What Would America Look Like If We Taxed The Rich (w/ Richard Wolff)

What Would America Look Like If We Taxed The Rich (w/ Richard Wolff)


– Professor Richard Wolffe is
with us in this hour.
He is the economist and co-founder of Democracy at Work.
The author most recently of “Capitalism’s Crisis Deepens’,
essays on the global
economic meltdown, our old buddy DemocracyAtWork.info and the
RDWolff.com website You could Tweet him @ProfWolff. Professor Wolff, welcome back. ~ Thank you Thom, glad to be here.
– It’s great having you with us.
The the tax scam, the GOP tax scam, that has jacked
our budget deficits so far by $1.5 trillion, I believe the total
impact of this over a decade is $6 trillion dollars . . . I remember
either five or six from when it was first rolled out.
People are looking at this going,
“Well maybe we should reverse this” Democrats are saying:
“If we get into power we would reverse it”, but George W. Bush did the same thing
and I understand that had George W. Bush never done his tax scam, had Donald Trump never done his tax scam, and had George W. Bush not lied us into the war in iraq and started the war in Afghanistan, we would have paid down the national debt basically, by now because Clinton handed off surplus
budgets in2000, please reality check that but (B)
it all raises the question what if we went all the way back to Reagan, which
was the original GOP tax scam. He came into office, the top
marginal tax rate was 74%, the corporate rate at
that time was around 35 or 40% and he dropped it down to 25% famously
and floated back up from there. But what if we were to roll
back all three of these Republican administrations tax scams and go back to
a tax rate that brought us the 50s the 60s and the 70s, which were
the three most prosperous decades for the middle class, literally in the
history of the United State.
What do you think ? ~ I think the idea is fine, I don’t
know how how fast one would do that unfortunately when a government is run
by people whose political program comes down to buying the financial support of
corporations and the rich by giving them periodic enormous tax cuts and and that’s really what went on, by the time you’re
done, when you do those kinds of tax cuts, the only way the government can keep
functioning, everything from the military to Social Security and everything else,
the only way the government can function if it gives away their taxes from
corporations and the rich, is if it borrows the money that it’s no longer
raising in taxes from them.
The horrible irony of it all is that a good part of
what the government borrows when it gives tax cuts to corporations and the
rich, is money lent to the government by corporations and the rich who are
lending to the government the money they didn’t have to pay in taxes and the
absurdity of that and the injustice of that ought to grate on every American
citizen.
But only part is handled that way. A large number of pension funds lend
money to the government, a large number of American citizens have put away their
savings, their retirement and those people have to be in some way kept
harmless in what we do, since they just cashed in on the little bit that was
available for them as part of it>So I like your idea, I think it’s long overdue
but it would have to be done probably with some gradualism and some care built
in so, it doesn’t inadvertently hurt the people who bear no responsibility for
the for the awfulness of the whole process. – Well and in regards of that,
I had a guy call in last week or maybe was Monday this week
and say that he was making a little over 120 grand a year and he had seen about
$1,000 extra in his paycheck as a result of the of the Republican tax cut and
he’s like, but why shouldn’t I be happy about this?
And I suggested to him,
that in the employment market, the labor market, for people who don’t have
control over their own income which is like the bottom 99% of us, that
that labor market is based not pre-tax income but on post tax incom,e in
other words, the employers out there who are hiring people in
particular job categories, in particular labor markets know, what someone’s
willing to work for after taxes ,so if he’s making a hundred and ten and he’s
pennies and he’s actually taking home eighty his employer knows he’s willing
to work for eighty, so if he gets a massive tax cut and suddenly he’s making
ninety, his employers is going “Hey I can find somebody who will do this job for
80 you would do it for 80 before” and so he lays the guy off, he fires him and
replaces him, basically the wage comes back down again, so that the
take-home pay is still the same. On the other hand, if he had a massive tax
increase and suddenly he was only taking home $60,000 a year and was starting to
look around for another job or something like that his employer would have to
raise his income in order to get him back to that same level, which
is why in Denmark, the minimum wage is over $24 dollars an hour,
because the the average tax rate on working people is in the thirty to forty percent.
