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BILL MOYERS: This week on Moyers & Company…

JOSEPH E. STIGLITZ: It’s our policies and our politics that have shaped our economy, and shaped it in ways that have not served most Americans. And an important part of those policies are our tax policies.

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BILL MOYERS: Welcome. The Nobel Laureate Joseph Stiglitz says the situation in America is grave – that’s his exact word for it: grave. Inequality too great, unemployment too high, public investments too meager, corporations too greedy, and the tax code too biased toward the very rich.

Strong medicine from one of the world’s most influential thinkers – Stiglitz has been the economist most cited by his colleagues in the field. But don’t despair, he says; the barriers to solving our problems are political, not economic, and we can change what’s wrong, if enough of us insist. Our tax code, for example, wasn’t handed down from the gods on Mount Olympus; human beings devised it, and they can revise it, this time getting it right, as Stiglitz said on our broadcast last week:

JOSEPH E. STIGLITZ: We have a tax system that reflects not the interest of the middle. We have a tax system that reflects the interest of the one percent.

What I want to do is create a tax system that has incentives to create jobs. And if you tell a corporation, look it, if you don't create jobs, you're taking out of our system, you're not putting anything back, you're going to pay a high tax. But if you put back into our system by investing, then you can get your tax rate down.

They're willing to take but not to give back.

BILL MOYERS: So, argues Joseph Stiglitz, let’s change the tax code to make it fair. He shows us how in this new white paper prepared for the Roosevelt Institute here in New York: a clear, concise, and coherent plan to reform our tax system and rebuild our country. It’s his latest contribution to an extraordinary range of work that has earned Joseph Stiglitz a world-wide following that includes presidents, prime ministers, and grass-roots advocates working for justice. Joseph Stiglitz, welcome back.

JOSEPH E. STIGLITZ: Nice to be back.

BILL MOYERS: You said in a recent speech, “An economic system that only delivers for the very top is a failed economic system.” You were pronouncing judgment, America's economy has failed. Has our system failed?

JOSEPH E. STIGLITZ: Unfortunately that's what the numbers say. The median income of the American, median means half above, half below, median American today is lower than it was almost a quarter a century ago. Our economy has grown over the quarter century. Let's be clear about that.

In a particular sense, but all of that growth has gone to the top. So you look at the middle, they've stagnated. And if you look at, say, an important demographic group, males, median income of a full-time male worker today is lower than it was 40 years ago.

BILL MOYERS: 1972 I think you say--

JOSEPH E. STIGLITZ: That's right.

BILL MOYERS: --amazing.

JOSEPH E. STIGLITZ: It's amazing. And Americans have not yet grasped the reality of where we are. That our economic system has not been delivering for most Americans. And the fact that this has been true and that we have no longer a country where there's opportunity, where the life prospects of a young person are so dependent on the income and education of his parents means that our view of the way our economic system works has to change.

My view is that these are not inevitable. These are not just the result of the laws of economics. You know if it were just inevitable, just the laws of economics, you'd say, as an economist, you'd say, well, that's the way it is. You know, that's, nature didn't deal us a good hand.

But it's our policies and our politics that have shaped our economy, and shaped it in ways that have not served most Americans. And an important part of those policies are our tax policies.

BILL MOYERS: Can you fix a point where inequality becomes unconscionable?

JOSEPH E. STIGLITZ: And it's not just the level of equality; it's the form of inequality, the nature of inequality, the sources of inequality. So, the problem is that inequality of outcome typically translates into inequality of opportunity. America likes to think of itself as the land of opportunity, the American dream. The statistics show that America is among the advanced countries with the least equality of opportunity. Something that’s hard for us to accept, it's something hard for others to accept. But that's what the numbers show.

BILL MOYERS: So this is why Thomas Piketty in his book, “Capital in the Twenty-First Century,” is concerned about this enormous transfer of wealth that is about to happen from all the billionaires and multi-millionaires transferring their money to the next generation.

JOSEPH E. STIGLITZ: That's right. And a quite legitimate concern that we are creating a new plutocracy. And so what I've been trying to argue in this paper is that doesn't have to be. We can have a tax system that can help create a fairer society. Only ask the people at the top to pay their fair share. It's not asking a lot. It's just saying, you know, those in the top one percent shouldn't be paying a lower tax rate than somebody much further down the scale. Shouldn't have the opportunity to move his money offshore.

