Author Archives: Mary Turck

Even if multi-millionaires simply pay what they owe, they will still not be paying what they should. (And, as I noted in yesterday’s post, multi-millionaires are the biggest tax evaders and the least likely to be audited.) Deductions, exemptions, lower tax rates on capital gains, tax shelters available only to those with a lot of money: these all combine to reduce the amount of income on which taxes are paid. But that’s not all: low marginal tax rates and inequitable rules on social security contributions are big factors in lowering taxes for high-income earners. This happens in two ways: 

First, the highest-income earners do not have to pay Social Security and Medicare taxes on most of their income. 

Second, the marginal tax rate on the highest incomes has been slashed over the past 80 years. 

Besides these problems with individual taxes, large, profitable corporations got a massive tax break in the Trump years and still managed to keep the loopholes that help many avoid paying any taxes.

The Social Security problem

Employers and employees each pay 6.2 percent of wages up to the taxable maximum of $160,200 (in 2023).  Self-employed people pay 12.4 percent. Add to that the Medicare tax of 1.45 percent on employees and 1.45 percent on employers, and 2.9 percent for self-employed individuals. That’s a combined payroll tax of 15.3 percent on the first $160,200 of earnings.  

This starts out as a flat tax: if you earn $5,000, you pay 15.3 percent in Social Security and Medicare taxes. If you earn $100,000, you pay the same 15.3 percent. That’s in addition to any income taxes that you pay. 

But when you earn more than $160,200, then you pay less. Actually, it’s even worse than that. The income tax rate applies only to “taxable income,” which is income after subtracting deductions and exemptions. Social Security and Medicare tax applies to every single dollar you earn in wages or self-employment income. 

You may have heard the refrain that “Social Security is going broke.” I started hearing that when I was in 8^th grade, about 50 years ago, so I’m not entirely convinced that it is true. But even if it is true, there’s an easy solution: just make the highest earners keep on paying Social Security and Medicare taxes, instead of giving them a pass after they hit the $160,200 earning mark. That would make Social Security and Medicare solvent forever. 

The Maximum Tax Rate is Too Low

This gets a little complicated, but it’s worth the effort to understand. 

The marginal tax rate is the rate paid on different levels of taxable income. That’s income after all deductions and exemptions—and remember that those deductions and exemptions already drastically reduce the amount of income that counts as taxable income for the highest earners. Here’s the table showing current marginal tax rates:

(For a more detailed explanation of tax rates, tax brackets, effective and marginal tax rates, etc., see Investopedia’s excellent article on marginal tax rates.)

Here’s how marginal tax rates work. A single taxpayer with a taxable income of $50,000 in 2022 would pay:

• 10 percent of the $10,275 in taxable income that falls in the lowest tax bracket. That’s $1,027.50. 

• 12 percent of the $31,500 in taxable income that falls in the next tax bracket. That’s $3,780. 

• 22 percent of the $8,225 that falls in the next tax bracket. That’s $1,809.50. 

Now, what happens if someone has a taxable income of a million dollars? Like the taxpayer with $50,000 in taxable income, the million-dollar earner still pays 10 percent on the first $10,275 of taxable income, 12 percent of income between $10,275 and $41,775, and 22 percent of income between $41,775 and $89,075. 

The tax brackets keep on going up to the highest: 37 percent of taxable income in excess of $539,900 for a single taxpayer with no dependents. 

Is 37 percent a high tax rate? No. Historically, that’s a low marginal tax rate. Back in 1940, the highest marginal tax rate was 81 percent. During World War II, that increased to 94 percent. In the Republican years of the Eisenhower presidency, the highest marginal tax rate remained at 91 percent. In the mid-1960s the tax rate on the wealthiest U.S. taxpayers started going down, bottoming out at 28 percent in 1988. (For the complete history, see this table from the Tax Policy Center.)

