David Cay Johnston Explains How Big Corporations Withhold Your Taxes and Then Pocket Them

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http://www.alternet.org/books/outrageous-david-cay-johnston-explains-how-big-corporations-withhold-your-taxes-and-then



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Lat week, AlterNet caught up with Johnson by phone. Below is a lightly edited transcript of our discussion.

Joshua Holland: David, for years you’ve reported how those who can afford the right accountants game this labyrinthian and opaque tax-code of ours. How surreal has it been for you to observe the amount of political conflict we've faced over the past few years over returning the top marginal rates to the same rate that they were during the Clinton era -- taking them from 35 percent to 39 percent?

David Cay Johnston: I am actually heartened, Josh. I think that we’re starting to see the end of those Chicago School economic theories – by the way, I went to the Chicago School 40 years ago, but I did not drink the Kool Aid.

The reality is people are now, finally -- and I can claim some of the credit for this through my books and my reporting -- people are looking around and saying, 'Wait a minute! Starting back in 1980, I was promised that I was going to have a better life. We’d all prosper. Yet all the gains are going to the top.'

Let me give you a stunning number I reported the other day. From 1966 – when Lyndon Johnson was president -- to 2011, 45 years later, the bottom 90 percent of Americans’ average income, as reported on tax returns, went up by a stunning $59 -- almost no change at all. If you measure that $59 increase for the vast majority of Americans as one inch, then on the same scale, the incomes of those in the top ten percent went up by 168 feet. The top one percent, 888 feet. The plutocrats -- the Mitt Romney crowd, the top one percent of the top one percent? Their incomes rose by almost five miles relative to that one inch.

[rateyes]

1. This country needs a good general strike from every labor union in it.

[libdude]

2. Agree and disagree

I agree about a general strike but disagree that it is just the unions. Over the years unions have been reduced in membership and thus their potential effectiveness to effect a general strike is not significant. So many areas of work are not able to bargain collectively which again provides no potential for large unified action.
This in light of the current effect of money used by the top 1% to purchase political power which in turn created the current tax system which insures that the current system remains in place, just reinforces that the trend of wealth inequality will continue.
To me, there needs to be a general strike of the people, the 99% if you will, to draw attention to the political powers both Republican or the Democrats, that the people, will no longer accept this inequality in income as Mr. David Johnson has so capably demonstrated.

[Overseas]

3. The situation is so outrageous that we can't bear to confront it, so we pretend that 98% of us are

somehow flawed, demanding a handout, if we seek a bit more economic justice.

I'm still mad at the "New Democrats" in the 90's who gave in to corporate power on media consolidation and financial deregulation.

They wanted to show that New Democrats could be reasonable and pretend that working with corporations would lift all boats. And I guess it did, but it certainly lifted some boats far higher than others.

AND opened the door to more "reasonable" behavior by Democrats that let our country be dragged way over to the right.

I am very sad that those "New Democrats" who were already old fashioned in the 90's, given the ecological and economic realities of the day, are still around pretending compromise will serve us all.

[cbrer]

4. An important article

That illustrates the effectiveness of media and complicit market forces at making "average" Americans willing to put up with the status quo. As well as the incomprehensible gobbly-gook that is our Federal tax code.

Until we, as a nation, rise up against the usurpation of our rights, freedoms, and self determination, those in charge will NOT cede an inch, or a cent!