BILL MOYERS: Wouldn't they be arguing that, well, they pay a lot more taxes because they do make this money and why they shouldn't be able to keep as much as they have, are keeping after they paid their share.

JOSEPH E. STIGLITZ: Well, that's the problem. They haven't paid their share. The point is that they're getting, say, the top 1 percent gets 22.5 percent of the income. That doesn't really fully include all these unrealized capital gains. So, it really doesn't really capture the full degree of inequality. The question is because they are so wealthy, they have the ability to pay an even larger share of the taxes to our country. But instead they're using their money to avoid paying taxes. You know, these offshore tax havens are not something that we need to make our economy grow.

BILL MOYERS: You say that we could stop these tax havens overnight. How?

JOSEPH E. STIGLITZ: Well, you know, we did that, something almost, very similar after 9/11. We realized that these tax havens were also being used for funneling money to terrorists. And we started figuring out what they were doing and we put the pressure on them and that stopped almost overnight. Now I was giving a talk on one occasion to, in one of these tax havens. And I don't know why, but they sometimes invite me to give a lecture. Maybe they think that it's a penance for their sins. So I was telling them how bad it was for the global economy, especially bad for developing countries because these tax havens are also used for corruption, money laundering, narcotics, you know, all of these kinds of things.

And after my talk a couple of the bankers came up to me and said, you know, you got us wrong. We don't do money laundering. We don't do corruption, we don't do narcotics. We just do tax avoidance. And that was their business model. And it gives a mindset of what this is about. And totally unnecessary.

These offshore tax havens exist to avoid taxes and to avoid regulations and the other things that, so it's avoiding responsibility.

I want to put it in a broader context. Corporations, are corporations people, should we treat corporations, you know, the point is that what the Supreme Court decision of saying corporations have the right to contribute to campaigns as if they were people.

But the interesting thing is while we give them those rights, we haven't made them, given them those responsibilities. If when corporations do misdeeds, we typically don't hold them accountable. Look what the corporations, the banks did to our economy in 2008. Have they been held responsible? Not really.

So what we're saying is, oh they ought to have free speech, they ought to have the right to contribute unlimited amounts to distort our politics. But, by the way, once they do something wrong like create a financial, global financial crisis, we'll just give them more money. We won't make them accountable or their officers accountable for what they did.

BILL MOYERS: There was a remarkable moment in an interview that Jon Stewart did recently with Timothy Geithner about Geithner's new book. And there's a moment in which Geithner says we had to save them from their mistakes. They didn't pay for their mistakes. The country did.

JOSEPH E. STIGLITZ: Exactly. And, you know, he makes a very good point about saying they paid back all the money. Well, first of all, there was a shell game that the Federal Reserve lends the money at close to zero interest rates. They lend the money back to the government at much higher interest rates.

Look it, if the government lent me hundreds of billions of dollars at a zero interest rate, I, too, could become a wealthy person by just investing in government bonds. This doesn't take a genius, a 12-year-old could do it. And yet, they walked off with bonuses for doing that. And they used that money to help pay back the government. So this is the kind of shell game that will do any con artist proud. But when somebody brought, you know, makes an accident, somebody gets injured, what we did was analogous to we take the perpetrator, the guy who was the drunk driver to the hospital, but we leave the guy that has been hit on the street.

And then we say, oh, by the way, you don't have to pay for any damage that you've done. So even after they paid back the government the real question is who's responsible for all the damage that's been done to our economy? The people have lost their job, that lost their home? The banks haven't paid back a cent of that liability. And that's a real corporate responsibility.

BILL MOYERS: So, how did you come to bring this sense of moral responsibility to the study of economics, this notion of a social contract? Was there a defining fork in the road?

JOSEPH E. STIGLITZ: Probably was no defining fork in the road. I had the good fortune, you might say, of growing up in Gary, Indiana. An industrial town. Most people would say, that's not good fortune. But it was good fortune in that it exposed me to the real America.

My mother was a primary school teacher. Dedicated. They were very both dedicated. And, but Gary was an industrial city, marked by a lot of poverty, discrimination, episodic unemployment, business cycle going up and down. You couldn't help but feel that the market economy, capitalism, wasn't working quite the way that some of the people who say it's this wonder of wonders.

