The Wall Street Journal ran an article last week about why it's a 'BAD IDEA' to tax wealthier folks at a higher rate.
A former economic forecaster for California, said that the state was overdependent on its wealthier citizens. Upon encountering a group protesting state spending cuts whose signs said "We Love Jobs!", this forecaster thinks THEY are missing the real problem. California, he says, depends upon the top 1% of 'earners' (important choice of words on his part, don't you think?) for almost half of its income tax revenue. That's the guys making more than $490,000 per year.
But do you know why this forecaster thinks that's a PROBLEM???? It's because theses unfortunate 'earners' have "especially volatile incomes." They are the state's most unstable income group, according to this financial wiz. (Such a sad story, isn't it????)
He further 'justifies' his argument by stating that New York, New Jersey, Connecticut and Illinois being the states most heavily reliant on taxes from the rich are now among those with the biggest budget holes.
The top federal tax rate—which applies to joint filers reporting $379,000 in taxable income—is still twice as high as the rate for joint filers reporting income of $69,000 or less. But alas, as they've grown, the incomes of the wealthy have become more unstable. That unconscionable growth of income, read GREED, is how we got into this economic mess in the first place. Between 2007 and 2008, the incomes of the top-earning 1% fell 16%, compared to a decline of 4% for U.S. earners as a whole. But they didn't tell us about the rise on the other side of the 'mountain.' As they've grown, the incomes of the wealthy have become more unstable. (I think I'm gonna cry!) Because today's highest salaries are usually linked to financial markets—through stock-based pay or investments—they are more prone to sudden shocks. Again, I think our problem here is obvious and this 'street' dog is barking up the wrong tree.
Many republicans advocate a flat tax in California to reduce volatility and keep high-earners from leaving the state. Instead of a steeply disproportionate income tax rate, a flatter, broader tax rate would help stabilize the most volatile of California's revenues, they say. The other camp says, and I think rightly, that the volatility problem can be solved by making sure citizens are fully employed and decently paid. Progressive tax systems are the best way to equalize the rising riches at the top and rising poverty at the bottom. Flattening the tax system only adds to income inequality.
So in short, the Wall Streeters and conservatives would prefer a different system. . . tax the poor people whose incomes (if they have incomes) are not as 'volatile' as the rich people and, VOILA!!! Problem solved.
Is it me or is something wrong with that picture??????????
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Coming April 5th - ANOTHER SHOT
by Ray Jozwiak
