PDX alert: author David Cay Johnson appearing Friday night

[grasswire]

If you saw Lou Dobbs Thursday, you saw David Cay Johnson, Pulitzer Prize-winning NYT reporter.

And you can see Johnson Friday night at the First Unitarian Church in Portland.

His book is an explosive new explanation of disproportionate taxation in America -- how the middle class is being stripped of its wealth to support extremist policies. "Perfectly Legal: the Covert Campaign to Rig Our Tax System to Benefit the Super Rich and Cheat Everyone Else."

In just the few minutes I saw him on CNN today, I learned astounding information. Every citizen needs to "get" what he's talking about.

First Unitarian Church, SW 12th & Main, Portland, on Friday, Feb. 27th at 7 pm. Donation suggested.

[grasswire]

1. transcript from today

The transcript from Dobbs' Thursday is up. Here's a snip of it:

DOBBS: This is class warfare stuff in a campaign year like this, as you well know. Let's back it up. What do you mean that the rich are being subsidized by Social Security of all things?

DAVID CAY JOHNSTON, AUTHOR, "PERFECTLY LEGAL": Well, in 1983 Alan Greenspan persuaded the Democrats who were in charge of Congress to overtax us on Social Security, that is to collect taxes in advance rather than on pay as you go system. The promise was that we would use the excess taxes to pay off the federal debt which was then about a trillion dollars. We have now paid 1.8 trillion dollars in excess Social Security taxes. This year the government will collect -- if you make $50,000, about $7,500 from you. It only needs 5,000 to pay current benefits. That other $2,500 wasn't used to pay off the federal debt, which is now 7 trillion dollars, instead it is being used to finance tax cuts for the super rich.

DOBBS: We're putting up a graph right now which goes to the -- to that issue. Precisely what you're talking about. Now, why in the world would FICA be limited at $87,000 of earnings, taxing -- taxation on $87,000? Why not carry that straightforwardly through for everyone at higher levels?

JOHNSTON: Well, it's limited to the 90 percent of wages in the country. And the theory is that that's as high a benefit as the government is going to pay. So your benefit caps out, that's why the tax stops. If we simply had a pay as you go tax and it stopped at that end, Lou, I don't think there would be an issue. Since we were told you have to pay in advance. Of course a tax paid in advance costs you a lot more than when you can defer off into the future. That you are going to pay in advance for the benefits.

And now that money has not been spent to pay off the debt. Now Mr. Greenspan says you are not going to get those benefits but we should not raise taxes on those that make millions of dollars a year. It seems to me what Senator Daniel Patrick Moynihan predicted in 1983 has come true. He said this was thievery and the middle class were going to have their pockets picked by the rich.

DOBBS: Indeed, with that analysis that is what is happening. And the middle class at this point, hardworking men and women in this country are no longer being surprised by some of the pressures, forces that are working against them. What is your best judgment for a solution?

JOHNSTON: Well, in the case of Social Security, if we were to go back to pay as you go, people making $50,000 a year would have $48 a week more in their pocket, particularly if we took it all out of the side paid by the worker. So we cut that in half, and the max instead being dollar for dollar by your employer, it would be two dollars to one dollar. People earning $50,000 would have $48 a week more in their pocket. They could choose whether to save that money or whether to spend that money. But it would be their money and their choice.

DOBBS: I'm sorry, go ahead.

JOHNSTON: It would also mean, however, that the federal government would either be spending vastly more than it is taking in, a couple hundred billion dollars a year. We would either have to deal with that or raise taxes on people who have higher incomes. DOBBS: Let's put the graph up. We have a graphic of this from your book that we want to show you maxing Social Security taxes per person doing exactly what David suggested. This is a remarkable -- to look at the income growth from 1970 to 2000, for the bottom, if you will, 99 percent of this country versus the top 100 -- one percent, is staggering. I follow these trends rather carefully but I had no idea of the discrepancy there.

JOHNSTON: If you chart, Lou, the increase in income for the bottom 99 percent of Americans over that 30-year period, for each dollar that each person got in increased income, and the average was $2,700, less than a hundred dollars a year, you made it one inch high for the top one-one-hundredth of 1 percent, or 27,000 people, it is 625 feet high. 625 feet to one inch.

DOBBS: And the solution is there, the fact that Alan Greenspan, the fed chairman would raise the issue, I think, is commendable. The suggestion in my opinion that the first solution should be sought is to cut the benefits of future retirees is reprehensible. What is your reaction?

JOHNSTON: Well, we can choose in America, if you want, to have a system in which the middle class and the upper middle class, people making $30,000 to $500,000 a year subsidize people who make millions of dollars. And if Americans want to vote for that they should do it.

I just don't think, Lou, that Americans would have gone for this if they had known what is happening. And since it was Mr. Greenspan who said pay your tax in advance and now he says, no, we're not going to give you the benefits, but we can't raise taxes on the rich. That seems to me morally troubling.

DOBBS: Let me ask the question that everyone listening and watching -- listening to and watching you right now wants to know, that $1.7 trillion in extra collections on Social Security, where is their money?

JOHNSTON: We spent it. We spent it on tax cuts for the super rich. In 1993, the 400 highest income people in America paid 30 cents on the dollar in income taxes. By 2000 they were down to paying 22 cents on the dollar. Had the Bush cuts been in effect they would have paid 17 cents on the dollar. Everybody else in America went from 13 cents up to 15. So the super rich in America have more of their money after taxes and everybody else has less.

DOBBS: David, do you ever share with people your political affiliation?

JOHNSTON: Well, as a matter of public record. I'm a registered Republican.