When I was an undergraduate at Amherst College I had thought I was going to be a physics major, theoretical physics. I really loved mathematics, loved trying to understand how the world worked. In my junior year I said, you know, what really motivates me is trying to understand our social problems, our economic problems, and I want to become an economist.

Then I went to MIT. And never lost that original motivation for being an economist even as I was working on some very abstract, abstruse, mathematical economics issues about the consequences of asymmetry of information.

It was all partly to try to understand why do we have so much unemployment? Why do we have discrimination? Why is the world that some economists depict, something that works like a clock, beautifully, why is that not right? Why is that so inconsistent with the world that I see? And so, that was always in the back of my mind as I was working on these more abstruse theories. And--

BILL MOYERS: So, is that the heart of what you call, or is called asymmetrical information, that contributed to your receiving the, your work in, that brought about the Noble Prize?

JOSEPH E. STIGLITZ: --that's right.

BILL MOYERS: Asymmetrical information. What is that?

JOSEPH E. STIGLITZ: It's that some people know something that other people don't know. Very simple idea. But the whole theory of perfect markets that the devotees of Adam Smith and Milton Friedman, and all these people who think that markets work perfect, totally ignored.

So, the idea was that markets where people have different information, where some people know more than others, where markets work imperfectly, are fundamentally different from this world that they had described where there was perfect information. You know, if worlds were perfect information, wouldn't be any discrimination, there wouldn't be any of this monopolies and all, you know, those kinds of perfections are not part of the world that we live in. And so what my research did is to help clarify, and with other people's research, help clarify why our economy doesn't work quite so smoothly as the advocates of free markets have claimed.

Why we had a crisis in 2008. You know, that's not the way market economies are supposed to operate. Why it is, you know, the basic law of economics is you have supply and demand. With supply, the law of supply and demand, there's not supposed to be unemployment.

You know, we have 20 million Americans who would like a full-time job and can't get one. We have an economy where, you know, in 2009, '10 we were throwing people out of houses. We had homeless people and empty homes. That's not the way a market economy is supposed to operate. There's so many aspects that are so central to our economy that seem out of sync with that theory of perfect markets.

And the evidence is so overwhelming that our markets don't work perfectly, that markets can and are an important force. But we have to shape markets. Come back to our theme of taxes, taxes are one of the ways we shape markets.

If our tax system says speculation is going to be taxed at a lower rate, you're going to get more speculation. If our tax system says if you keep your money abroad, you don't have to pay taxes, you're going to get more money abroad and you're going to get less job creation inside America. If your taxes say we want to encourage real investments in America, then you can get more investment in America. So I'm an economist who believes that incentives matter. But I also believe that you have to shape incentives and that markets on their own don't necessarily shape them the right way.

And that when we have a distorted tax system, distorted by a distorted political system that has given a huge amount of weight to the upper one percent, to the corporations, then that kind of distorted political system leads to a distorted tax system, which leads to a distorted economic system, which leads to an economy that is not performing as well for most Americans.

BILL MOYERS: There was a quiet urgency in this white paper. I also read an excerpt of your speech when you received the Daniel Moynihan Prize for social science research. And you said in that speech that this country is at another pivotal moment in history. What do you mean by that?

JOSEPH E. STIGLITZ: Well, what I was referring to at that moment was there had been two periods in our history where inequality had risen to what I thought was an unconscionable level. The Gilded Age, the end the 19th-century. And the Roaring Twenties, right before the Great Depression. In both of those instances we stepped back from the brink. We realized where we were going as a country. We said, that's not where we want to go.

And the Gilded Age was followed by the Progressive Era, anti-trust policies trying to get at the monopolies, getting at the, some of the sources of the inequality that was undermining our society. The Roaring Twenties was followed by the legislation creating social security, created labor legislation that, minimum wages, maximum hours. Lots of things that we take for granted now but are a part of the social fabric.

The question I asked was inequality has now gotten back to the level, that peak that it had back in 1928 before the Great Depression. Got back to that same level back 2008.

So, the question I posed at that point was will we, again, pull back from the brink like we did at the end of the 19th-century, like we did in the Roaring Twenties? I'm hopeful. But there's one note of caution.

