Since early last December online news services have begun reporting on the immoral circumstance and the economic impact of a rapidly self-enriching oligarchy, i.e., the super billionaire citizens and large, illegal income structures of international corporations and investors. Ironically, Putin and his cronies keep their hidden wealth in the US and a few other western nations – it’s safer.
Wealth can be purchased at advantageous times and allowed to grow untaxed because of tax loopholes. These invested assets are, in fact, removed from the economic flow of Growth Domestic Product (GDP) that supports the entire nation. While showing the wealthy growing even wealthier, the fungibility, or trade value is zero. In effect this wealth sits in an attic with no comparable value in the common economy. Think of a magician making a dollar coin vanish from his hand and never show up again.
One of the news sources is ProPublica, known for deep investigations where daylight doesn’t shine. To save words, mariner quotes ProPublica’s opening remarks to a piece written last year:
“Had the billions in budget reductions occurred all at once, with tens of thousands of auditors, collectors and customer service representatives streaming out of government buildings in a single day, the collapse of the IRS might have gotten more attention. But there have been no mass layoffs or dramatic announcements. Instead, it’s taken eight years to bring the agency that funds the government this low. Over time, the IRS has slowly transformed, one employee departure at a time.
“The result is a bureaucracy on life support and tens of billions in lost government revenue. ProPublica estimates a toll of at least $18 billion every year, but the true cost could easily run tens of billions of dollars higher.
The cuts are depleting the staff members who help ensure that taxpayers pay what they owe. As of last year, the IRS had 9,510 auditors. That’s down a third from 2010. The last time the IRS had fewer than 10,000 revenue agents was 1953, when the economy was a seventh of its current size.”
Another news source wrote about eight multibillionaire families who had never paid one dollar in taxes. Obviously the IRS needs to be refunded at appropriate levels and the fungibility of trillions of dollars must be returned to the economy by rewriting tax laws so that gained wealth can be taxed.
But this issue is more than numbers, profit margins and taxes. The wide, growing division between the wealthy and the average citizen has deformed the national culture. The number of poverty-stricken people is growing at an historic rate. The working class has endorsed Donald Trump as a savior. A normal lifestyle is out of reach for the twenty-year-olds who cannot afford college, marriage or housing. In times of great swings by inflation or recession, these are times when the private equity world sweeps in to gather easy, profitable pickings. Note that the US is heading for two economically disastrous situations: inflation and climate change. Will Government have the resources to keep the boat afloat for the next ten to fifteen years?
Not without a total rewrite of taxation laws and the agents needed to enforce compliance.
Make sure your representatives in every level of government hear your concern for tax reform.