Marxist Republicans

May 5 was the 200^th anniversary of the birth of Karl Marx. Although Republicans have universally used the occasion to point out Marx’s bloody legacy, they have failed to realize that they themselves are Marxist when it comes to income taxation.

At the end of section two of Marx’s Communist Manifesto, in addition to calling for the abolition of private property and the centralization of the means of production in the hands of the state, Marx called for “a heavy progressive or graduated income tax.”

From its very beginning, the U.S. tax code has sought to soak “the rich” with “a heavy progressive or graduated income tax.”

The income tax began with a 1 percent tax on taxable income above $3,000 ($4,000 for married couples) followed by a series of surcharges of up to 6 percent applied to higher incomes. The maximum rate of 7 percent was applied to taxable income over $500,000.

The tax rate in the highest tax bracket quickly increased to 67 percent in 1917 and 77 percent in 1918. It reached a whopping 94 percent in 1944 and stayed near or above 90 percent between 1950 and 1963. Although the top rate eventually came down, the progressive nature of the tax system remains to this day—thanks to the Republicans.

According data from the IRS, for tax year 2015 (the latest available), the top 1 percent of taxpayers (in terms of adjusted gross income) paid 39.04 percent of all individual income taxes, the top 5 percent paid 59.58 percent, the top 10 percent paid 70.59 percent, the top 25 percent paid 86.62 percent, and the top 50 percent paid 97.17 percent. This means that the bottom 50 percent only paid 2.83 percent of all individual income taxes.

Talk about a heavy progressive or graduated income tax!

And that is just the individual income tax. Although all Americans pay a 6.2 percent Social Security tax on earnings up to $128,400 and a 1.45 percent Medicare tax on all earnings, “the rich” also pay a 0.9 percent Additional Medicare Tax on income over $200,000 ($250,000 married filing jointly)

To be fair, and so as not to condemn Republicans for past evils, I will just look at the way things will be under the Tax Cuts and Jobs Act that takes effect for tax year 2018.

There are still seven tax brackets. Here are the rates and the corresponding brackets:

Single

10%     $0-$9,525
12%     $9,525-$38,700
22%     $38,700-$82,500
24%     $82,500-$157,500
32%     $157,500-$200,000
35%     $200,000-$500,000
37%     $500,000+

Married filing jointly

10%     $0-$19,050
12%     $19,050-$77,400
22%     $77,400-$165,000
24%     $165,000-$315,000
32%     $315,000-$400,000
35%     $400,000-$600,000
37%     $600,000+

And then there is the Net Investment Income Tax at a rate of 3.8 percent on investment income over $200,000 ($250,000 married filing jointly).

Another way the government targets “the rich” is through the phase-out of tax exemptions, deductions, and credits. This means that their value is reduced as income rises, and in some cases they are disallowed altogether.

The State and Local Tax Deduction is limited to a combined $10,000 for income, sales, and property taxes.

The Earned Income Tax Credit cannot be taken if one’s adjusted gross income exceeds $15,270 (no children), $40,320 (1 child), $45,802 (2 children), or $49,194 (3 or more children). For married filing jointly, the limits are $20,950; $46,010; $51,492; and $54,884.

The threshold for the Child Tax Credit phase-out begins when modified adjusted gross income reaches $200,000 ($400,000 married filing jointly). The income limit is $240,000 ($440,000 married filing jointly).

The threshold for the Retirement Savings Contributions Credit (Saver’s Credit) phase-out begins when adjusted gross income reaches $19,000 ($38,000 married filing jointly). The income limit is $31,500 ($63,000 married filing jointly).

The threshold for the American Opportunity Tax Credit phase-out begins when modified adjusted gross income reaches $80,000 ($160,000 married filing jointly). The income limit is $90,000 ($180,000 for married filing jointly).

The threshold for the Lifetime Learning Credit phase-out begins when modified adjusted gross income reaches $56,000 ($112,000 married filing jointly). The income limit is $66,000 ($132,000 married filing jointly).

The threshold for the Student Loan Interest Deduction phase-out begins when modified adjusted gross income reaches $65,000 ($135,000 married filing jointly). The income limit is $80,000 ($165,000 for married filing jointly).

The threshold for the Tuition and Fees Tax Deduction phase-out begins when modified adjusted gross income reaches $65,000 ($135,000 married filing jointly). The income limit is $80,000 ($160,000 for married filing jointly).

Another thing that makes the tax code so progressive is the presence of refundable tax credits. These allows “taxpayers” to receive a refund of money he never actually paid in. The money is simply taken from real taxpayers and transferred to him.

Forty percent (up to $1,000 per student) of the American Opportunity Tax Credit is refundable.

The new $2,000 Child Tax Credit is refundable up to $1,400,

The maximum amount of the Earned Income Tax Credit is $6,431 with three or more qualifying children, $5,716 with two qualifying children, $3,461 with one qualifying child, and $519 with no qualifying children.

The progressive U.S. income tax system is a vast income redistribution and social engineering scheme.

A specter is haunting America, the specter of Marxism. Thanks Republicans. Thanks for perpetuating “a heavy progressive or graduated income tax.”

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