The U.S. tax code is truly a disaster. It lets billionaire Warren Buffet pay a lower rate of taxes than his secretary. It gives corporations tax breaks for giving their shipping jobs overseas and giving CEO's huge bonuses. Between 2007 and 2010, U.S. corporations claimed $66 billion in tax deductions because they gave bonuses to their CEOs and top executives.
No wonder the gap between rich and poor is getting so great in the United States. Of the developed countries, only Chile is more unequal. Mexico, Estonia, Brazil, Slovenia and Greece are just some of the countries where people are more equal than they are in the United States.
Congressional Democrats have some good ideas to change the tax code to reward workers instead of people who are already wealthy.
Here's one: The CEO Paycheck Fairness Act. It says corporations cannot continue to take unlimited tax deductions for their CEO and executive bonuses unless they're giving their workers raises for increasing productivity -- and to keep up with the cost of living.
The legislation would let corporations deduct up to $1 million for executive salaries -- but not if they cut workers pay or lay people off. It's very simple. No raises for workers, no tax breaks for corporate bonuses.
As U.S. Rep. Chris Van Hollen, a House Democrat, said earlier this week,
If the tax code can be used to provide preferences for corporate jets and for racehorses, surely we can use the tax code to incentivize corporations to give their employees pay raises or invest in apprenticeship programs that result in better skills and bigger paychecks.It's such a good idea that Congressional Republicans are blocking it already. House Speaker John Boehner's flack tweeted:
The last thing we need is a new trillion-dollar tax hike added to the current broken tax code.What he's referring to is the Robin Hood tax that the Democrats would use to pay for workers' tax breaks. The Robin Hood tax would not affect workers themselves. It would affect high-rollers on Wall Street.
The Robin Hood tax is a teensy little tax on Wall Street's speculative financial transactions. It would raise
Our brothers and sisters at National Nurses United are solidly behind the Robin Hood tax. So are Nobel Prize-winning economists, former US Vice Presidents, founders of Microsoft, Ronald Reagan’s Budget Director, the UN’s Secretary General and the Archbishop of Capetown.
Here's how they explain it:
This small tax of less than ½ of 1% on Wall Street transactions can generate hundreds of billions of dollars each year in the US alone.
Enough to protect American schools, housing, local governments and hospitals. Enough to pay for lifesaving AIDS medicines. Enough to support people and communities around the world – and deal with the climate challenges we're facing.
It won't affect ordinary Americans, their personal savings, or every day consumer activity, such as ATMs or debit cards. It's easy to enforce and tough to evade.
This is a tax on Wall Street, which created the greatest economic crisis in our nation, and globally, since the Great Depression. The same people who have returned to record profits and bonuses while ordinary Americans, the 99%, continue to pay the price of their crisis.There's another advantage to the Robin Hood tax: It will discourage high-speed trading, which contributes to the instability of the financial system.
Sounds like a plan. A good one.