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How the American Tax System Favors the Rich and Punishes Working People

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Tax season is approaching in the United States, bringing with it a laundry list of headaches and anxieties. What is in theory a system designed to collect and fairly distribute the gains of society in the interest of public welfare is instead a puzzling and irritating chore, the benefits of which workers are rarely granted. A process which in other countries is highly streamlined, with many sending their citizens a clearly-worded and straightforward bill, has over time been further and further complicated and obscured by legislators in the pockets of corporate lobbyists in the U.S. One such corporate interest in particular is Intuit, the provider of a service many of us will find ourselves dealing with in the coming month – TurboTax. In an effort to make their product not just relevant but often essential to those in need of a shortcut when calculating and filing taxes, TurboTax has spent decades and untold millions of dollars strong-arming legislators to maintain their stranglehold on the tax filing system. Those who wish to eschew the practically ubiquitous software will instead be forced to navigate an increasingly opaque and convoluted maze of ever-changing tax codes and regulations.

Money for War and Wall Street

And to what end? What does the general public actually gain from this system? Ultimately, your tax dollars are not used to sufficiently fund public education, transportation, or healthcare; a vastly disproportionate share of your generous donation to the United States government is funneled into police budgets, the war in Ukraine (not to mention the countless other military campaigns being waged every day around the globe), and bailouts for venture capitalists like the ones who ran Silicon Valley Bank into the ground. The public school system, a system reliant on property taxes, is completely broken. The barebones public transportation system, already a pathetically underfunded service which pales in comparison to the robust transit networks of other countries, is critically over-reliant on revenue rather than public funding, leading to massive fare hikes. Social safety nets like Medicare and Social Security are insufficient and lackluster, not to mention constantly on the chopping block whenever government spending programs are being discussed. Under this system, a system which devalues human life and the right to a dignified existence, these problems of structural deprivation are, rather than being properly addressed, used as a means of justifying further privatization.

For what programs are funded — the military, the police, finance capital — who is footing the bill? When the time comes for the Internal Revenue Service to conduct audits, they overwhelmingly target working people, with an increasing focus on lower-income families. In the eyes of the IRS, these families are significantly easier to torment, lacking the resources to navigate the bureaucratic maze of tax filing, to combat unfair claims of tax fraud or, in some cases, to pay what they supposedly owe at all. Decades of tax cuts on the wealthy have sharply deepened the crisis of wealth inequality in this country, making this problem worse with every passing tax season. As Bernie Sanders regularly and correctly identified during his presidential campaigns, there was a time when the top income tax rate went as high as 90%. Today, the highest earners in society pay a mere fraction of what was once a matter of common sense.

Make the Rich Pay Their Fair Share!

Of course, not everyone is having every last cent wrung out of them. Whereas Americans in lower tax brackets are highly susceptible to having their lives thrown into chaos by aggressive IRS audits, the super-rich are essentially untouchable by a government agency which received a boost of $80 billion last year. Low-income workers are basically defenseless when it comes to being targeted by the IRS, but billionaires and megacorporations find themselves armed to the teeth with dedicated armies of accountants and tax lawyers on the hunt for every conceivable loophole to dodge paying their fair share. By exploiting offshore accounts and lobbying heavily with corrupt establishment politicians who force through tax cuts and kneecap the IRS’ capacity to prosecute them, these capitalist interests have successfully immunized themselves from the consequences of their ruthless pursuit of wealth aggregation. Whatever limited regulatory power the IRS may once have been able to levy against the capitalist class has long since been stripped down and converted into a weapon at their disposal, diverting efforts to limit their own greed into campaigns of economic warfare against the working class.

Fighting for an Overhaul

It goes without saying that a system like this is in desperate need of a complete overhaul. Democrats, even moderates like President Biden, have made gestures that point in the direction of reforming the tax system, but even if they could make such a change, they wouldn’t dare. What workers really need to successfully turn the odds in their favor is a coordinated, mass movement to enact a massive tax on the rich and corporations. We can use the model of the highly successful Tax Amazon campaign, which mobilized workers to establish one of the most effective taxation efforts in the country against one of the largest corporations in the world. Not only did Tax Amazon succeed in forcing Amazon to comply with tax laws and pay what they truly owe, but the movement demanded an actual say in how the tax dollars were spent. Ultimately, the Tax Amazon campaign successfully allocated hundreds of millions of dollars, all collected from large corporations rather than average working people, for the construction of affordable housing in compliance with Green New Deal standards, creating tens of thousands of green union jobs in the process.

It is worth noting that progressive taxation of this sort is a far cry from a socialist transformation of society. This country’s wealth is not collectively owned, and using the state to extract and appropriate the wealth of a small number of extraordinarily wealthy individuals and groups does not even remotely resemble the end goals of any serious socialist movement. That said, imposing a serious tax on the rich and on corporations is not a fruitless endeavor, both out of an immediate need to protect the interests of the working class, and as a critical step toward winning a society that is earnestly run by the working class.

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