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News :: Miscellaneous |
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Here’s a Capital Idea: Make the Rich Pay Taxes! |
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by Nicholas von Hoffman
(No verified email address) |
26 Mar 2001
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This is a great opinion piece that you are unlikely to see in the local dominant media.
Onward with the class struggle.
Commandante Lucas |
Class warfare? Every time the D’s timorously burble their little demurrals on the subject of the R’s pro-millionaire tax scheme, the Republicans answer with the shout, \"Class warfare!\" They should live so long. Class warfare is chaps like those Dayak fellows in Borneo coming at you with machetes, aiming at knee and gonad. Instead, what we’ve got here is overly genteel discussion with a marked absence of the kind of rage that is described as righteous and a bit frightening. In contemporary, money-soaked Washington, that’s a little too much to ask.
The Republicans yell \"class warfare!\" whenever the subject of tax justice is raised because the phrase is meant to remind us of Marxism—and therefore something beyond the pale of civilized thought. The term \"class warfare\" is used only to intimidate Democrats, who are already so intimidated that they use the label \"progressive\" to describe themselves, lest they be called liberals. Well, the opposite of \"liberal\" is \"reactionary,\" which is what the Bush tax schemes are.
Really, here we have Paul O’Neill, the Secretary of the Treasury, who earned $56.4
million last year as the main man at Alcoa and got away with paying no payroll tax—not a dime’s worth—on over 55 million bucks’ worth of his compensation. So while Mr. O’Neill pays no tax on 99 percent of his income, virtually all the rest of us pay a payroll tax on 100 percent of what we make. And this creep is now popping up in front of Congressional committees saying he wants his income tax cut. Oy!
President Bush has reached into his pack of reactionary dogmatics and proclaimed that
nobody should pay more than 33 percent of their income in taxes, a statement greeted with unalloyed joy by the plutocratic class (and thank you, Dr. Marx). Why this number and not some other is never explained—but when you’re dealing with dogmatics, it doesn’t have to be.
The Democrats, when they can tear themselves away from taking subventions from the
same people who support the Republicans, say that isn’t fair. \"Fair\" and \"unfair\" have
become the wimp words of modern, mousy liberalism. In a debate over taxing wealth and
income, \"fair\" and \"unfair\" aren’t going to get you very far, particularly when the Republicans can say, quite correctly, that poor people in modern American have color TV, air conditioning, telephones and plenty of the plastic whatnots of our time.
This debate cannot be won along those lines. The question is plutocracy: Shall the rich
rule? Shall we have a lopsided society à la that of the last century of the Roman Republic, in which a few unimaginably rich families used their wealth to manipulate the vast plebeian mob until the whole rotten scaffolding fell down, to be replaced by an hereditary monarchy? The question is, how great an imbalance in the possession of power, as represented by money, can a democratic society take? We are approaching a point where the plutocrats have in effect been able to buy 100,000 or a million votes while you and I cast our one.
Look at New Jersey and the election of Jon Corzine last autumn. Here is the example of a plutocrat whose accomplishments prior to buying a Senate seat were essentially those of a
bucket-shop operator. A sensible tax system—one that supports the continued existence of democracy—would have deprived this gold-plated nonentity of the power to seize a high office in the Republic as he did. That he ran as a Democrat is symptomatic of how difficult it is to maintain a plausible democracy when the edifice is overrun by rich rodents. You have got to use the tax collector as the rat catcher.
It is a strange thing, but the Democrats, stumbling around in the thickets of identity politics, have made things more difficult for themselves. They’ve done so by twisting and distorting the word \"democratic.\" Too often in common debate and daily journalism, \"democratic\" or \"undemocratic\" doesn’t refer to our system of governance but to special group pleading. \"Undemocratic\" has come close to meaning \"not good for the black people\" (or the Hispanic people, or the homosexual people). \"Undemocratic\" falls on the ear as a synonym for \"unfair\" or—God save us!—\"insensitive.\" Unless we take care, \"democratic\" may take its place on the list of whiny, wimpy, self-centered, selfish, self-absorbed P.C. words that sound like fingernails on a blackboard to sensible people.
