Tuesday, October 18, 2011

Tax Responsibility

Looking back at yesterday’s blog, I believe that the graph I posted warrants a little bit more attention. What the graph displays is the difference in the percentage of tax to the upper-most and bottom-most brackets of our tax system over the last century, and as you can see, we have had a raucous relationship with the taxation of the rich, while at the same time, have found the taxation of the poor to be relatively consistent. The importance of this differentiation becomes readily apparent when you explore the deep canyons of the red “rich” line, and realize what events happen to fall within them. Namely, the Great Depression and then later, the Reagan/Bush tax cuts (and consequent 2008 Depression). For your convenience, I’ve now plotted both depressions on the graph:

Now, it would be silly and inaccurate to put the blame completely on the taxation patterns of the rich for our economic recessions, but the graph illustrates an undeniable trend. After periods of deregulation and “free market” expansion, in which the rich see their personal investments increase and responsibility to the greater good decrease, we have been left, as a nation, in dire straits. In response to the Great Depression (which barely made a dent in the pocketbooks of those supremely rich) Franklin Delano Roosevelt enacted the New Deal and increased the tax responsibility of the rich to bring the rest of our country back from the brink of extinction. That is what we need now.

“Tax responsibilty” would be a good phrase to use in the Occupation protests. Because that is what we are talking about when we talk about increasing tax rates. It’s not about wanting to tax the rich just because we don’t think they deserve the money—it’s about making them accountable to the country they live in. What the upper eschelons of society do now is take, take and take. We work for almost free, well under a living wage, for companies that have stifled our unions, cancelled our health care and cut back our benefits. We have come full circle to the days of Andrew Mellon and Henry Clay Frick, where workers are a mere commodity, easily replaced if they dissent.

And all the while, our masters have gotten richer and stronger, pulling more and more money out of the government whose strings they somehow still inexplicably pull. They put money into trusts, reinvest into tax shelters or simply keep money overseas, avoiding taxation on their wealth. They skirt the rules and avoid their civic duties and then have the gall to call us unpatriotic in our protests. We need to demand tax responsibility for all. If you make more, your responsibility to this nation should be greater. It is, after all, the freedoms of this country that allow you to make that money in the first place. The 99% pays more than our fair share--it’s about time we demand that the 1% do the same.

Monday, October 17, 2011

How this tax thing works

It’s time for a little economics lesson.

Recently, it came to my attention that no one really understands how taxes work. Yes, we pay them to the government and they use the money to buy things, like war for example. Some people seem to forget that they also pay for things like street signs, street lights, sidewalks and streets, but that’s a topic for another entry entirely.

With the Occupy Movement starting up and people finally taking notice of how badly the economy of this country skews to the upper echelons, it is important that we understand not only where our tax dollars go, but also how they are paid in, and what creates the income disparity to begin with. This subject is extremely important to the discourse that needs to take place about the massive and continually growing gap between the super rich and everyone else, and it is often so convoluted by those who wish to devolve honest debate into the screaming of buzzwords.

The most important thing about the assessment and collection of taxes are tax brackets. You’ve probably heard of them before, and if you’re currently reading this, it is likely that you exist in the first one. Where you fall in the series of five tax brackets is based on your gross income (less deductions and such), and are divided as such:

Now, most of you probably already know this, especially if you file your own taxes. And you know that it is based on this bracket system that your income tax rate is determined. You’ve no doubt heard a lot about income tax rates in the recent months, and what you know is that with each increasing bracket, the tax rates increase as well, from the first bracket’s rate of 15% to the last one’s at 39.6%. What you’ve also no doubt heard is that this is unfair. Even if the rich do make more money, why shouldn’t we all be taxed at the same rate? How is it fair that they pay over double what the lowest bracket pays on their income? All that this tax scheme is doing is taking more money the harder you work.

It’s not, they don’t, and we do.

