One of the clearest-cut ways that wealthy people avoid paying taxes is by routing their money in complicated ways through corporate entities, especially via so-called "sub-S" corporations. By taking a small direct salary and then paying yourself through your S corporation, one can avoid paying both income and payroll taxes. The IRS has been cracking down more on this, but they cannot litigate each individual case, and so the wealthy reap enormous benefits from playing the highly favorable odds.
Consider the “Roadmap for America’s future” released by Paul Ryan, the ranking Republican on the House budget committee, and embraced by Mitt Romney. The CBPP finds that it will explode deficits and raise taxes on the middle/lower class. The hilarious thing is that I grew up always being told that Democrats just run up deficits while Republicans really safeguard the treasury of the Republic...yep, the GOP sure does know economics.
Of course Republicans cannot and will not admit that they just don't want their bankrollers to have to pay a little more in income taxes. So instead they hide behind "small business" and the supply side voodoo that used to be all the rage...in the 80s.
As Steve Benen summarizes:
"Thirty years ago, this raving stupidity had a name: "voodoo economics." More recently, it's come to be known as belief in the "Tax Fairy."Bingo.
Regardless of the name, the notion that tax cuts necessarily pay for themselves is one of the more pernicious lies in the far-right arsenal. It's both gibberish and right-wing propaganda, but it's nevertheless repeated from time to time.
It shouldn't be -- the concept has been debunked repeatedly by those who care about reality. How wrong is the argument? The Bush/Cheney Office of Management and Budget and the Bush/Cheney Council of Economic Advisers rejected the notion that tax cuts can pay for themselves out of hand. Fiorina, in other words, is promising to be even more fiscally irresponsible than the bunch that added $5 trillion to our national debt in eight years.
Even a fired CEO should be able to understand the reality here. The single biggest cause of the current deficit is Bush's tax cuts. They didn't "pay for themselves"; they put us in a devastating hole."
And remember this as the "fiscal cliff" approaches: the Bush tax cuts were fiscally irresponsible giveaways to the wealthy. Republicans do not want them to expire on the rich. Republicans do not want to admit that they explode our deficit and debt. Republicans will consider it a major concession if the Democrats allow them to expire for the rich and will try to use that as leverage to get money out of the hands of poor and old people via Medicaid/Medicare/Social Security cuts. Somehow, some way, people actually vote for these clowns?
But Republicans don't just suffer from a lack of reality with respect to economics. They also suffer seriously when dealing with the factual reality of climate change and evolution.
