Our Marxist Tax Code
by Laurence M. Vance: Vote
is winding down once again, but the progressivity of the tax code
is still with us. Most Americans who had more taxes withheld from
their paychecks than they owe in taxes have already filed for their
refunds. But not only did many Americans have no tax liability,
some of them who didnt owe any taxes to begin with still received
a refund, all thanks to our Marxist tax code.
At the end
of section two of Marxs Communist Manifesto, in addition
to calling for the abolition of private property and the centralization
of the means of production in the hands of the state, he petitioned
for a heavy progressive or graduated income tax.
This is based
on the Marxist dictum (that many Americans think appears in the
Constitution): From each according to his ability, to each
according to his needs, and on Marxs mistaken notion
of the result of the inequality of wealth, as we see in his Das
Kapital: In proportion as capital accumulates, the lot
of the labourer, be his payment high or low, must grow worse
Accumulation of wealth at one pole is at the same time accumulation
of misery, agony of toil, slavery, ignorance, brutality, mental
degradation at the opposite pole.
Yet, from its
very beginning, the U.S. tax code has sought to soak the rich
with a heavy progressive or graduated income tax.
tax began with a 1 percent tax on taxable income above $3,000 followed
by a series of surcharges of up to 6 percent applied to higher incomes.
The maximum rate of 7 percent was applied to taxable income over
$500,000. In addition, there was an exemption of $3,000 for a single
person and $4,000 for a married couple.
The tax rate
in the highest tax bracket rapidly increased, up to 67 percent in
1917 and 77 percent in 1918, and then rose to 81 percent in 1940,
88 percent in 1942, and a whopping 94 percent in 1944. In 1942,
the top rate began applying to all incomes over $200,000 instead
of $5 million as it had previously. After dropping briefly, the
top rate stayed near or above 90 percent between 1950 and 1963.
Reagan, the top marginal tax rate fell from 70 down to 50 percent,
and then down to 38.5 before stopping at 28 percent. The tax brackets
were also eventually reduced to just two. This doesnt mean
that the government cut spending and balanced its budgets during
the 1980s like it should have, or that it didnt raise other
taxes like it shouldnt have, but the fact remains that the
highest tax bracket fell to under 30 percent for the first time
rates and brackets increased during the Bush Sr. and Clinton years,
the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA)
and the Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRRA)
gave us our current system of six brackets of 10, 15, 25, 28, 33,
and 35 percent. The lowest bracket was scheduled to be eliminated,
and four of the other rates were scheduled to rise, giving us five
brackets of 15, 28, 31, 26, and 39.6 percent, were it not for the
two-year extension of the Bush tax cuts enacted at the end of 2010.
the tax brackets have fallen in number and amount since their height
in the 1960s, this does not mean that the rich have
stopped paying their fair share.
the most recently released IRS
data, in tax year 2009, the top 1 percent of taxpayers (in terms
of adjusted gross income) paid 36.73 percent of all federal income
taxes. The top 5 percent of taxpayers paid 58.66 percent. The top
10 percent of taxpayers paid 70.47. The top 25 percent of taxpayers
paid 87.3 percent of the taxes, and the top 50 percent paid a whopping
There are a
number of ways in which the tax code is designed to punish the
rich; that is, punish success and reward those who do nothing
but have children.
example of a typical American family with two children. Because
of the progressive nature of the tax code, for tax year 2011, this
family could make $45,399 and still pay nothing in federal income
taxes. This is because the $11,600 standard deduction and $14,800
deduction for personal exemptions reduces this familys taxable
income to $18,999. This leaves a tax liability of $1,996, which
is reduced to zero thanks to a $1,000 per child tax credit.
not just the progressive tax brackets that punish the rich
and favor the poor. A tax credit is a dollar-for-dollar
reduction of the amount of income tax owed. It may reduce the tax
owed to zero, but if there is no taxable income to begin with, then
no credit can be taken.
tax credits are refundable; that is, you still get the credit even
if you dont have any tax liability. These refundable credits
include the adoption credit (up to $13,360 per child), the first-time
homebuyer credit (up to $4,000 or $8,000 if married filing jointly),
the additional child tax credit (up to $1,000 per child), the American
Opportunity credit (up to $1,000 per student, with 40 percent of
the credit being refundable), and the earned income credit (up to
$5,751 for three children).
tax credits can amount to a significant part of a familys
income. Consider once again a typical American family with two children.
For tax year 2011, they can make up to $16,699 and not only owe
nothing in taxes, but get a $5,112 earned income credit plus a $1,000
per child additional tax credit refunded to them. This effectively
gives them an income of $24,111.
income of $24,111 is much better than a real income of $24,111,
and for three reasons. First, the familys income is still
$16,699 when qualifying for public assistance. Second, no income
tax is due on income from refundable tax credits. And three, the
taxable wages for Social Security and Medicare are only $16,699.
the rich are targeted is through the phase-out of tax
deductions and credits. This means that the value of the credit
is reduced as income rises. And in some cases, the credit is disallowed
child tax credit is reduced by 5 percent for each $1,000, or part
of that amount, above the phase-out amount of $75,000 ($110,000
if married filing jointly).
The child and
dependent care credit is 35 percent of expenses up to a maximum
credit amount of $3,000 for one child and $6,000 for two or more
children. But this is only if you make up to $15,000. The percentage
is reduced by 1 percent (down to a minimum of 20 percent) for each
$2,000, or part of that amount, of income above $15,000.
savings contributions credit (up to $1,000 or $2,000 if married
filing jointly) cannot be claimed once adjusted gross income exceeds
$28,250 ($56,500 if married filing jointly).
If you itemize
deductions and your adjusted gross income is more than $109,000,
you cannot deduct your mortgage insurance premiums.
the rest of the article
M. Vance [send him mail]
writes from central Florida. He is the author of Christianity
and War and Other Essays Against the Warfare State, The
Revolution that Wasn't, and Rethinking
the Good War. His latest book is The
Quatercentenary of the King James Bible. Visit his
© 2012 The New American
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