Yesterday, I was talking to Andrea and the subject of trickle down economics came up. I said that it should really be called “tinkle down economics” because it is all about urinating on the poor. She countered with something that I don’t even like to think about, so I certainly won’t repeat it here. (She was having a bad day.)
I thought that phrase was pretty clever, but like anything clever I come up with, I was sure it wasn’t original. So I performed an internet search, and it turns out to be a fairly uncommon turn of phrase. But Jim Hightower beat me to the punch. (That’s not bad; I don’t mind following in the footsteps of someone as wonderful as Hightower.) Last tax day, Katrina vanden Heuvel, publisher of The Nation Magazine, wrote about this in an article title End ‘Tinkle Down’ Economics.
Then in December, the Obama-GOP deal extended the Bush tax cuts for the wealthy at a two-year cost of about $70 billion a year. Now Congress is making $40 billion in painful budget cuts this year. Meanwhile, President Obama, Representative Paul Ryan and others are battling over budgets and tax plans for the next decade and beyond. For the most part, what’s been missing from these suffocatingly narrow discussions is an easy source of income: taxing investments like ordinary income.
The folks over at Responsible Wealth believe not only that the Bush tax cuts on upper-income folks should be ended but also that money made from money (i.e., capital gains and dividends) should be taxed like money made from work, not at the preferential 15 percent rate. They have a simple calculator that calculates your tax savings using just three numbers from your tax form (or from your head), and an interactive graph with videos of people talking about their taxes. It’s worth checking out at responsiblewealth.org.
Taxing capital gains and dividends at regular income rates would save $84.2 billion in 2011 alone, twice the amount we’re cutting from this year’s budget.
Don’t let the rich pee down on me.