And that is, have our politics changed? Have decisions like Citizens United changed the power of money so that the inequalities in income and wealth that are so great today translate into more political inequality than they did? That's an open question. And in my mind that's what this battle is about.

BILL MOYERS: Joseph Stiglitz, there's a lot more in these 27 pages than we have touched on in our time together. We have posted your paper, “Reforming Taxation to Promote Growth and Equity” on our website and urge people to download it and read it whole. Meanwhile, thank you for joining me and sharing your time and your ideas.

JOSEPH E. STIGLITZ: Thank you very much.

BILL MOYERS: At our website, BillMoyers.com, we’ll link you to more of my conversation with Joseph Stiglitz and to his white paper on tax reform. You’ll also find some startling numbers on the public goods and services that America could purchase with all that money being hidden away by corporate tax dodgers.

That’s all at BillMoyers.com. I’ll see you there, and I’ll see you here, next time.

Full Show: How Tax Reform Can Save the Middle Class

June 6, 2014

A report out this week finds that over 70 percent of Fortune 500 companies use offshore tax havens to avoid paying US taxes.

In the second part of his interview with Bill, the Nobel Prize-winning economist Joseph E. Stiglitz says that such lucrative loopholes are contributing to America’s inequality problem and persistent unemployment rate. In fact, corporate greed, combined with a tax code too biased toward the very rich, is hurting our economy and reducing public investment at a time when we really need it.

Stiglitz says it doesn’t have to be this way. He has a new plan for overhauling America’s current tax system, which he believes contributes to making America the most unequal society of the advanced countries.

“We can have a tax system that can help create a fairer society,” Stiglitz tells Bill in the second part of their conversation. “Only ask the people at the top to pay their fair share. It’s not asking a lot. It’s just saying the top 1% shouldn’t be paying a lower tax rate than somebody much further down the scale – [they] shouldn’t have the opportunity to move money offshore and keep it in an unlimited IRA account.”

Stiglitz believes that taxes should incentivize corporations to act in ways that benefit our country. “If your taxes say we want to encourage real investments in America, then you get real investment in America… But I also believe that you have to shape incentives and that markets on their own don’t necessarily shape them the right way.”

The economist concludes that the barriers to solving our problems are political, not economic, and we can change what’s wrong if enough of us insist.

Watch part one of Bill’s interview with Stiglitz »

Producer: Candace White. Segment Producer: Robert Booth. Editor: Rob Kuhns.

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  • JC

    This has been going on for years. As long as the Federal Government does nothing to stop it..it will continue to go on as usual. If we change the tax codes to state that any corporation, individual, entity that derives income from U.S-based businesses or stocks, ownership, or investments (either overseas or in this country) will pay a graduated tax on all those proceeds at a rate proportionate to said profits and gains, then we might have a chance of getting on top of this unfair and inequitable system of taxation. Otherwise, the gap between rich and poor and, deterioration of the middle class in this country will continue to grow and, eventually, cause a financial meltdown in this country.

  • Anonymous

    FDR said to the people, You have to make me do the things this country needs. It is just as true today. We have to stop saying, what a shame it is that the government doesn’t do this or that. We have to make them. The federal government is us.

  • Anonymous

    Another egg head who just spouts theories. Give us concrete ideas, solutions , tax rates that will work and how to accomplish that. Give the names of off shore tax cheats. Does he get govt grants to write his theories? Has he ever had a real job?

  • http://Beaufishblues.wordpress.com/ leah #lovemyplanet

    He has a plan read his book.

  • http://Beaufishblues.wordpress.com/ leah #lovemyplanet

    Remember the fight to raise tax for wealthy by 1 %

  • http://Beaufishblues.wordpress.com/ leah #lovemyplanet

    Global economy has given corporation to careless if we buy their products now they have other buyers. Makes sense if we make more money we will spend here so why they hide their profit?

  • Anonymous

    It’s gotten to the point where I’m just frustrated to listen to people like Joseph Stiglitz and Robert Reich. They both put forth their ideas earnestly, as if the problem were a lack of ideas. But we have plenty of ideas. The problem is that the wealthy elites who run this country and control the farce that is the US Congress will never, ever agree to implement them.