What is so often glossed over is how the tax brackets operate. If you make $100,000 a year (falling into the middle of Bracket 3), you don’t get taxed 31% rate on your entire income--the bracket only applies to the money that is taxed in that bracket. Namely, $10,850, or the difference between your $100,000 income and the cut-off point of Bracket 2. The same goes for Bracket 1. No matter how much money you make, the first $37k of your income is only taxed at 15%, then the next couple tens of thousands at 28%, and so on and so forth. It’s a graduated tax system, which means we all get taxed the same amount on the money that we similarly make. The head of BNY Mellon and I pay the same amount of tax on our comparable income, and it is only once he skips upward in the scale that he pays more. And as you climb into the upper reaches of the bracket system, the numbers become neglible.

No, really, look at how the margins shrink as they increase. Between the first two, we see a nine point increase, then as we climb into the realm of upper management and junior executives, the increases shrink to four points each. The final jump, to the world of the top-level execs making a quarter million and infinitely upward, isn’t even a full four points. What the fuck?

The reason most of us are unaware of this issue is that we never get out of that first bracket. Ours, therefore, is a flat tax. No matter how hard you work, unless you’re getting a boatload of overtime, you’re paying in 15% for the rest of your blue-collar life. Unless you are consistently bumping up into Bracket 2, you’ll likely never even consider how the system operates, and you’ll surely never explore the piddling rate at which the upper brackets are taxed and how ridiculously unfair that is. It wasn’t always that way, either. With every new conservative regime that has taken control of our country, the upper rates have shrank and shrank. In the mid-80s, when my good friend Curtis Faith had an income reaching into the top-most bracket, taxes there were around 50%. Before that, they were much higher, as evidenced by the following graph:

As you can see, the rates throughout the “best years” of our country were gargantuanly higher. Not only have those rates shrunk significantly with the increasingly conservative, isolationist approaches government has taken toward our economy, but when the Reagan and Bush tax cuts went into effect three decades ago, we found the lowest tax brackets actually raised and the disparity of wealth increased as the gap in taxation shrank to an all-time low. Now, as economists try to argue for rolling-back the upper-end George W. Bush tax cuts and allow the top bracket to rise to a slightly more reasonable rate, conservatives argue tooth and nail against it, even as the evidence against the economic effectiveness of willy-nilly tax slashing piles up against them.

The reason we need to understand these things is to truly understand what we are fighting for. The Occupy Movement has a great thing going for them, and it is just beginning, but we need to be clear in our message so as to not be spun by those who wish for us to fail. We don’t want to tax people more, we want to tax them progressively. We want to tax them fairly. This discussion about income tax has not even taken into consideration the topic of capital gains taxes—the very bane of the rich and conservative set, which they have repeatedly tried to excise to further benefit themselves. But that, again, is a topic for another post.

To those Occupying, again this is my call: Be strong and be clear. Educate yourself and use that knowledge as a weapon. Be able to answer the questions that will be asked of you, and answer them with passion and with respect. This is how we win this war. We are not an angry mob; we are angry, but we come with purpose. Not to smash windows but to talk. To explain. To feel. And that is all we ask: for someone to listen, to understand and to feel for us as well.

Sunday, October 16, 2011

Think globally, protest locally

Yesterday began two brand-new legs of the Occupy movement: one in London and one here at home in Pittsburgh. The movement, which began on Wall Street mere weeks ago, has grown exponentially and is finally coming to represent a well-rounded anger that we're feeling, worldwide, at those who make all of the decisions for us, who tell us that we are nothing with their actions though they still pay lip service to our hopes and dreams. Unlike the way Fox News and USA Today have attempted to represent it, the Occupations are not anarchist rally, it's not a hyper-leftist movement--it is by nature a progressive stand, yes, but it has nothing to do with partisan politics. It is about class warfare, and there are plenty of Republicans, Democrats, Greens, Libertarians and Socialists alike down here in the muck to fight.

It took a while for Occupy Pittsburgh to find its legs, but now there are tens of tents set up, housing around a hundred people on the park in front of the BNY Mellon headquarters in downtown Pittsburgh. It also just happens to be located directly behind the hotel where I work. I was concerned about our local chapter of the revolution--that it may be met with apathy or that it would become a long, drawn-out discussion and never physically manifest itself. But the time that it took to get rolling was used brilliantly as an incubation period, and instead of a few more protesters trickling in every day, the march through the city ended with quite a sizable population now respectfully taking up residence on one of the largest American banking institution's front lawn.