And it’s also why if you go back to tax tables going back to 1900
and it sure looks to me like if you look at three and five year windows
as taxes on working people go up, wages go up.
As taxes on working people go down
wages go down with regard to the very top though when taxes go down they get
more money when taxes go up they get less money.
Is that a reasonable and
accurate analysis or am I just out here you know blowing hot air into the wind?
~ No, no, you’re bringing up something that is quite valid and it is unfortunately
very poorly understood in the larger population. But if I could speak for a
moment to what your callers said, there is no way to nail down, in any definitive
way, whether a wage increase that he may have gotten say over the last eight
months since the tax cut of 2017 took effect, was because of the tax cut as
opposed to twenty five other possible reasons that led that employer to raise
his wage. The employer might say something like, “I’m sharing with you what
I got as tax-cut”, but both Bloomberg service the
Financial Times, half a dozen agencies have now studied what corporations did
across the board with the tax cut money. And their conclusions, were very few
somewhere between three and five percent of American workers, got any portion of
that tax cut. It was overwhelmingly used for stock buybacks, that’s when companies
buy back their shares in the market, to raise dividends to shareholders, and to
raise in pay packages for top executives, which corporations are free to do and
which is what they in fact did. All the talk about how it would end up helping
workers wages that’s just the same old trickle-down nonsense that if we give a
tax cut to corporations and rich somehow it’s going to find its way into average
people’s pockets. That is very rarely true and the statistics are now in that
it has not been the case with the tax cut of December 2017.
– And he was asserting that his taxes were a thousand dollars lower
thus he had a thousand dollars a year more in his in his pocket, but I’ve also
seen numbers that I just saw this a couple days ago, that
suggested that while the average income the average wage in the United States is
around $44,000 right now, the median wage in the United States there was half
above half below is only $33,200 and the
reason for that difference is that the average includes all these people who
are making literally millions and millions of dollars at the very very top
of the wage scale, but that’s not that many people, it’s just a hell of a lot of
money, and so the median is actually a reflection of what most people in America are earning, which is in the low 30s and is that accurate?
~ Absolutely and let me quote to you a wonderful piece of statistical work done
by the Economic Policy Institute in Washington DC.
They divided wages into high medium and low and they asked the question
“How have these three parts of the wage distribution done between 1980 and now”?
And what they show which is startling, is that the lowest of wage people are
actually worse off if you adjust for prices as all of these numbers do.
They are worse off now they can afford less out of their weekly wage than they could
30 ago, in 1980 roughly. The middle group, is just slightly above
maybe three or four percentages above now what they were back in 1980, 38 years ago. o
Only the high wage people saw an appreciable increase in the neighborhood
of thirty to forty percent. Which means, that over the last 30 years, the
middle and the bottom which is more than 50%, went absolutely nowhere or
shrank in terms of what they were getting for the labor effort they put out.
Only those at the top, and particularly because of the very top as
you just noted, were able to do better and that’s a large explanation for the
political divide we have for the rage in the population that watches the
so-called wealth effect or the recovery that seems forever to pass them by.
They’re right it has passed them by but the whole last 30 years have passed
them by they’ve gotten no wage increases. The vast majority.
Meanwhile their productivity, what they do for their employer, has gone up, and therein lies
the explanation for growing inequality. The people who do the work, are stagnant
and the people who get the fruits of the work are gathering and accumulating
wealth, producing the kinds of divisions that are roiling our culture and our
politics.
– Yeah and we talk about average wages instead of median wages
because we’re just economically ignorant?
~ It disguises all that. – It disguise that, there you go, that’s
very well said.
So we’ll see how this all shakes out.
it’s just a remarkable time and but rolling back the Republican tax scam
seems like a really really good idea. Richard Wolffe, Professor Richard Wolff,
the co-founder Democracy at Work DemocracyAtWorkinfo is the website.
RDWolff.com, his website
and you can tweet him @prop
wolfprofessor. – Well thank you so much for dropping by today.
~Thank you Thom, speak to you in the future. – Thank you I look forward to it, I always learned from it.
We’ll be back. PLEASE SUBSCRIBE TO THE CHANNEL !