    Come up with a way to get billionaires to accept being mere millionaires so that we can again have a thriving middle-class, and so that being working-class doesn’t require going on welfare, and then you’ll have something. But frankly, I don’t think it’s possible.

    Until this country revolts, until America explodes in nation-wide strikes, shutdowns, and boycotts, until the streets are choked with massive demonstrations, until we accept that many will have to die at the hands of the authorities before they realize they can’t kill us all, nothing will change. The plutocrats will simply get richer and richer.

    Read up on the events that led to the Mexican Revolution of 1910. We are in many ways in a similar situation, even though we’ve managed to maintain the illusion of democracy thus far.

  • Derek Groves

    The Mexican Revolution, The French Revolution , The Bolshevik revolution and most other revolutions were started the same way; by a demoralized and marginalized working class. Until a few ” heads roll” nothing will change ! Please get me straight; I am in no way advocating an overthrow or violence of any kind, however, there are those that are. Unfortunately, a lot of good people will suffer either way !

  • Alierias

    He glossed over HOW things changed after the Gilded Age/The Roaring Twenties — the battles fought in the streets by Union Members against the Corporations. Those laws didn’t write themselves — they got done because there were a critical mass of informed voters united to change things for the better, and a Congress/Senate full of actual statesmen, not bloodsucking leeches purchased lock, stock and barrel. We had a upper class that were afraid that unless the “great unwashed Hoi Polloi” were appeased in some way, the Communists would win.
    We need some of that thinking today — a realization that, in an economy that 75% of economic activity is the spending of “disposable income” of it’s citizens, without decent, living wage-paying jobs, the entire thing collapses like a house of cards…

  • Anonymous

    About six years ago I warned that if we didn’t stop printing money we would have to greatly increase the progressivity of taxation and redistribution to stem inflation that now doubles the prices of commodities and services every decade. None of it will increase the amount of investment we need to turn the West’s economies around given the current standard of living. Stiglitz and Krugman, and indeed all Keynesians and monetarists ignore this simple fact. There is nothing at all wrong with free mkt economics. That’s a slur on Adam Smith in simply following the Physiocratic dictum that workers must receive the full benefit of their labors. Could omnipotent govt possibly be any fairer than corporations? It’s govt intervention in the form of money printing and redistribution that upsets the applecart, and why? Because simpletons like Moyers continue to expect a free lunch.

  • Anonymous

    nonsense

  • Anonymous

    you mean wealthy recipients of govt transfer payments and tax loopholes

  • Anonymous

    Well, Americans are sold this marketing nonsense of ‘American Exceptionalism’ from birth and it is simply an untruth – a lie. It’s now no suprise that the Right now attacks Government as the problem (which began under Reagan) and if only Govt. were smaller all those struggling…their problems would magically disappear. It’s a joke. The only thing that would disappear would be the only mechanism we have to restore equity.

  • Anonymous

    Well, one thing is clear. You have not read his book. Secondly, you might look at Thomas Piketty’s new book as he has several very good recommendations. And, your last comment about a ‘real job’ doesn’t warrant a response – it’s childish.

  • Texsbill Gran

    agree RobertSF…wealthiest of wealthy i call SupaWealthy…there are but 2 cultures, with many subsets, in usa : supawealthy & every one else…most people comprising supawealthy culture have different belief system than 99.90% of our population….after taking care of their families, their ONLY GOAL is to increase personal fortunes….do not believe in altruism or national government…capitalism is an economic system “by the wealthy, for the wealthy”.

  • Anonymous

    There is a group that call themselves the Patriotic Millionaires. They’ve got a website. They advocate for higher taxes on their social class. I would say they have common sense and self interest properly understood, but Forbes magazine makes fun of them and suggests that they just send in extra money if they feel like making more of a contribution. Such cynics.

    Greed breaks the sack. This situation is unsustainable and could get very ugly. These guys were able to get stinking rich because they were born in the US not in Somalia. If they succeed in bilking the government to the point where it can no longer function, what currency do they think they will pay people with? Will they still be rich? It’s a mystery to me. Do they have a plan or is this obscene accumulation just a manifestation of some kind of mental illness? I really don’t want to go down with them. I think they should be heavily taxed, for their own good and everyone else’s, if they don’t contribute to society, but I have a hard time believing they ever will be.