The camp is also situated right on the corner of Grant Street and Sixth Avenue, one of the most significant thoroughfares in downtown, so a constant flow of cars is being funneled by the protestors holding signs, banners strung from poles and draped over tents. I was excited to see the Occupiers outside this morning, and I hope to be able to spend some time in the park with them: perhaps around noon or six when the general assemblies are being held. But as thrilled as I was, I worried about the response of the rest of the city. Walking out after work, I passed right by the protest on my way to the bus stop, chatting for a moment with a gentleman on the corner and offering my sincerest support. To my surprise, as I waited for the bus, cars upon cars that were fed from the highway down Grant Street were honking their horns in support. It was an almost-constant blare of horns, issuing from trucks and cars and even a large city maintenance vehicle.

I realized that Pittsburgh is perhaps one of the most interesting cities for this kind of a protest to take place. In New York (and particularly on Wall Street) that richest 1% is really much higher--maybe even 5% or 10%, when you consider the vast amounts of money that move through those particular veins of the Big Apple. Here in Pittsburgh, on the other hand, that 1% is probably more like a .5% or less. This city is built on, and vehemently proud of, its blue-collar ethics and traditions. Here, too, the income gap is much smaller than in New York or in Boston. There just aren't as many multi-millionaires per square acre. So the breeding ground for support is much broader. Provided the media pays fair attention to the protest and what it is about, not spinning it into some kind of anarchist nonsense as has been the case in the past few weeks of OWS, this is exactly the kind of sentiment that can take hold in Pittsburgh. And that warms my heart to an unreal degree.

In a single day of Occupation, before any media has really been by to explore, there is already respect and warmth to this protest. It is honest and it is true. It is simple. It is something we can all understand and something we all can feel. You are, as this revolution will soon show, either for us or against us; not in a pugnacious way, but in the truth of what this whole thing is about. Those people on the lawn, no matter whether you love them, join them, laugh at them or sound off against them, are fighting for your rights. It is selfless and it is true, and we should be so lucky to have people like them sitting in for our rights to be acknowledged.

For more information on the Occupy Movement here and abroad or to find out how you can help in the revolution, please visit occupypittsburgh.org and occupywallst.org, or just go down to Mellon Green, on the corner of Grant and Sixth in the shadow of the BNY Mellon Center and visit with the protesters there.

Thursday, October 13, 2011

Occupation dedication

I have not yet been deeply involved in the Occupy Wall Street movement (or locally, the Occupy Pittsburgh one--the irony being that my shitty job keeps me too busy to do so), but I have been keeping an eye on developments with it. It has warmed my heart to see it grow, and even though it may not be perfect, it stands for something important: that the vast majority of us are getting fucked.

Now, with the most recent Republican debate, the GOP candidates for 2012 have decided that they can see the advantages of steering this anger, much like they did with the Tea Party in 2010, and in less than a week, almost all of the polling candidates have changed their tune, coming to now “understand” the frustrations of the OWS protestors. But have they come out in support of the people on the street? Have they, too, denounced the record profits made and massive bonuses doled out during the worst financial crisis since the Great Depression? Of course not. They’ve got the gall to suggest that protestors should be occupying Pennsylvania Avenue, not Wall Street. “They have basically targeted the wrong target,” said Herman Cain. “It should be against the failed policies of this administration, not Wall Street, is where they should be protesting.”

We live in a twisted world where demanding changes in the businesses that suck the blood of our working nation dry is viewed as “unpatriotic”, but the systematic destruction of our very government itself is something every red-blooded American should be chomping at the bit to do. At the heart of it, OWS really is a partisan movement. It is clearly geared toward the left, just as the Tea Party was geared toward the right. I don’t want to believe that, hoping rather that we can all be outraged at the current coddling big business receives from our increasingly more economically conservative system here in the United States--but I know it isn’t true.