Remember: Nobody pays an income tax rate of 37 percent on their income. The highest rate is ONLY paid on (1) that income that is considered “taxable income” AND (2) the portion of taxable income that is in excess of $539,900 for a single taxpayer with no dependents. 

Pro Publica analyzed how much—or how little—the 25 wealthiest taxpayers in the United States pay:

“On average, they paid 15.8% in personal federal income taxes between 2014 and 2018. They had $86 billion in adjusted gross income and paid $13.6 billion in income taxes in that period.

“That’s lower than the rate a single worker making $45,000 a year might pay if you include Medicare and Social Security taxes.”

And that’s why I think the highest marginal tax rate should be MUCH higher than 37 percent. 

Corporations Evading Taxes

And then there’s the corporate income tax. Corporations pay a flat rate of 21 percent on their profits. Remember—only on their profits. That means they can deduct every penny of million-dollar executive salaries and every penny of their “doing business” expenses, depreciation, etc. from their income before reporting the taxable profits.

The 21 percent rate went into effect with the Trump tax cuts of 2017. Before that, corporations paid tax on profits at an official rate of 35 percent. 

But wait—that’s only the official tax rate. Corporate tax loopholes mean the actual rate is much lower. Investopedia reports:

“The difference between the 21% statutory corporate income tax rate and the effective rate based on the cash taxes companies actually pay is the result of generous tax breaks doled out by U.S. Congress.

“The 379 profitable Fortune 500 companies paid an average effective federal income tax rate of 11.3% on their 2018 income.”

In fact, the U.S. Government Accountability Office found that many large and profitable corporations pay no income taxes.

“In each year from 2014 to 2018, about half of all large corporations had no federal income tax liability. For the purposes of this report, GAO considers “large corporations” to be those that filed Internal Revenue Service (IRS) Schedule M-3. This form is required for corporations with $10 million or more in assets. Among profitable large corporations, on average, 25 percent had no tax liability.“

The Institute on Taxation and Economic Policy got specific, detailing 55 large, profitable corporations that paid no income tax in 2020:

“The companies avoiding income taxes in 2020 represent very different sectors of the U.S. economy:

“Food conglomerate Archer Daniels Midland enjoyed $438 million of U.S. pretax income last year and received a federal tax rebate of $164 million.

“The delivery giant FedEx zeroed out its federal income tax on $1.2 billion of U.S. pretax income in 2020 and received a rebate of $230 million.

“The shoe manufacturer Nike didn’t pay a dime of federal income tax on almost $2.9 billion of U.S. pretax income last year, instead enjoying a $109 million tax rebate.

“The cable TV provider Dish Network paid no federal income taxes on $2.5 billion of U.S. income in 2020.

“The software company Salesforce avoided all federal income taxes on $2.6 billion of U.S. income.” 

Solutions

Four simple steps could go a long way toward funding what we need to do as a nation, from sustainable energy to infrastructure to education to universal health care. Those four steps:

1) Fund the IRS to go after high-income tax cheats.

2) Increase the marginal tax rate for the highest earners. How much? Just for the sake of argument, how about midway between today’s 37 percent and the Eisenhower-era 91 percent? That would set the highest marginal tax bracket at 64 percent. 

3) Remove the cap on Social Security and Medicare taxes so that the wealthiest earners keep on paying these. 

4) Make corporations pay their fair share. 

For more, see

Making Millionaires Pay Their Fair Share: Part I

and

Making Millionaires Pay Their Fair Share: October 2023 Update

High-income tax cheats have stolen billions from the rest of us. The IRS is finally going after them. In the past few months, it has collected $38 million from about 175 high-income tax cheats, and that’s just a start. 

Chasing wealthy tax cheats takes more skill, time, and money than auditing low-income or middle-income taxpayers.  That’s why the Biden administration got more money for the IRS this year, and why the Republicans in Congress are howling about it and demanding that the IRS return to a starvation diet that will keep it from going after the big bucks. 

