By FRANK CARINI, ecoRI
Republicans cut them in time of war. Democrats view them as a panacea. And both parties have designed a convoluted system that allows the very rich to pay a lower tax percentage than everyone else — and there appears to be little chance this inequitable practice will be remedied anytime soon.
In fact, it’s no secret that many of the taxes that have been spewed forth by D.C. lawmakers for decades as ways to help the middle class are nothing more than a charade.
For example, as economist Joseph Stiglitz documents, the mortgage interest deduction provides more assistance to rich homeowners than to the middle class, because it “encourage excessive housing consumption and excessive borrowing — not surprising, given the political clout of our banks.”
Stiglitz, who received the 2001 Nobel Prize in Economics, notes in a white paper recently published by the Roosevelt Institute that the U.S. government provides more housing assistance to the rich through an elaborate tax system than it does to the poor through public housing.
Our rigged tax system helps explain why middle-class incomes, adjusted for inflation, have barely increased in decades. From 1978 to 2013, a typical worker’s compensation rose just 10 percent. In that same 35-year period, CEO compensation, adjusted for inflation, increased 937 percent, a rise more than double stock-market growth, according to the Economic Policy Institute.
Taxes are an integral part of a well-functioning economy, and society. After all, this country’s two most successful and innovative industries at the moment — high tech and biotech — were propped up by government research and funding.