46 Comments

  1. Henry Gustav says:

    Would like to see Stephanie Kelton in this conversation.

  2. Bob Ramsay says:

    Its really simple you pay taxes to the government then you demand from them what you want if you ask for more you pay more if they dont come through with what you want you replace them theres only one catch you have to participate.

  3. Red Baran says:

    Government surplus = public deficit

  4. EmmittBrownBTTF1 says:

    Flying cars with molten salt thorium reactor, good for the life time of the owners great great grandchildren. Flux capacitors, commuter teleportation. no traffic.

  5. Bumblebee 9337 says:

    Pay down national debt = empty everyone's bank accounts

  6. Danny Windham says:

    Tom the gold standard Hartman you will never let it go will you man Professor Stephanie Kelton mmt

  7. Gloria Lewis says:

    We used to tax the rich, pre-Reagan. It was patriotic to pay your fair share of taxes though the rich grumbled aout it, they paid. No longer. Only the "little" people pay taxes now so said Leona Helmsley. Abigail Disney put out a video about the top 1%. The government has to limit to what they can spend on wars since they have all the loopholes to get out of paying the taxes.

  8. robert forsythe says:

    The rich have found a way to get tax deductions. Bribe the President and politicians and blame it all on Social Security!!!!!!

  9. djangokill65 says:

    MORE WOLFF!!!

  10. Thunderbird says:

    We enjoyed our greatest prosperity between 1940's – 1960's with upper tax rate >90%

  11. Harry Hightower says:

    What Would America Look Like If We Taxed The Rich Fixed as far as is humanly possible with the right people running things. yup have to be fair even to the unfair.

  12. andy patch says:

    The top 5% of income earners pay 60% of all taxes. Try again.

  13. Jonathan Fox says:

    Shamefully both Thom Hartman and Richard Wolff are mostly wrong in their discussion except stating that only corporations and the wealthy benefited from the tax cut. Talking about the Deficit and the National Debt in relation to tax cuts is the wrong discussion and promotes fear mongering. This is mostly Neoliberal propaganda and very misleading. Being familiar with economic professor Stephanie Kelton and her work, they should know better but continue with outdated Gold Standard logic. If could actually admit the truth that federal taxes do not directly pay for anything or that tax revenue is not necessary for federal government to be able to spend, this would be a completely different discuss

  14. mister.T Jr says:

    I (heart) Richard Wolff.

  15. Nicole says:

    George w bush did his tax scam…and then Obama made it permanent. But of course Thom doesn't bother to mention that…sounding VERY partisan these days thom

  16. cozy comfy says:

    Professor Wolff and Thomas Frank are my favorites.

  17. StealieSteve says:

    I got some lovely t-shirts from my employer and when I asked why don't we receive a bonus after these two tax breaks for the morbidly rich? I was told corporate is tightening up their purse strings/ times are tough 😉

  18. clifford maxwell says:

    we need to tax the hell out of the rich make wall street, the big banks and corporations pay there fair share for a change. This continued trickle down nonsense is ridiculous it doesn't work now and it has never worked to do anything but make the rich richer as the rest of us struggle or worse.

  19. David Zapen says:

    Who downvoted? Thanks, professors! 💰

  20. BlaBlog101 says:

    I remember my grandparents calling some the 'filthy rich'. Now, they're called 'job creators' except that's a complete lie and a convenient term used to cover up corruption and tax-avoidance.

  21. CavemanSynthesizer says:

    Um… we already tax the rich?

