Tag Archives: Great Society

SYNDICATED COLUMN: Want More Wars? Raise Taxes on the Rich

Tax Fairness Won’t Reduce Inequality

Reacting to and attempting to co-opt the Occupy Wall Street movement, President Obama used his 2012 State of the Union address to discuss what he now calls “the defining issue of our time”—the growing gap between rich and poor.

“We can either settle for a country where a shrinking number of people do really well, while a growing number of Americans barely get by,” Obama said. “Or we can restore an economy where everyone gets a fair shot, everyone does their fair share, and everyone plays by the same set of rules.”

No doubt, the long-term trend toward income inequality is a major flaw of the capitalist system. From 1980 to 2005 more than 80 percent in the gain in Americans’ incomes went to the top one percent. This staggering disparity between the haves and have-nots has created a permanent underclass of underemployed, undereducated and alienated people who often turn to crime for survival and social status. Aggregation of wealth into fewer hands has shrunk the size of the U.S. market for consumer goods, prolonging and deepening the depression.

How can we make the system fairer?

Liberals are calling for a more progressive income tax: i.e., raise taxes on the rich. Obama says he’d like to slap a minimum federal income tax of 30 percent on individuals earning more than $1 million a year.

Soaking the rich would obviously be fair. GOP frontrunner/corporate layoff sleazebag Mitt Romney earned $59,500 a day in 2010—and paid half the effective tax rate (13.9 percent) of that paid by a family of four earning $59,500 a year.

Fair, sure. But would it work? Would increasing taxes on the wealthy do much to close the gap between rich and poor—to level the economic playing field?

Probably not.

From FDR through Jimmy Carter it was an article of faith among liberals that higher taxes on the rich would result in lower taxes on the poor and working class. This was because the Republican Party consistently pushed for a balanced budget. Tax income was tied to expenditures, which were more or less fixed—and thus a zero-sum game.

That period from 1933 to 1980 was also the era of the New Deal, Fair Deal and Great Society social and anti-poverty programs, such as Social Security, the G.I. Bill, college grants and welfare. These government handouts helped mitigate hard times, gave life-changing educational opportunities that allowed class mobility, closing the gap between despair and hope for tens of millions of Americans. As the list of social programs grew, so did the tax rate—mostly on the rich. The practical effect was to redistribute income from top to bottom.

Democrats think it still works that way. It doesn’t.

The political landscape has shifted dramatically under Reagan, Clinton and the two Bushes. Budget cuts slashed spending on student financial aid, food stamps, Medicaid, school lunch programs, veterans hospitals, aid to single mothers. The social safety net is shredded. Most federal tax dollars flow directly into the Pentagon and defense contractors such as Halliburton.

As the economy continues to tank, there’s only one category to cut: social programs. “Eugene Steuerle worked on tax and budget issues in the Reagan Treasury Department and is now with the Urban Institute,” NPR reported a year ago. “He says one reason no one talks about preserving the social safety net today is that lawmakers have given themselves little choice but to cut it. They’ve taken taxes and entitlements, such as Social Security and Medicare, off the budget-cutting table, so there’s not much left.”

Meanwhile, effective tax rates on the wealthy have been greatly reduced. Which isn’t fair—but not in the way you might think.

Taxes on middle-class families are at their lowest level in 50 years, according to the Center on Budget and Policy Priorities, a liberal thinktank.

What’s going on?

On the revenue side of the budget equation, the poor and middle-class have received tiny tax cuts. The rich and super rich have gotten huge tax cuts. Everyone is paying less.

On the expense side, social programs have been pretty much destroyed. If you grow up poor there’s no way to attend college without going into debt. If you lose your job you’ll get 99 weeks of tiny, taxable (thanks to Reagan) unemployment checks before burning through your savings and winding up on the street.

Military spending, on the other hand, has soared, accounting for 54 percent of federal spending.

In short, we’re running up massive deficits in order to finance wars in Afghanistan, Iraq, and so on, and so rich job-killers can pay the lowest tax rates in the developed world.

I’m all for higher taxes on the rich. I’m for abolishing the right to be wealthy.

But liberals who think progressive taxation will mitigate or reverse income inequality are trapped in the 1960s, fighting the last (budget) war in a reality that no longer exists. The U.S. government’s top priority is invading Muslim countries and bombing their citizens. Without big social programs, invading Muslim countries and bombing their citizens is exactly where every extra taxdollar collected from the likes of Mitt Romney would go.

The only way progressive taxation can address income inequality is if higher taxes on the rich are coupled with an array of new anti-poverty and other social programs designed to put money and new job skills directly into the pockets of the 99 percent of Americans who have seen no improvement in their lives since 1980.

You have to rebuild the safety net. Otherwise higher taxes will swirl down the Pentagon’s $800 toilets.

