Yes, you are getting screwed

Last year, [Investigative reporter David Cay] Johnston published the fruits of all [his] prize-winning reporting in his book Perfectly Legal: The Covert Campaign to Rig Our Tax System to Benefit the Super Rich--and Cheat Everybody Else. A bestseller and the winner of a 2004 Investigative Reporters and Editors award, the book documents how, over the last three decades, the tax system has been twisted to subsidize the wealthiest 1 percent of the country. Johnston recently talked to City Pages about the book, the damage this reverse Robin Hood scheme is doing to the other 99 percent of Americans, and about the perils posed to democracy by the growing inequalities of the system.

[...]

"President Bush wanted a $1.8 trillion tax cut. Congress would only give him $1.3. How do you fit $1.8 trillion into a $1.3 trillion bag? You do it by a stealth tax increase on the middle class and the upper middle class. By integrating into the regular income tax a parallel universe of taxes called the Alternative Minimum tax. Which appears as only a single line on your tax return. You’d have to look on your tax form to see whether it’s line 42 or 43, but if a figure appears in that line, it means that part of your Bush tax cuts is being taken away so that the richest people in America can get 100 percent of their Bush tax cuts. If you are married, have two or more children and make $75,000-$100,000 you are almost certainly losing part of your Bush tax cuts. Overall that group will lose 42 percent of their tax cuts to the stealth tax.

But worse, under the Alternative Minimum tax if you, your spouse or your child gets a serious illness like cancer and you have medical bills that are more than 7.5 percent of your income, Congress raises your taxes, through this stealth tax, and explicitly uses that money to finance the tax cuts for the super rich. So it is the tax policy of the United States to tax sick middle class people so that rich people can pay less.

More than 100 members of Congress since I exposed this have denounced it, but nobody’s fixed it, and President Bush’s spokesman has said that that is what he was elected to do."

[...]

"I argue at the very end of the book that in the long run, the super-rich, top one-hundredth of one percent, will be poorer if everybody else is. Because the value of your assets is going to be less if the society around you is not healthy and is not able to buy your products. Just look at the amount of money we’re spending on security in all different forms, not just federal spending, but police departments, building security, etc. that’s dead weight. It’s a kind of tax on the economy. And in a healthier society you would have a lot less crime, a lot less money spent on security, and you’d be a lot better off."

If you want proof that in the long run everyone is worse off, visit Caracas, Venezuela. And probably any other major city in a country where there are the elite ultra-wealthy, and the very poor masses. The wealthy live in heavily gated communities at the highest points in the city (presumably the air is clearer up there) surrounded by polluted air, disease and trash-blown streets. I've been told they really don't spend much time at home - they favor European vacationing. It's not hard to see why. So I'm guessing that's the attitude America's ultra-wealthy take. After all, they can afford to go somewhere clean, with less crime.

"In ancient Athens there was a flat tax, and when the Athenians had a flat tax, Athens was a tyranny. That’s where we get the word from. When the moral philosophers of Athens reasoned that those people who got the greatest economic benefit from living in Athens had the moral obligation to bear the greatest burden of maintaining the society that made them rich. That is, when they invented taxation based on ability to pay, they also invented democracy."

Interview here.