  22. MrPedur says:

    You are mentioning Denmark as an example , but we have a decline in the economy and the same is happening here. Big banks has been stealing revenues and the wages has stagnated for decades. Our system is just as rigged as yours. Only Ceo salaries has gone up and the political system has undermined the low income section. In Denmark you will soon have to keep two jobs to make ends meet. We are just a little late to the party , as we usually are….

  23. jmitterii2 says:

    I notice this effect with taxes higher wages higher, taxes lower wages lower between Idaho and Washington state… Idaho has a state income tax effectively for everyone since it's "bracket" tops out at income after $11,000 makes it effectively for everyone at about 7.3%… Washington has no state income tax… the wages on the same type of lower end jobs from call center work, to warehouse work, to even skilled work is less in Washington even around the Seattle area… call center workers in Idaho in 2011 were making $13 to $14 an hour… Washington it was $9 to $12 an hour. Similar were other jobs like forklift drivers 2018 $13.80 in WA and $15.50 in ID. This compares non-union work. WA does have higher union participation, in union jobs both Idaho and Washington people tend to have 20% to 50% higher pay for the same type of work and position.
    But like Idaho, despite having more union participation than Idaho most jobs in WA are non-union. And they enjoy lesser gross pay with their no-state income tax.
    Until now, I just assumed that may be coincidental. WA does have a sales tax of 9% depending on the county and perhaps the city too.
    Idaho has a 6% sales tax throughout the state… and only two variations of property tax… city or rural… and a 50% discount on that property tax if it's your primary home you live in. In Idaho, cities and counties can't easily tax separate only taxing authority is at the state level. Always found that interestingly hypocritical of the GOP when they clench their pearls and scream states rights, local government does things better… but when the shoes on their foot, it suddenly the higher level government does better than local cities and counties.
    Basically the right wing strategy is there are no principles, just pretend a position if that position in that situation is convenient to get what they want… usually workers to shut up and work for peanuts, and more money and power to do whatever they want.

  24. Paulette Niemiec says:

    I'd like to understand this better. Can you "dumb it down" so the average person who doesn't understand all this CAN understand it? How do I explain to someone who shows me their paycheck stub that they are actually being ripped off? I don't get it.

  25. clifford maxwell says:

    lol it always cracks me up when these conservatives start spouting off old debunked figures about how the 1% pay 40% of the fed income tax and the bottom 50 % pay almost nothing and the top 50% pay all the taxes they tend to leave out how its completely rigged for the rich to get richer the tax code has been riddled with so many loopholes for the wealthy and the big banks wall street and corporations that many of them pay little or no taxes at all and some even get money back that they never put in corporate welfare is the worst! The reason the statements are so misleading is because the top tier earners pretty much make all the money and the bottom 50% have virtually nothing because the corrupt capitalist system insures it to be the case as it sucks all the money to the top yes the wealthy who accumulate more and more money which they pay little or no taxes on only pay a fraction of it if any back in taxes the rates are ridiculously low compared to their incomes and no they don't work harder if they work at all they just get rewarded with more money for simply already having lots of money and benefitting off the actual work of others through their investments while most people don't own a single share of stock because they are to poor after the market crashed the wealthy, big banks, wall street, and corporations got bailed out by the tax payers the homeowners that lost their jobs and couldn't pay the mortgages were thrown out to the street so disgusting and just for the record the bottom 50% still end up paying taxes on purchases with the little bit of money they do have. The 1% pay the lions share of the taxes because they are virtually sucking in all of the money generated while their tax burdens are miniscule compared to their enormous incomes for doing little or nothing other than having lots of money to begin with its rigged folks even when they screw up and lose it all we give them a big fat new bag of money because there too big to fail!