However, we now begin to see OWS painted in a different light, and it is my sincerest hope that the protestors themselves remember those roots as the GOP tries to find a foothold to work their own angle. “I think the people who are protesting on Wall Street break into two groups,” Newt Gingrich said at the last debate. “One is left-wing agitators who would be happy to show up next week on any other topic, and the other is sincere middle-class people who, frankly, are very close to the Tea Party people and actually care.”

I see what you did there.

Occupy protestors the world over: Do not be misled. Your target is the right one. It will be attractive to let into the fold all of those who share your sentiments, your frustrations. But be careful, because some will come as wolves in sheeps clothing. You are the left’s retaliation against the astroturfed uprising of the neo-conservative right, and for that you should be proud. The media has said your message is unclear, but it is simply because the message really is so broad, so simple. Do not allow that to be compromised, to have your anger steered in the wrong direction. You have the roiling frustration of a nation behind you and it is growing with every day, so captain it well and maybe the change we have been so long waiting for can finally be made.

Wednesday, October 12, 2011

You'll never be rich

Part of me is impressed that pizza mogul Herman Cain has gotten as far into this Republican primary three-ring circus as he has, and then the rest of me remembers that he's neck-and-neck with a Mormon robot and a woman who makes Sarah Palin look like a rational human being, and I go back to being completely appalled that we don't want people who should run our country running our country--we want ourselves to run our country. Because what's important to the presidency is relatability! Law degrees or experience in public policy? Sounds like some liberal elite faggot shit! What kinda beer does he like??

But Cain really blew my mind after this past debate session, when he explained that the Occupy Wall Street protestors and all of the people who back them, who have ended up tens of thousands of dollars in debt from college with no jobs or prospects to pay it all back, should "blame themselves" for being under- or outright unemployed. It is our own fault, he explained, that we are not rich. Anyone can be rich if they want to be. We're all just shiftless and lazy.

There is a lot wrong with what he said, and most of it is obvious. And better than I can explain that, Bill Maher can in his recent interview with Rachel Maddow, so why not let him?

However, the issue I have with Cain's interpretation of the overeducated and underemployed goes much further, because it is the feeling of many people here in America--not that people like me are necessarily lazy, but that everyonecan be rich someday. Not only is that impossible and silly, and just would not fuel any modern economy by any stretch of imagination--it is also a detrimental approach to our lives.

We live in a society that doesn't realize (and won't let itself realize) just how poor we are. Ask most people and they'll tell you that they're a part of the "middle class." They likely aren't, unless they're at least in some minor management position. Do they work in a factory? A hotel? A restaurant? They're grunts like you and me. But we're convinced we're just one great idea away from being millionaires. It's the American Dream: you work really hard and then you get everything you've ever wanted! We are not poor, we're just "pre-rich" and waiting for our big break. It comes out in how we vote on policy; no hard-working steel mill worker actually has any love for his union-busting company head, but he still votes against his own interests in a progressive tax system because someday he, too, will make $250k a year.

He won't. Most of us never will, even with college degrees. Especially with college degrees, at this point, with the market flooded and debt up to our eyeballs. And the sooner we all realize that, the better off we'll be. You are not a special little snowflake that is so wonderful and so talented and so full of promise. You are a grunt, just like me. At my current job, I make roughly $23k a year. That means it will take me ELEVEN YEARS to make that $250k we're all so sure we're gonna get, by golly. I'll have to work FORTY-FOUR years to make a measly million, and most of that will go into rent, loans, and if I'm ever stupid enough, a car and a house someday. Hopefully someday (soon) I'll find a better job that pays more, but there will still be people working at the hotel where I'm currently employed, working for the same or less than me, right up until the day they die because they can't even afford to retire. Don't believe me? Come on by and I'll introduce you to them.

They'll never be rich, and you won't be either. Not like the people you're protecting. So let go. Be proud of the work you do and understand your place in this life. It can improve the lives of many other people like you, whether you want to admit they're like you or not. We're the 99% after all. That's the majority of us.