As a group, high-income earners deliberately hide far more of their income than lower-income earners. One study found that “under-reported income as a fraction of true income rises from about 7% in the bottom 50% of the income distribution to 21% in the top 1%.”  

While I am working on a post, I sometimes schedule it for future publication. Unfortunately, when I save it, WordPress sends out a notice to subscribers that I have published a new post. I have not figured out a way to change that — sorry!

I was four years old when 14-year-old Emmett Till was brutally tortured and lynched. He was just a child, a Chicago boy visiting Mississippi. His cousin, Reverend Wheeler Parker, Jr., was 16. He remembers his cousin, whom they called Bobo. Bobo stuttered a lot, a result of childhood polio, and was a goof-off and a prankster. All these years later, Reverend Parker recalls exactly what happened back then:   

“He loved to have pranks, so he whistled. He gave her the wolf whistle. When he did that, we could have died. Nobody said, ‘Let’s go.’ We just made a beeline for the car.  …

“He was joking. He wanted to make us laugh. When he saw that we didn’t laugh and we were scared, he’s frightened now. And we jumped in the car, and we’re going on this gravel road. And there’s a car coming behind us. Dust is flying everywhere. And someone said, ‘They’re after us, they’re after us.’ And of course, we jumped out of the car and into the cotton field, and the car went on by. …

And a few nights later, white men came for Emmett Till. 

“I heard them talking at 2:30 in the morning. They said: ‘You got two boys here from Chicago.’ And, of course, when I hear this, I’m thinking — I said, man, we’re getting ready to die. I said, these people finna kill us. …

“I’m shaking like a leaf on the tree in the dark of a thousand midnights. It’s so dark, you can’t see your hand before your face. So, when they came in with the gun in one hand and a flashlight in the other, I closed my eyes to be shot. Horrible feeling. Horrible, horrible feeling. …

“Then they aroused him. And I think they told him to put his shoes on, and he wanted to put his socks on. It was just pure hell over there. Emmett had no idea who he was dealing with. He had no idea what was about to happen to him. He had no way of knowing because he didn’t know that way of life. And he left, and that’s the last time we saw him alive.”

I should have learned the story of Emmett Till in my history classes. I never did. Even in the 1960s, as the civil rights movement appeared nightly on the television news, my high school history classes said not one word about Emmett Till, not one word about civil rights, not one word about anything connected to Black people that was more recent than the Civil War. 

That’s a crime. And it’s a crime that Florida Governor Ron DeSantis and other history denialists are trying hard to repeat and perpetuate.

Mamie Till-Mobley, Emmett Till’s mother, knew that the ugly, deadly truth of racism must be uncovered. She insisted on an open casket funeral for her son, saying “Let the people see what I have seen.” 

People saw. The seeing and the telling of the story were fuel for the already-growing fire of the civil rights movement. 

People saw. We still need to see. 

This week, on what would have been Emmett Till’s 82^nd birthday, President Joe Biden and Vice-President Kamala Harris established a national monument to honor and forever remember Emmett Till and Mamie Till-Mobley.  

Reverend Wheeler Parker, Jr., was with them at the dedication, and he said:

“When I sat with my family on the night of terror — when Emmett Till, our beloved Bobo, was taken from us, taken to be tortured and brutally murder — murdered — back then, when I was overwhelmed with terror and fear of certain death in the darkness of a thousand midnights, in a pitch-black house on what some have called Dark Fear Road.  Back then in the darkness, I could never imagine a moment like this: standing in the light of wisdom, grace, and deliverance.“

History denialists don’t want us or our children to hear Emmett Till’s story. They don’t want us to hear Reverend Parker’s voice. We must fight back and insist that this history be taught and told in the full, awful light of day. 

At the dedication, Vice President Kamala Harris told it well: 
 
“The story of Emmett Till and the incredible bravery of Mamie Till-Mobley helped fuel the movement for civil rights in America, and their stories continue to inspire our collective fight for justice. …

“Our history as a nation is born of tragedy and triumph, of struggle and success.  That is who we are.  And as people who love our country, as patriots, we know that we must remember and teach our full history, even when it is painful — especially when it is painful.
 