  26. dlee t says:

    http://politicsthatwork.com/graphs/highest-gdp-growth-president

  27. 007 Ou812 James says:

    billionaires Millionaires freeloaders moochers Welfare SOCIALISM Society Class, Raise the Dame min fed wage to $15.00 hr, Same stagnated decades old min fed wage $7.25 hr Biggest Fraudsters Criminals in history, Stagnated Wages with skyrocketed inflation, $500,00 to blow job speaker house Ryan from Koch scumbags brothers, a extra $20 billions to Koch on tax scam, 3 major banks reported a extra $6.4 billions, Apple saved $40 millions on taxes, Kushner paid no taxes since 2008 an reported$423 millions in earnings, Welfare Warren buffet pays less taxes than his secretary, Welfare Queens !! All should be line up an Shot ! Hijack Government with Common Criminals Thieves.

  28. real eyes realize real lies says:

    Bush did the same thing with tax scam cuts and Obama made them permanent. Both sides are owned by the same people, corps, banks, moneyed interests. There exists no altruistic or sane faction of empire. Everyday the two parties come closer and closer to morphing into one fascists party….

  29. Brian Booker says:

    Great video

  30. Bob Pen says:

    The tax cuts to the rich and Corporate America have continued to raise the deficit even through the 17-year war we were given tax cuts to Corporate America and richest 1% how patriotic is that our 23 trillion dollar deficit will not get reduced unless everybody pay their fair share of taxes I truly believe that in the end the entitlement programs will be wiped away to lower the deficit and again the middle class and the working class poor we will carry the burden but all Americans should look at our deficit the same way we look at War because debt is destroying our country and tribal politics is the problem both parties share the blame because Corporate America is running the country not the American people

  31. bigraviolees says:

    enjoy retiring at 78 so the Kochs can have one more 23 bedroom mansion

  32. Mark East says:

    Better off

  33. Troy J says:

    The richer you are [born] the dumber you can afford to be.

  34. Damon Beasley says:

    If your vote doesn't count. Just remember Hillary Clinton was a BITCH.

  35. CHIBUZOR AZUKA says:

    Humanity has failed Capitalism, just as we failed Christianity.

  36. asz says:

    Tax rates are not the problem. The "loopholes" and write-offs are what brought the real rate down to 20%. Those write-offs directed corporate profits in a way that put them back into the company and provide raises to the workers. Rates were reduced in the latest tax cuts but write-offs and loopholes were retained. Now, corps can do buybacks and stock support while reducing their real tax rate closer to 10%. Rip off that will improve the DOW in the short term but hurt the economy later.

  37. typeviic1 says:

    Tax the only property immune from property taxes. Tax stocks!

  38. Trotskisty says:

    EAT The Rich.

  39. Rosa Lichtenstein says:

    Excellent video, but it fails to show what the US would be like if the rich were taxed. The question isn't even broached.

  40. Rita Marie Kelley says:

    Obama could have accomplished this in his 8 years, but instead behaved like a Republican.

  41. Travis Brewer says:

    The most accurate reflection of most people’s income would be the mode income.

  42. Don Ghidoni says:

    It never ceases to amaze me that critical thought is going by- the-way. Of course it's discouraged in most education systems in favor of collective thought, but the concussion comes from the fact that we're all born with a brain that has survived evolution through innate critical thought. Perhaps someone could explain to me why it isn't just plain laziness on the part of some, or the many, of the people who call into Thoms show?

  43. Janet Lynch says:

    Thom, please talk about Corporate "Tax Inversions," which actually are what's sending our jobs away. A creation of our Government politicians…namely the GOP, since 1982.

  44. Diane Wiegel says:

    trickle down nonsense indeed

  45. Chris C says:

    I asked my accountant once, What's the best business to be in? He said, "Your own gig." I have found that if people actually had a product or service that others actually WANTED, and these people actually worked at it, and were smart as a fifth grader in investing and protecting their assets they would make more and complain less. We have too many complainers. And I am not rich.

  46. v. w. says:

    I enjoyed this. I thought I was the only person that noticed the working class is being schemed OVER TAXED.

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