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Monday, May 11, 2015

The Problem with the U.S. Tax System

What's wrong with our tax system? David Cay Johnston explains in this great piece below.

A snippet: 

"If you go back one year to 2011, and you take - there was a little higher income in 2011 than 1966, for the vast majority, and just count that as one inch, they got $59 more income after all those years, they got one inch. The plutocrat class, this is the small group at the top of in this case 16,000 because it's a different statistical measure, 16,000 households in a country of 316 million people, compared to that one inch their income is up five miles, just a bit under five miles, one inch to file miles.

All the gains are going to the top, and it's not because everybody else got lazy or stupid, it's because we cut taxes at the top. We changed the rules. We put in place all these hidden subsidies I've been exposing for years that take from the many and redistribute upward to the few...

...YOUNG: Well, a ballooning capital gains pie lifts all boats, I mean, that this will trickle down to jobs.

JOHNSTON: That's - if that were true, and that's what the data showed, I'd be all for it. What the data show isn't trickle down by Niagara up. And more and more capital is being invested in unproductive ways. It's being used in this high-speed trading and to froth the market, which I've been writing about for years, and there's now an excellent book out by Michael Lewis explaining as an insider how this stuff works and how we have a bunch of dishonest markets."

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