“Today, there are those in our nation who would prefer to erase or even rewrite the ugly parts of our past; those who attempt to teach that enslaved people benefitted from slavery; those who insult us in an attempt to gaslight us, who try to divide our nation with unnecessary debates.
 
“Let us not be seduced into believing that somehow we will be better if we forget.  We will be better if we remember.  We will be stronger if we remember.
 
“Because we all here know: It is only by understanding and learning from our past that we can continue to work together to build a better future.”

President Biden’s speech at the dedication reiterated that truth:

“We can’t just choose to learn what we want to know.  We have to learn what we should know.  We should know about our country.  We should know everything: the good, the bad, the truth of who we are as a nation.  That’s what great nations do, and we are a great nation.  That’s what they do. 
 
“For only with truth comes healing, justice, repair, and another step forward toward forming a more perfect union.  We got a hell of a long way to go.” 

Yes. We’ve got a hell of a long way to go. 

“Race matters in the lived experience of Americans, even if legal barriers are gone,” wrote Justice Ketanji Brown-Jackson in her eloquent dissent from the Supreme Court decision ordering an end to affirmative action in higher education.

She denounced the Court’s cynical advocacy of “colorblindness.” That colorblindness takes U.S. law back to the days before the 1954 Brown v. Board of Education ruling against school segregation.

This week’s announcement of federal funding to extend broadband internet access to underserved area—especially rural areas—reminded me of Dad and Grandpa’s stories of the REA and the arrival of electricity. 

Back in the 1930s, the lights came on in Henry Turck’s barn for the first time, spooking the milk cows. Electric lights were welcome, but the real improvement was electric milking machines. Dad recalled that his father made a deal with him. Dad would milk the cows, and that would leave Grandpa time for more trapping so he could earn enough money to purchase an electric milking machine. 

The years-long Department of Justice investigation of the Minneapolis Police Department began after the May 25, 2020 murder of George Floyd. That investigation has now concluded with a 92-page report. The report is damning in its entirety, and I encourage everyone to read it in full. The report begins by stating the findings of the DOJ investigation:

“MPD and the City engage in a pattern or practice of conduct that violates the Constitution and federal law. First, MPD uses excessive force, including unjustified deadly force and excessive less-lethal force. Second, MPD unlawfully discriminates against Black and Native American people when enforcing the law. Third, MPD violates individuals’ First Amendment rights. Finally, MPD and the City discriminate when responding to people with behavioral health issues.”

Statement from Manhattan DA Alvin Bragg’s office: “This evening we contacted Mr. Trump’s attorney to coordinate his surrender to the Manhattan D.A.’s Office for arraignment on a Supreme Court indictment, which remains under seal.”

Bragg’s office has been tight-lipped about the investigation and indictment, but plenty of other people are talking, including the biggest mouth on the planet.  

Trump on Truth Social: “These Thugs and Radical Left Monsters have just INDICATED the 45th President of the United States of America …”  

What happens next? Probably not a perp walk or handcuffs. White collar defendants—even if they are not ex-presidents—normally arrange to turn themselves in and are released after processing. 

Of course, Trump could refuse. Then what happens? 

He might be able to hide out in Florida for a while. Florida Governor Ron DeSantis said that, “Florida will not assist in an extradition request.” That seems clearly contrary to the U.S. Constitution, but DeSantis doesn’t care. 

U.S. Constitution: Article IV, Section 2, Clause 2:  A Person charged in any State with Treason, Felony, or other Crime, who shall flee from Justice, and be found in another State, shall on Demand of the executive Authority of the State from which he fled, be delivered up, to be removed to the State having Jurisdiction of the Crime.

