Journalists From San Francisco

"Congress lets business owners, investors and landlords play by one set of rules, which are filed with opportunities to hide income, fabricate deductions and reduce taxes. Congress requires wage earners to operate under another, much harsher set of rules in which every dollar of income... is reported to the government, and taxes are withheld... to make sure [they] pay in full."

"Members of Congress routinely vote on tax bills that they have never read, much less understood even on a superficial level. Sanford J. Schlesinger... says that "there hasn't been a member of Congress with a comprehensive understanding of the laws since ...""

"Just as there is an underground economy of gardeners and handymen and petty merchants who get paid in cash and pay little or no taxes, there is also an underground economy among the super rich that lets them understate their true income and overstate their tax deductions."

"For... the political donor class, the system is being remade to serve their interests while disguising the changes as benefits for every American."

"[I]n 1997... Congress passed what its sponsors promoted as a tax cut for the middle class... Buried in that law were many tax breaks for the rich... notably a sharp reduction... on long term capital gains, the source of two thirds of the incomes of the top 400. ...For years the IRS found big tax evaders by looking into people whose reported income did not seem sufficient to support their lifestyle... But the 1997 law stopped such inquiries. ...Lee Shepherd ...said the law "should be called the mobsters and drug dealers tax relief act of 1997." ...1997 cuts for the rich were not enough ...Under ...President Bush in 2001 ...their income going to taxes would slip further ..."

"After the Sixteenth Amendment... the federal government... enacted a regime to tax incomes, gifts and estates... with the explicit promise that the basic means of sustaining life would not be taxed. The original tax regime applied only to the economic elite, to... "surplus" incomes. ...[I]ncome from capital was taxed more heavily ...in the belief that it was morally offensive to take more from money earned by the sweat of one's brow ..."

"Inflation, combined with the end of real growth in wages beginning in 1973, created... "bracket creep" that moved people into higher tax brackets even if... real incomes were unchanged."

"[L]ess than a century after its adoption, the tax system is being turned on its head. Since at least 1983 it has become the explicit, but unstated, policy... to let the richest Americans pay a smaller portion of their incomes in taxes and to defer more of their taxes... a stealth tax cut, while collecting more in taxes from... the middle class."

"[F]or the past quarter century, policies adopted in the name of Adam Smith... that supposedly strengthen the invisible hand guiding the market, have weighed down our economy while simultaneously stuffing the pockets of those among the rich and powerful who solicited them or... were just standing in the right place at a lucrative time. This is our story, not of one free lunch, but of the many banquets at which billions and billions of your dollars are being served to the richest among us."

"For the bottom 90 percent of Americans... the vast majority, annual income has been on a long, mostly downhill slide for more than three decades. ...Even with three decades of economic expansion, the vast majority has to get by on about $75 less each week than... a generation earlier..."

"The rich and their lobbyists have taken firm control of the levers of power in Washington and state capitals while remaking the rules in their own interest. They have also imbued private organizations with the power to make rules that few outside the process understand. These same people... [are] the primary source of campaign donations that put politicians in office and keep them there."

"Martin Luther King Jr. said he had a dream that one day his four children would be judged by the content of their character, not by the color of their skin. ...Today we often value people less by their character than by the contents of their wallet. ...The pursuit of ever more financial zeros... has... produced a moral breakdown... twisting our culture and our values in ways that tear at the fabric of our society."

"To the addicted, money is like cocaine: Too much is never enough."

"At the same time that the rules have been rewritten to favor the already rich, new rules have been written that ensure harsh treatment for the poor... Coping with the foul effects of poverty costs us trillions of dollars a year... Poverty wastes minds and spirits, robbing all of us of opportunity. ...It makes us less trusting, less willing to see ourselves as one people..."

"The impulse to increase profits can blind men to risk, especially when those at risk are strangers. Society imposes rules on corporate behavior to protect public safety in the face of baser impulses. These rules require enforcement..."

"In Britain only about 18 people a year die at rail crossings. ...Even taking into account that America has five times as many people... the death rate at crossings is four times that of Britain."

"[R]ailroads are by far the most deadly form of commercial transportation in the country. ...Measure deaths by distance traveled... and trains are 52 times more deadly than trucks. Trains kill 130 people per 100 million miles traveled, compared with 2.5 deaths in big-rig truck accidents and 1.9 deaths in plane crashes."

"The government agencies, without nearly enough money to oversee safety... write superficial reports, and when it comes to accidents at rail crossings, they thoroughly investigate only 4 out of 3,000 cases."

"A lot of people look at the world as they're born into it and assume, like Dr. Pangloss that it must needs be that this is the way that God intended the world to be. It is nowhere written down that we will have our liberties, that we will have the freedoms that we have come to know."

"There is a never-ending struggle against the need for the state to be strong enough to be functional and to have a civilized society, and at the same time, its desire to crush those who stand in the way."

"[O]ne of the great geniuses of our Constitution was the recognition that the liberties of the people depended on a certain set of standards. ' being a crucial one, the ability to speak your mind, the ability to follow or not follow religion as you chose... [W]hen we put these in place, we had this flourishing society. It's not perfect. We've got lots of things wrong in our society. Government has problems... but there is no civilization, there is no liberty, without government."

