issue and candidate campaign contributions (not directly controlled by candidates)… a practice that is illegal in most of the rest of the world. The obvious corruption of sitting US Supreme Court justices, receiving millions of dollars in benefits to themselves and their families, from clear rightwing supporters with an even clearer rightwing agenda that benefits their coffers and their values, should be an embarrassment to those judges. It does not appear to phase them in the least.
One of those powers, one that submits lists of preapproved judicial candidates with rightwing views, is also at the heart of the Clarence Thomas scandal. The Federalist Society’s Leonard Leo, the generous Thomas benefactor, is also a leader of just such an organization. Trump’s appointees were all on that Federalist list.
Major American industries, notably tobacco and fossil fuel-related monoliths, have lied, covered up their own research proving toxicity and found resonance in candidates on both sides of the aisle with their hands outstretched for campaign contributions. Millions of Americans have died or been relegated to lives of suffering by reason of those lies, and the politicians paid to look the other way. Tobacco was somewhat tamed by litigation brought late in the game, and BIG OIL and GAS are just now beginning to see some litigation that seeks accountability.
Meanwhile, reflected in the minority ultra-rightwing bloc in our House of Representatives attempting to impose their tiny minority will on the majority of Americans and in Congress, we have a massive federal deficit of approximately $33 trillion, a number that rises even though we are not at war. Why? Are we too poor to pay our annualized governmental carrying costs? Do we have to borrow just to live? But we are the richest nation on earth, so that cannot be the case. When you realize that the deficit is a national debt, amortized across the economic power of every single resident of the United States, but if we were to generate the necessary offsetting taxes to prevent that from happening, the burden would be applied primarily, in a progressive tax system, to those earning the most.
So, we keep taxes for the mega-wealthy low and foist the burden generated by maintaining those low rates… on everybody. The mega-wealthy maintain phalanxes of extremely well-educated tax lawyers and accountants, supported by the most extensive and effective team of lobbyists on earth, to keep the taxman from auditing them or assessing them proportionate to their net worths. Except on death or sale, we do not tax wealth in this country. One of the most fascinating deep dives into IRS records, not easily obtained, came from access to IRS records assembled by ProPublica. In an April 25, 2022, interview of one of those “deep divers” – Jess Eisinger, who with ProPublica's Jake Bernstein won a Pulitzer Prize in 2011 for their reporting on questionable practices on Wall Street – revealed the secret tax realities of the mega-rich in these excerpts:
What you do is you buy or you build your asset like Amazon or Berkshire Hathaway or Tesla, and then you borrow against the asset. And there's no evidence that Bezos or Buffett has done this. But Musk discloses this in his SEC filings that he does this. And Larry Ellison, another mega billionaire, also has borrowed billions and billions of dollars. So this is a common technique. You buy, borrow, and then you can keep those debts as long as nothing catastrophic happens to your stock or your asset. You keep those debts rolling and rolling and rolling until you die.
And then when you die, there are a couple of tax loopholes that come into play that allow you to wipe out those capital gains for the purposes of taxes. And then you never have to pay taxes on the gains at all… Well, often, what they do is they borrow against their wealth. And if you're borrowing against your wealth, that's not taxed. So ultimately, what we found was that the ultrawealthy in this country, they had wealth growth of $400 billion from 2014 to 2018, and they paid about $14 billion in taxes. And so average people pay roughly 15% in federal income taxes effectively, and the ultrawealthy paid 3.4% when compared to their wealth growth…
So for the billionaire class, what's really important is how much their wealth grows in a given year. The rest of us, we have income, and we need income to live. But for the billionaire class, they don't actually need income. They avoid income. If you avoid income, you avoid taxes. And so it turns out that the billionaire class pays much less in tax than average people. And what we found is that Jeff Bezos and Elon Musk and Michael Bloomberg and Carl Icahn, they literally, in recent years, paid zero in federal income tax. And what you do is you let your mountain of wealth grow over time. You let Amazon stock grow. Or if you're Warren Buffett, you let Berkshire Hathaway go up and up and up. And you never sell. And if you never sell, you don't take any income….
So real estate - commercial real estate moguls barely pay any taxes. We saw this with Donald Trump's taxes. And the owner of the Miami Dolphins is a billionaire named Stephen Ross. He developed Hudson Yards in New York, one of the biggest developments in recent years in New York City. And he's gone almost 20 years never paying any federal income tax. In fact, he tells the IRS in a given year, I've lost $400 million.
Well, is he actually losing that money? No. What's happening with commercial real estate people is that their buildings often are appreciating. They're going up in value, and they're throwing off income when the renters give them income. But they get to tell the IRS that the buildings are falling in value, they're depreciating, because over time, assets are considered to depreciate….
You are more likely to be audited if you are earning $70,000 a year than if your income is in none figures. Why? The IRS faces teams of lawyers and accountants for those big audits and frankly lacks the staff to handle it. This is why the ultra-rightwing House Freedom Caucus, which is holding up the government interim funding gap, seeks to repeal the $80 billion in funding for the IRS passed under Biden’s Inflation Reduction Act. Preserve that two-system anomaly!
I’m Peter Dekom, and Donald Trump is completely correct about two systems of justice and a rigged election configuration… one he has taken advantage of for decades.
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