Excellent interview with David Cay Johnston on Democracy Now! today.

I took notes and excerpts on it after I listened, so that I would understand.  The whole thing is totally worth listening to / reading, but here are some of the parts which I thought were important.  (annotated link here:

• "The Worse Off You Are, Your Taxes Increase": Journalist David Cay Johnston Slams Obama-GOP Tax Deal
  http://www.democracynow.org/2010/12/14/the_worse_off_you_are_your

  • The bottom roughly 45 million families in America or households in America—and there are a little over 100 million households—they’regoing to actually see their taxes go up. And that’s because President Obama’s Making Work Pay credit—$400 per person, $200 for a couple, and you got it even if you were retired or disabled—is going to go away. And it’s going to be replaced by this temporary two percent reduction in the payroll tax, the Social Security tax. Well, for about 45 million households who make less than $20,000 a year, this is a tax increase of $150 to $200 each. So, it certainly seems to me it’s reasonable going forward, given how the Republicans have emphasized they will never raise taxes on anyone and they are the party of tax cuts, that theRepublicans have now become the party of tax increases on the poor.
  • if you’re a two-income couple and you make a little over $100,000 each, so you pay the most Social Security tax, you didn’t get Obama’s Making Work Pay credit. You were regarded as too well off. But that Social Security payroll tax decrease is going to mean about a $4,200 tax cut for you. So, clearly, we could see the scheme of this is: the better off you are, the more help you get from the government; the worse off you are, your taxes go up.
  • And there is an important issue to the plutocrats at the very top of the Republican Party who have been financing a lot of these policies through the people they donate to and put in office, and that’s the estate tax. If nothing was done, the estate tax was going to go back to a $1 million exemption and a 55 percent rate. That’s far more troubling to you if you’re a billionaire or a centimillionaire than a marginal change in your tax rate.
  • If he had adjusted the increase—the area where taxes would go up on income to $1 million from a quarter of a million, that wouldn’t have been a big deal. And by the way, a very important point the news media keeps missing: that $250,000 was not income; it was taxable income, which is much smaller than total income.
  • as the great conservative commentator Edmund Burke wrote in 1793, the revenue of the state is the state. Taxes are the system by which we distribute the burden of being able to live in a free society.
  • What matters is what you spend the taxes on. I have shown that you can raise taxes and actually have more money in your pocket, if the government can buy something for you more efficiently.
  • If you want to get rid of the deficit and have a balanced budget, the number one way to do that is universal healthcare, that gets the business of healthcare off the backs of small business owners, so they’re not diverted from running their businesses, and brings down costs. The Republicans are insistent that healthcare should be a profit-making business, not a public service.
  • Shelf Project, done by a number of professors who have dug into the tax code very deeply, and they’ve shown that without raising rates, government could bring in a trillion dollars a year—that’s as much as the income tax brought in in 2008—a trillion dollars, by simply taking away loopholes for corporations.
  • this is a tax increase on the bottom roughly 45 million households in America, close to 150 million people
  • the more money you make, the bigger your tax cut under the Republican plan.
  • the estate tax reductions to 35 percent and a $5 million, or for a married couple $10 million, exemption involve money, in many cases, that has never been taxed. When very wealthy people die, the reason they’re wealthy is they’ve reported, legally, less income than they made on an economic basis, so they have lots of money that was never taxed. And now it will never be taxed, up to $5 or $10 million, because of these changes.
  • of everybody who had a job in 2008, one in 34 went all of 2009 without earning a dollar. The median wage in 2009 was smaller than it was in the year 2000, and the average wage, compared to 2000, was only up less than one percent. And that’s only because of the growth at the top, all of the people who are making six-, seven-, eight-, nine-figure salaries from their work. And remember, people like hedge fund managers aren’t counted in that, because they get to live tax-free currently under our law.You can make a billion dollars a year as a hedge fund manager and legally pay no income taxes, thanks to Congress.
  • What you have is a small segment of people—the Koch brothers, the Mars family, the family that owns Coors Beer or used to own Coors Beer, that group of people—who have been funding their ideological belief. And basically, they want the benefits of being in America without sharing the burdens and without following the ancient conservative principle, 2,500 years old—and remember that most of them who oppose these policies say they’re conservatives—that the greater the gain you manage to achieve, the greater the share of your income you should pay so that your society will continue.

  • AMY GOODMAN: Finally, David Cay Johnston, can you talk about the significance of the long-term capital gains and dividend tax rates being—remaining at 15 percent next year?

    DAVID CAY JOHNSTON: Well, in theory, the theory is that these low rates encourage investment. The problem is two things. One, a great deal of this investment is going overseas, because you can hire people in China for a week for what they would cost you in America for an hour, which is driving down the wages of Americans in many occupations, not just those that are going overseas. But secondly—and here’s the problem that’s getting no public debate, Amy—if you lower the tax rate and allow people to withdraw capital from their businesses through dividends to 15 percent, there are a lot of people who are going to say, "Hmm, it would be nice to have a third mansion or a second jet"—if they’re further up the feeding chain—"or a $100 million oil painting." And when you withdraw from the business, you’re destroying jobs. We used to have high taxes on business, and businesses complained about it, but the business owners were forced by that to reinvest in the business and create jobs. Low taxes encourage withdrawal from business, which means destroying jobs and putting money into unproductive uses, like buying nice art to hang in your home.

http://brinesalt.posterous.com/excellent-interview-with-david-cay-johnston-o