"[T]o the extent that people have said... "I don't care what the government's doing..." politicians fall under the influence of other people... in our age they have fallen heavily under the influence of their [political] donors. ...We have a government that is increasingly estranged from the needs of the people, and focused on the needs of the moneyed people and large corporations."

"Balzac said 200 years ago that "behind every great fortune lies a crime," but we know how to create wealth now: the Industrial Revolution created wealth, the and our ability to manipulate cyberspace, and to develop concepts and structures in mathematics, and elsewhere. We can create real wealth. So, per say, being wealthy is now not the result of taking from those with less; and yet this historic problem has come roaring back... under the guise of conservatism."

"Conservatism... means we take the things that we know work and we keep... and maintain them. ...[I]f you want to try something new... you're careful... you're cautious... you're skeptical of it. If it turns out it works we'll try incorporating that, but we have a great skepticism about doing that. Well, that's not what we got. We got radical ideas that no one else in the world is doing. ...[T]hese other countries are having fewer problems, and their middle class is better off, because they didn't do these radical things. They were in fact, conservative. Now the things they did, we might view as liberal, but they were conservative in hanging on to those things."

"[A]ssuming that all the... interest on the federal debt is paid, just from the individual income tax, all the income taxes that you pay from January through the end of April, just go to pay interest on the national debt; and since 86% of federal tax revenues come from labor (and 14% from capital); that means that we explicitly have a policy now to tax labor [in order] to transfer [that revenue] to [privately held] capital."

"So we didn't get less government... that we were promised. Next we were told we should have deregulation. There's no such thing as deregulation. Everything has rules. ...What we got were new regulations... written by and the railroads and the banks, and they eliminated [or reduced] consumer protections. They took away enforcement of the existing laws. They benefited this political donor class, who were pursuing their own self-interest."

"has a marketing deal with , and Verizon has joint marketing deals with , Cox and Time Warner. This is not competition but ization. The losers... are the consumers, who will pay higher prices for lower-quality service."

", which did not pay taxes (I broke that story... about 7 or 8 years ago), owned ... and people paid close to $1 billion in their electric rates to cover its taxes. Money that never got to the government... by tax shelters and [through] other devices. When I wrote a story on this on the front page of The New York Times, the wrote a letter... they didn't say this wasn't true. They just said we're doing what the law allows."

"Except for a handful of people, Peter Gosselin at the Los Angeles Times who's done some big series, and a few other reporters here and there, now and then, why is it that this issue of income redistribution and government taking from the many and giving to the few is not being reported widely. You are not reading about it in many, many, many newspapers around the country. I would think it would be one of the major things."

"This practice of borrowing is a practice that in the long run will make us less wealthy. The practice of spending money we don't have inherently, in the long run, has to make you less wealthy, unless you're spending it for things that add value to your society. So if you're borrowing to build... the Erie Canal, the Interstate Highway system, to educate young people so that their productive minds will make more value in the future, you're making an investment in the future. That's not what we're doing with our borrowing. We're... simply spending money we don't have today... transferring enormous amounts of money to big corporations and wealthy individuals."

"The most widely read literature in Western Civilization is Jane Austen and her stories are about these young women... They're looking at these young men... "Oh, Mr. Darcey has 10,000... Mr. So & so has 5,000," and what they're talking about is... the British finance system in the 1700s and 1800s where wealthy people loaned... large amounts to the crown and were paid interest. ...All the crown had to do then was raise enough taxes from the poor and the middle class, to the extent there was one, to pay the interest. ...[W]hat have we been doing since 1980. Ronald Reagan came in saying he wanted a balanced budget. We last had a balanced budget under Richard Nixon. We have seen budget deficits grow enormously over the years to the point where the federal debt, not adjusted to inflation, was just under $1 trillion when Ronald Reagan came into office, and by the time George Bush leaves, it will be $10 trillion. ...Over $400 billion a year is just going to pay interest on the national debt. That means it's money we don't have for higher education, for infrastructure improvements so we don't have have bridges collapse and kill people in Minnesota when they're commuting home from work. So we don't have pinch points that are costing us billions and billions of dollars because we can't efficiently move goods around the country. We don't have it for all sorts of things that would grease the wheels of commerce and make us wealthier."

"As taxpayers we gave one of Warren Buffet's companies, in 2006, an interest-free loan of $665 million dollars, and he only has to pay half of it back 28 years from now. ...Imagine ...you bought a house in 1980 at the price in 1980. Up until now [2009] you haven't made any payments on the house, and this year you have to pay half in the... dollars you agreed to back then, no adjustment for inflation. Do you think that alone might make you a wealthy man?"

"When I became a reporter in the 60s in California, one of the very first lessons I learned was, your supposed to be watchdogging the government.... looking out for the taxpayers. If the politicians want to spend more money, why? What's it for? Why am I going to give up more of my sustenance to the government? If the government needs it, let's hear the case for it. ...[N]ow we have city councils in big cities in the United States where no reporter goes for months at a time to the meetings; where the city budget doesn't get covered at all."

