Who Pays and How

The wealthy are replacing taxes with loans — and the rest of us are paying the interest.

Robert B. Reich

The American Prospect

Two stark facts have become apparent about how our government now finances itself. The first is about who’s paying taxes. There used to be a graduated system in which the rich paid a much larger proportion than the poor. But that’s changed. None other than the Congressional Budget Office — which, incidentally, works for a Republican Congress and is headed by a former Bush economist — reports that two-thirds of George W. Bush’s tax cuts have gone to the wealthiest 20 percent of American families, and the lion’s share to the top 1 percent.

Now the second fact, equally important: The Treasury Department tells us that the nation’s total debt has soared from 5.7 trillion dollars four years ago to 7.3 trillion dollars today.

Put these two facts together and you’ve got the real story. Wealthy Americans used to add to government revenues mainly through their tax payments. Now, wealthy Americans add to government revenues by lending the government money.

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