  • Anonymous

    Funny, no one mentioned governments role in all that’s happened and is happening nor government spending that is way out of control. I had to laugh when that happened on PBS. Moyer is such a joke. These people will never get it. I gave them the benefit of the doubt for years and they never see the error of their ways. Why? That’s where the money comes from.

  • Cathy

    Mr. Stiglitz is misleading. I wonder if his paycheck depends on his ability to mislead the public. There is a difference between tax avoidance and tax evasion. One is legal and the other is not. Everyone engages in tax avoidance. Who in their right mind is going to give fiscally irresponsible politicians more money than you legally need to give them? 40% of the DoD budget is secret and more than $6 TRILLION taxpayer dollars is missing from from the Federal Reserve. The government spends billions of taxpayer dollars on 3 agencies: customs, DOJ & FDA to inspect food for safety and inspects less than 1% of the food. The problem is government acting in collusion with multinational corporations (almost half are financial institutions) that are actively engaged in criminal accounting control fraud, extortion, price fixing, monopoly cartels, on and on. Where is the prosecution? It is Congress’ responsibility to oversee and account for American money. Instead, they have happily relinquished their responsiblity and are committing treason with corporations who owe no allegiance to any town / city / county or country. It is time to stop paying taxes to government – oh…wait … Mr. Stiglitz won’t get his paycheck.

  • GregoryC

    Add General Electric, Verizon, Boeing (the corporate welfare queen receiving state and federal subsidies while earning $35 billion in profits over the past 10 years).

  • GregoryC

    The shadow government doesn’t want a fair tax code and as long as the elite MOTU in the shadow government use the NSA to bribe every politician, Supreme Court Justice, journalist, to serve their interests, nothing will change.

  • Russell Spears

    “If we just give money to Businesses that create jobs…..” yea we have been trying to do this for ever. It is time to support Democratically Run Worker Ownerships.

  • Anonymous

    Let’s just put this truth out there.

    There is NO TAX under which the wealthy pay a lower rate than the middle class. Not one.

    Investment taxes are lower than income taxes, but the middle class pay a LOWER investment tax rate than the wealthy.

  • Anonymous

    The top 1% take home 22.5% of all the income, and pay 33% of all the income taxes. The bottom 90% take home 45+% of income, but pay only 31% of the income taxes, LESS than the top 1% pay.

    The top 10% pay 45+% of ALL taxes, the HIGHEST share of the tax burden paid by the wealthy of any developed country on earth.

    The problem here in the US is that nobody pays enough taxes. The wealthy should pay a bit more, but the middle and lower classes need to pay an ENORMOUS amount more. That’s how every other country on earth handles it. They have the masses pay most of the government perks. We want to spend like socialists without having a wide tax base to support it, leading to perma-deficits.

  • Charles Shaver

    Based on hasty scans of the downloaded document with some attention to specific details, from the perspective of a former industrial electrician (with some college level Business Administration) again/also troubleshooting a ‘down’ system, the Mr. Stiglits white paper has a few basic flaws that render it less than authoritative. In a declining order of relevance here are a few of the most important flaws:

    1. Our current ‘self-perpetuating economic regression’ is again labeled as a mere “Great Recession.”
    2. There is little to no discussion relating this ‘regression’ to violations of various provisions of the legally ubiquitous U.S. Constitution and the sworn oaths of office of the public sector perpetrators, and the inherent need for prosecutions and restitution to preclude future such heinous actions.
    3. Mr. Stiglitz is under the impression businesses (corporations included) pay taxes. What they really do, required by law, is waste a lot of manpower and time to process a lot of nonsensical paperwork and pass the added expenses on to their customers in higher prices and/or diminished services.
    4. Services primarily redistribute existing wealth and should not be counted as part of the GDP.
    5. For persons of fixed and little or no means, inflation is perhaps the most unfair tax of all, as would be too a ‘VAT.’
    6. Most of the proposed changes leave footholds to create new loopholes.
    7. The extensive use of footnotes suggests little practical experience.