{While DeSantis was quick to elbow his way to the head of the parade of Republicans fulminating loudly about the indictment, he and his allies made another move without so much fanfare. They moved to repeal the Florida law that would require him to resign as governor before running for president.) 

The indictment does not charge Trump with:

• having an affair with Stephanie Clifford/Stormy Daniels in 2006 and 2007, or
• paying $130,000 to her in 2016 so she wouldn’t talk about the affair during his presidential campaign, or
• arranging with the National Enquirer to buy exclusive rights to another woman’s story and then never publish it. 

All of the above are indisputably true, but they are not the basis of the criminal charges. 

The criminal charges come because the money used to pay off the two women came from the Trump Organization but was never reported as a campaign contribution. 

Follow the money. Remember Al Capone? He finally went to prison for tax evasion. 

While the indictment has not yet been released, PBS NewsHour summarizes two likely charges: 

“Accounting fraud. According to The New York Times, the charges may include falsifying records, a violation of the New York Penal Law. The idea is that the payments to Clifford were falsely written as something else in the books of the Trump Organization, and Trump knew, “with intent to defraud.” That offense is often a misdemeanor. However, it can be elevated to a felony if the fraud is covering up other, serious criminal activity.

“Campaign finance charges. There could also be charges that the payment was a hidden campaign activity, because it was intended to help Trump as a then-candidate for president.”

Trump’s former lawyer, Michael Cohen, has already pleaded guilty and served time for his part in the cover-up of the campaign contributions. 

I like this tweet from Lady Emily: “You all may find this funny, but this outcome has serious terrifying legal repercussions down the line for the average American in the future who want to use hush money to try and bury a sex scandal so it doesn’t ruin their presidential campaign.”

After creating a “Select Subcommittee on the Weaponization of the Federal Government” to investigate the FBI and Justice Department, McCarthy and his right-wing posse now want to weaponize the House of Representatives to go after Manhattan District Attorney Alvin Bragg. You might think that the House of Representatives has no jurisdiction over a state prosecutor. You would be right, but McCarthy and his vigilante crew don’t care.

Alvin Bragg became Manhattan District Attorney in 2022, after being elected in November 2021. He previously served as a federal prosecutor, an assistant attorney general for the state of New York, and a civil rights attorney. He graduated from Harvard Law School. 

The Trumpist verbal attacks already have inspired death threats against Bragg.

His office has already prosecuted the Trump Organization, resulting in a January 2023 conviction for conspiracy, criminal tax fraud and falsifying business records in a 15-year-long tax fraud scheme and a and $1.6 million in fines. 

Other prosecutions may be coming. Prosecutors in Georgia continue to investigate Trump’s election interference and the Department of Justice continues its investigations of his attempts to overturn the 2020 election and his taking, concealment, and refusal to return classified documents. 

Stay tuned: this one is far from over.  

Scare stories about crime have been a staple of Republican campaign ads for decades. This year is the worst I’ve ever seen. That’s a big part of the reason that fear of crime is rising, even when crime is not. 

In Minnesota, lying Republican ads attack Governor Tim Walz and Attorney General Keith Ellison. Even Fox News, never a Democratic partisan, calls one of the Republican ads a “five-alarm falsehood.” 

Finding facts about crime rates is complicated. The most reliable numbers come from FBI and Bureau of Justice Statistics reports. Even these two sources are incomplete, though they are the best we have. FBI statistics rely on voluntary reporting by local police departments. Complicating matters further, the FBI just changed some of the ways it compiles reports. 

With that caveat, the official numbers and reports are still 100 percent more reliable than political attack ads or “gut feelings” about crime. I’ve been reading and collecting news reports, and this post is a brief summary, with links to articles that I found most informative. 

Georgia celebrated a record first-day early voting turnout of more than 131,000 on October 17. In contrast, armed and masked vigilantes intimidated voters at ballot drop boxes in Arizona. 

Georgia’s turnout represents the best of U.S. democracy. Arizona represents the dark future if election deniers and proponents of the Big Lie win.