Get this debate back where it ought to be by asking the important questions, such as how
long can our democracy maintain itself if 2 percent of the population own or control 60 or 70 percent of the society’s disposable wealth? Anyone looking at the struggle over campaign contributions has reason to be worried about our political future. The plutocracy’s influence on the national legislature and the Supreme Court is so large and obvious that the odds for the passage of an effective, as opposed to a nominal, campaign-finance law in this session of Congress or any other are between slim and none. The odds of a truly democratic (or, if you will, a class-warfare) tax bill are about the same. Nevertheless, let’s ask ourselves if one way to clear up the corruption of the democratic process isn’t to take away a significant clump of the corrupters’ dough-re-mi.
The plutocratic answer to this argument is that, quite to the contrary, the rich should get
more money when taxes are cut because the non-rich will simply spend their money on
unproductive things like paying down credit-card debt or buying food. The rich don’t have any credit-card debt, and they have already destroyed vast sections of Long Island with their ugly mansions, so they are in a position to put their capital to socially valuable use.
The Democrats denounce this reasoning as \"trickle-down\" economics. Well, a case can be made that sometimes the trickle-down drops do indeed fall on the noses of the vast, toiling white-collar masses. Cleared of its hot air, this is an argument about what kind of tax legislation gives the economy the cattle-prod shock to send it into a condition of prosperity. Judging from the past, you really can’t tell if the cattle prod works or not. The Kennedy tax cut—often used as an example by the plutocratic apologists—was followed by a happy upsurge in business. The Reagan tax cut was followed by some years of high
unemployment and what passes, in our era at least, for hard times. Go further back in the
20th century and you get ambiguous answers. The Harding-Mellon tax cut was quickly
followed by a great burst of prosperity, one that lasted nearly 10 years. The Franklin
Roosevelt–New Deal cuts were not followed by much: The unemployment lines, soup
kitchens and Hoovervilles remained part of the American landscape. Low taxes and low
interest rates had no discernible effect on ending the Great Depression.
There are no single steps that automatically perpetuate prosperity or extract us from
recessions; there are no one-to-one relationships like that. What works one time may work a second time and fail a third. Thus, basing a tax cut or tax increase purely on what its advocates promise for the economy in the next six months is fool’s gold.
It is argued by the hired mouths of the plutocracy, their economics professors and the
denizens of their think tanks that the rich should go untaxed because they—not having to
spend all their money on groceries or paying off plastic—will invest their surplus in
technology and enterprise, which pays off for one and all. Sounds good. And to give the
rascals their fair measure of credit, sometimes it does pay off.
But sometimes the rich don’t invest, or they don’t do it well. It isn’t true that just because
you’re rich, you’re smart. The plutocratic class can be assigned no small part in the
destruction of billions of dollars in the stupidity of the dot-com disaster. All plutocrats aren’t equally good at plutocrating. A Warren Buffett is, but what have the venture capitalists who must answer for the squandering of untold sums of money on Priceline or the Iridium idiocy done to increase material well-being?
No doubt about it, some of the big rich do make sound investment decisions, thereby
helping themselves and the general good, but a helluva lot don’t—and the track record these past few years isn’t so impressive that these people, as a class, deserve yet more than they presently have to invest via a tax cut. These people weren’t the only source of
investment money. To hear them talk about it, you’d think they were alone out somewhere in dangerland doing the pioneer investing that gave us the technological basis for the huge jumps in productivity we’ve enjoyed for the last decade or so.
Yes, some did, but so did the taxpayers. For 200 years, a major source—perhaps the
largest single source—of research-and-development money has been the federal
government. From the development of machine tools and the telegraph to the newest work on the genome, taxpayer money was put up when private venture capitalists wouldn’t or couldn’t. The Internet, which has so captivated and transfixed American business, was developed with taxpayer money. Say what you want about a Brave New e-World, Uncle Samuel paid for the birthing.
So it isn’t true that billionaires are the only ones smart enough to invest productively. Let’s continue to have a mixed system of investment; it has worked well enough since Alexander Hamilton’s time. We don’t have to choose between prosperity and democracy. Class warfare be damned, make the rich people pay their taxes.
Copyright © 2001 The New York Observer
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