Free Lunch by David Cay Johnston

I stayed up late last night to finish reading David Cay Johnston‘s eye-opening Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense (and Stick You with the Bill) (click here to read my other entries on this book).

I’ve never considered myself a populist but reading this book made me feel outraged at the rising income inequality in our country and the government’s role in increasing this tragedy.

In Chapter 26, Not Since Hoover, Johnston expands on the income inequality data that was first discussed in Chapter 2, Mr. Reagan’s Question, and finally answers my question about whether those numbers quoted are for individuals or families. The answer, “A single person and a family are each counted as one unit. For simplicity we will treat each unit as having an equal share of the population.”

Having grown up in the 80s, I remember my parent’s admiration for President Reagan and his tax cuts. I didn’t know until now that the top income tax rate was 70% before Reagan’s presidency (today the top tax rate is just 35% and people balk at that).

Shockingly, Johnston’s data shows that for the top 400 “very-highest-income taxpayers” (about 1,200 people), “Under Clinton, their effective tax rate fell by almost eight cents on the dollar; under Bush, it fell only five.” And people always say that it’s just Republicans who give tax cuts!

And about those 400 “very-highest-income taxpayers,” in 2000 each one had an income of at least $88 million with an average of almost $174 million each.

What I really liked was Johnston’s call to action. His proposal to extend the franking privilege (allowing every Congressman to send out all the mail they want for free) to expenses is not one I’d heard before. But it seems like a viable solution to cutting out the influence of lobbyists. Johnston’s proposal is this:

Let each member of Congress spend however much he or she deems necessary to do his or her job. . . .

This would come at a price: No more free trips, no more free meals, and no more gifts. Senator, if you need to inspect the cleanliness of the sink behind the bar at a resort in Tahiti, go right ahead, just give us the receipts with an explanation of the costs. We will collect the receipts from every elected representative monthly and post it all on the Internet in a format that makes for easy analysis.

Every dollar, and every meeting, must be disclosed. And we will pay for it all, subject only to the usual penalties for embezzling, the punishments accorded by the full House or Senate because of their exclusive right to judge the fitness of members, or the decision by voters to oust a spendthrift.

. . .

Let us also pay the real cost of maintaining two households, one back home and one in Washington, as well as going back and forth as often as the lawmaker chooses. Sure the Congresswoman from Hawaii will spend more on travel than the one from Northern Virginia, but people are smart enough to figure that out.

. . .

Reform begins with you.

I can’t say that I’ll go out and get involved in politics. But I’m glad to have read this book and learned about some of the ways that the rich are getting richer with the government’s help at the expense of the average American.

If you want to hear more, click here to visit NPR and listen to Johnston speak about Free Lunch.

I’m looking forward to reading Johnston’s Perfectly Legal: The Covert Campaign to Rig Our Tax System to Benefit the Super Rich – and Cheat Everybody Else!

I hate tax time not because I don’t want to pay taxes but simply because it seems so confusing.

I certainly believe Johnston’s premise that the “Super Rich” benefit from such a complicated tax system and I’m curious to read Johnston’s proposal to fix the broken tax system.

And I may just have to track down a copy of Johnston’s Temples of Chance: How America Inc. Bought Out Murder Inc. to Win Control of the Casino Business, a New Jersey casino industry expose (published in 1992).

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