    With similar goals, let me suggest a simplified more practical set of proposals for a tax system oriented toward compliance with the Constitution, forming a “SAFE” (Socially Acceptable Free Enterprise) economic system and providing for established debt and public needs, with some degree/form of fine-tuning to be built-in: 1.) elect new, independent, people to Congress and the Presidency at every golden opportunity; 2.) amend the U.S. Constitution to abolish all existing domestic taxes and replace them all with an apportioned system of flat rate taxation based on exactly two forms of personal income tax: 10% on unspent earned income and 90% on unspent unearned income, with spending of one’s income required to be constitutional (consistent with the Preamble [e.g., 'promote the general welfare'], minimally) and reasonable. I haven’t crunched the numbers but it should work.

    In conclusion, there are no provisions in the U.S. Constitution for obscene wealth to co-exist with abject poverty or for foreign interests to own or control U.S. assets. My proposal inherently includes provisions to allow for low and no income Americans to survive and get ahead with minimal advantage, and for the advantaged rich to legally avoid paying taxes if they feel discriminated against having to pay huge sums of unearned money into the closed system that once enabled their predecessors and/or now enables them. Money is the lifeblood of the economy; let it flow. As for foreign aid, income and ownership and/or control of U.S. assets; well, first things first.

  • Anonymous

    “…unfortunately people don’t see that there’s a reason government doesn’t work for them.” What do you think is this reason?

  • Anonymous

    Government doesn’t work for a lot of people because of legislative capture by moneyed interests. Public policy often doesn’t respond to citizens’ needs so much as it creates rents for certain industries. Too much money in politics squeezes out the ordinary person’s access to representation and therefore to democracy and self-determination. When there is too much money in politics government becomes the private piggy bank and plaything of the powerful and the well-being of the citizen and protection of the consumer can fall by the wayside. Meanwhile people are told that government doesn’t work because it’s government.

  • Lorry frey

    Taxes that are shaped, bought and paid for by the rich benefactors are called illegal by them. Therefor they can be avoided. Really?

  • Amna M

    The bottom 50% has little left to pay for their basic needs after they have paid their ‘low’ taxes pushing them below the poverty line at times
    but the top 10% still have plenty to splurge after they pay their share of ‘high’ taxes. This difference needs to be accounted for in your analysis.

  • Anonymous

    You conveniently disregard the underlying income data. The top 10% receive 35% of the labor income plus 90% of the investment income and unrealized capital gains. This is aptly indicated by the fact that corporations are paying record low wages to their employees as a per cent of GDP while achieving record profits as a per cent of GDP.

    All of these profits serve to fill the pockets of the top 10% and especially the top 1% at the expense of workers whose median income has not risen in decades and who pay ever-increasing rates for insurance, registrations and fees. Workers also pay regressive social security and Medicare costs which are capped above a certain income level.

  • Anonymous

    No, I don’t. The same studies showing that wealthy US taxpayers pay the HIGHEST share of the tax burden of any country on earth also corrected for the share of income.

    They found that the ratio between share of the tax burden paid by the wealthy and the share of income going to the wealthy was again the HIGHEST in the US of any developed country.

    google
    US Has Most Progressive Tax System for OECD-24

  • Anonymous

    Stop the state and federal benefits to the poverty wage workers and watch the walkouts and strikes take place

  • Th3 J

    Federal taxes aren’t need to “pay for” fed programs. The US gov’t is the monopoly supplier of $US, it doesn’t need our tax revenue in order to spend. _Inflation_ is the only constraint on US govt spending, not revenue.

    Also, we _must_ always run a deficit if we also run a trade surplus, _if_ we don’t want to drain money from the private sector. Read up on the “sectoral balances”.

    Many people have a misconception that federal deficits are bad. But the US gov’t debt does not need to be “paid back”. Those debts are our (private) assets.

    The “right” deficit is one that is just big enough to generate near-full employment, without significant inflation.

  • Anonymous

    We aren’t running trade surpluses, we are running trade deficits. China is running budget surpluses and trade surpluses, and their economy is growing faster than ours every year.

    And our dominance as the world’s reserve currency is fracturing. We can only run endless deficits to the extent that the private sector will continue to invest in our debt with confidence. How fast did Greece’s debt skyrocket after the public lost confidence in their ability to pay for their outstanding obligations?

    Interest rates went from 5% to 30+% in months.

  • Th3 J

    Sorry, I indeed meant US trade deficit, not surplus.