"[T]he rules we've set in our society are redistributing incomes up. Our national myth is that we have this socialism policy that redistributes down. The reality of the data is that we are redistributing up, and... we don't have trickle-down economics... we have Amazon [river] up."

"[O]ne of the fundamental changes that's taken place is more and more coverage of controversies instead of issues."

"I have encountered I don't know how many people who have...written to me... about how we have the strongest economy in history. No we don't, and nobody who knows the numbers would say something like that, but you could easily get that impression... from watching just television news, and listening to the president repeatedly tell us what a strong economy we have, when it's just not true."

"From 1945 to 1980 we had a bipartisan consensus in this country about nurturing and developing the middle class. ...There were plenty of fights back and forth, but both sides of the aisle agreed that government should be building up the majority of the people to create a better, wealthier society. We had the , probably the smartest single thing government's done in modern times. ...We had the built, although it was built at the urging of the Pentagon so that we could move material around if we had to have productivity for a war. We invested in all sorts of things, basic science education, we had 30 year mortgages developed..."

"Mr. Reagan came along and said, "Are you better off? ...Government is the problem," and persuaded people who were faced with problems... We had two oil shocks, '73 and '79, we had long lines at gas stations. There were a few cases where we had shootings of people in line at gas stations. ...We had inflation that was scaring people ..."

"Child poverty [has] increased in this country since 1980, even though we have had divorce rates fall. We have hundreds of thousands of young people who don't go to college because they can't afford it. ...[F]rom tax data, the average income of the bottom half of Americans is $15,000 per tax payer. ...It's right out of the IRS tables. Some people say it's unfair to use that because there's income that isn't counted, like Social Security payments, and it's taxpayers not households, but even if you go to households, the cost of going to state college now is about $10,000... If you go to household income, even at the typical median level, $50,000; how somebody making $50,000, with even two children, can afford $10,000 a year for college for kids is amazing. When you and I were kids college was paid for. It was free to us. Society paid for it because they were investing in the future. Now, we're putting road blocks in the way of the most valuable asset we have. We're subsidizing the owners of baseball teams and football teams, which is lots of fun, but it's trivia, and we're doing it, in part, by cutting money for this."

"We're subsidizing Tyco and through the burglar alarm subsidy... while starving our parks and recreation programs; and what do we get in the big cities because we've starved those programs? Youth gangs! There have always been gangs [but] not like we have today... and it's because of government policy."

"[T]wo income households... Lots and lots of women are out there working at jobs that pay minimum wage or $8 an hour. ...[T]he result of the falling wage structure in this country is that the average family with children does 1,000 hours more paid labor today than it did back in the early '70s. ...That's working essentially half of the year. ...[M]arried women with children have often worked throughout history. A Christmas job, a Saturday job. They had what we used to call pin money, but they were not fundamental bread winners, and there are costs associated with this. We have costs for daycare [etc.]"

"This book is about the many ways that corporations extract from you... extra nickels—which add up to thousands of dollars. Many of the mechanisms require the government's cooperation; some... the result of seemingly disconnected sources; others are hidden in plain site. ...It's in the fine print."

"Since the corporate income tax began in 1909, Congress has imposed a penalty tax, currently 15 percent, on excess cash and near-cash... Without such, a corporation could... become a huge tax shelter, withdrawing resources from the economy instead of investing in new plant...equipment... jobs and paying dividends... But President Reagan signed a law that... so long as the money was owned by offshore subsidiaries, American companies could hold unlimited amounts of cash. ...[C]ompanies now siphon profits out of the United States under the guise of... tax deductible expenses..."

"[E]lectric and gas utilities in more than twenty states have... quietly obtained government approval to make customers pay in advance for new or upgraded facilities. It is as if... everyone has loaned them the money at zero percent interest."

"The telecommunications companies wanted to build the most profitable electronic toll road possible. Their aim was, first, to spend as little as possible on technology, which... meant slow Internet service for many... Second... serve areas where lots of customers... would buy a monthly pass... sparsely populated areas were at best incidental to such plans. Third... set prices as high as the market would bear, even if it meant many... could never afford to access this electronic roadway."

"Lost... was the crucial fact that the federal government had established an underlying policy to make... services available to all at reasonable prices."

"Businesses have gotten policies adopted that have allowed some managers to run corporations as, effectively, criminal enterprises... ... those in control run the fraud."

"[S]tate and local governments alone spend at least $70 billion a year of taxpayer's money to subsidize factories, office buildings [etc.]... $900 per year for a family of four."

"Legislatures passed these laws, presidents and governors signed them and the courts have endorsed them. In many cases they effectively gut state constitutional provisions and laws banning gifts to business."

"[The] only determinant of your economic life in 18th century France was how well you picked your parents. ...The functional equivalent of what would happen if we repealed the occurred, in that all capital and all land (and this was essentially an agrarian society) were tied up. Either the Church or trusts controlled so much that there was no movement..."