    China, like the US, does run a budget deficit [1], if not as large. Sure their private sector is growing, the trade surplus and the govt deficit are both net flows *into* their private sector.

    Three points:

    1. The US gov’t will always be able to sell its debt if it wants to. There is always demand among savers for a stable, interest bearing asset.

    2. If it wants to, the US govt can create dollars out of thin air. It does not strictly depend on tax revenue or borrowing in order to spend.

    3. Greece is a completely different situation — it does not have currency sovereignty. It’s a *user* of the currency controlled by the ECB. In contrast, the US dollar is a non-convertible, free floating currency, of which the US gov’t is the monopoly supplier. Unlike Greece, It is literally impossible for the US gov’t to default.

    You might want to check this out: http://www.nakedcapitalism.com/2014/05/mmt-postcard.html

    [1]: http://en.wikipedia.org/wiki/List_of_government_budgets_by_country

  • Anonymous

    May be progressive, but effective tax rates for super-rich are the lowest and this does not even take into account money hidden offshore and unrealized capital gains that are bequeathed and never taxed.

  • Anonymous

    The average budget deficit in China over the last decade is -1.5% of GDP. The average budget deficit in the US over the last decade is -6%. Why aren’t we growing 4x as fast as the Chinese, with all this pro-growth deficit spending?

    Yes, the US can create dollars out of thin air. However, they can’t buy oil with funny munny. They can’t buy machinery or electronics or vehicles with funny munny.

    They can’t pay Social Security with funny munny. They can’t pay Medicare benefits with funny munny.

    The only thing they can do with funny munny is break their promises to those who have invested in US government debt, including those who have put trillions of real money into SS and Medicare with a promised benefit attached.

    Greece could not inflate away their reckless budgets, because the Euro acted as an inflexible check on them. The obligations we have to seniors, to holders of US debt, etc, also act as a check on our ability to simply inflate away our debt. Pretending like debt inflation is a reasonable plan for how to deal with unsustainable benefits (SS and Medicare are prime examples, where inflated money will cause inflated costs and you never catch up) is ludicrous.

  • Anonymous

    That’s not what Moyers and Stiglitz are arguing. They’re saying that the wealthy aren’t paying “their fair share”.

    They are paying MORE than their fair share, compared to any other country on earth. If we’re going to talk about “fair shares”, then we should first raise taxes on the poor and middle class dramatically to bring our tax progressivity into balance with the rest of the world, THEN we can talk about what else needs to be done to generate the appropriate amount of revenues.

  • http://www.im-jus-sayin.com/ Robert Bostick

    Bravo!!! Viva MMT

  • Anonymous

    How can they be paying their fair share if their effective tax rate is substantially LOWER than middle class workers and they are paying nothing for offshore investments through tax havens and unrealized capital gains? What exactly am I missing!

  • Anonymous

    They pay much more in property taxes, much more in consumption taxes, gobs more of income taxes, and pay a higher rate on capital gains taxes. And they cap out on payroll taxes as well, which the lower and middle class do not do.

    They do not qualify for child tax credits, earned income tax credits, education tax credits, Roth investments that have tax advantages, etc.

    Again if you look at the sum total of ALL taxes collected at the national, state, and local level and calculate what share of the total tax burden is paid by the wealthy, it is the highest on earth. 45.1% of all taxes are paid by the top 10%. In some other socialized countries, it is as low as 25%.

    If the “fair share” is 25%, then the wealthy are paying far more than their fair share.

    What share of the total tax burden do you think the wealthy should be paying, and how does that square with the share paid in other countries around the globe?

  • jim davis

    Want to restore the middle class? Then pass the EFCA, take the money out of politics (all of it) get out of NAFTA, the WTO and stay out of the TPP!

  • jim davis

    The top “one tenth” of one percent take home 27% of all income. If you are in the bottom third of the top one percent you have lost real income since 2000!

  • sean

    Q: What is similar in this conversation to those on FOX?

    A: The structure of referencing data and studies with little reflection on the genuineness of those sources. “We know for example, that….” When details are very complex and the messengers are on television the average person will be noticing the style of the messenger and determining the accuracy of the message based on whether they like the messenger or not.

    Provide me the data you are referencing; help me analyze it to see why it is a fact. Then i can believe your message. All else is more of the same.