If you’re serious about inequality, income redistribution through the tax system is only a start. Whether through stronger unions or worker advocacy through federal agencies, government must require higher minimum wages. It should set a maximum wage, too. A nation that allows its richest citizen to earn ten times more than its poorest would still be horribly unfair—yet it would be a big improvement over today. Shipping jobs overseas must be banned. Most free trade agreements should be torn up. Companies must no longer be allowed to layoff employees before eliminating salaries and benefits for their top-paid managers—CEOs, etc.

And a layoff should mean just that—a layoff. First fired should be first rehired—at equal or greater pay—if and when business improves.

Once a battery of spending programs targeted to the 99 percent is in place—permanent unemployment benefits, subsidized public housing, full college grants, etc.—the tax code ought to be radically revamped. For example, nothing gives the lie to the myth of America as a land of equal opportunity than inheritance. Aristocratic societies pass wealth and status from generation to generation. In a democracy, no one has the right to be born into wealth.

Because everyone deserves an equal chance, the national inheritance tax should be 100 percent. While we’re at it, why should people who inherited wealth but have low incomes get off scot-free? Slap the bastards with a European-style tax on wealth as well as the appearance of wealth.

Now you’re probably laughing. Even Obama’s lame call for taxing the rich—so the U.S. can buy more drone planes—stands no chance of passing the Republican Congress. They’re empty words meant for election-year consumption. Taking income inequality seriously? That’s so off the table it isn’t even funny.

Which is why we shouldn’t be looking to corporate machine politicians like Obama for answers.

(Ted Rall is the author of “The Anti-American Manifesto.” His website is tedrall.com.)

COPYRIGHT 2012 TED RALL

SYNDICATED COLUMN: Quit Whining About Student Loans

Time for #OWS to Broaden Its Appeal

It has been 30 days since Occupy Wall Street began. The movement hasn’t shaken the world à la John Reed—not yet—but at one thousand occupations and counting, it can’t be ignored.

OWS has become so impressive, so fast, that it’s easy to forget its half-assed origin. No matter. The fact that the French Revolution was partly set off by the drunken ravings of the Marquis de Sade hardly reduces its importance.

Soon the Occupiers will have to face down a number of practical challenges. Like weather. Winter is coming. Unless they move indoors, campers at Occupy Minneapolis and Occupy Chicago will suffer attrition. But indoor space is private property. So confrontation with the police seems inevitable.

As I saw at STM/Occupy DC, there is an ideological split between revolutionaries and reformists. Typical of the reformists: This week OWSers urged sympathizers to close their accounts with big banks like Citibank and Bank of America and move their savings to credit unions and local savings and loans. If revolutionaries get their way, there will be no banks. Or one, owned by the people.

There is no immediate rush, nor should there be, to issue demands. The horizontal democracy format of the Occupy movement’s General Assemblies is less about getting things done than giving voices to the voiceless. For most citizens, who have been shut out of politics by the fake two-party democracy and the corporate media, simply talking and being heard is an act of liberation. At some point down the road, however, the movement will come to a big ideological fork: do they try to fix the system? Or tear it down?

The Occupiers don’t have to choose between reformism and revolution right away—but they can’t wait too long. You can’t make coherent demands until you can frame them into a consistent narrative. What you ultimately want determines what you ask for in the time being—and how you ask for it.

Trotsky argued for the issuance of “transitional demands” in order to expose the uncompromising, unjust and oppressive nature of the regime. Once again, an “epoch of progressive capitalism” (reformism, the New Deal, Great Society, etc.) has ended in the United States and the West. Thus “every serious demand of the proletariat” de facto goes further than what the capitalist class and its bourgeois state can concede. Transitional demands would be a logical starting point for an Occupy movement with a long-term revolutionary strategy.

Both routes entail risk. If the Occupiers choose the bold path of revolution, they will alienate moderates and liberals. The state will become more repressive.

On the other hand, reformism is naïve. The system is plainly broken beyond repair. Trying to push for legislation and working with establishment progressives will inevitably lead to cooption, absorption by big-money Democrats and their liberal allies, and irrelevance. (Just like what happened to the Tea Party, a populist movement subsumed into the GOP.)

Revolution means violence in the streets. Reform means failure, and the continued, slow-grinding violence by the corporate state: poverty, repression, injustice.

At this point, job one for the movement is to grow.

I don’t mean more Facebook pages or adding more cities. The day-to-day occupations on the ground need to get bigger, fast. The bigger the occupations, the harder they will be for the police to dislodge with violent tactics.

More than 42 percent of Americans do not work. Not even part-time. Tens of millions of people, with free time and nothing better to do, are watching the news about the Occupy movement. They aren’t yet participating. The Occupiers must convince many of these non-participants to join them.

Why aren’t more unemployed, underemployed, uninsured and generally screwed-over Americans joining the Occupy movement? The Los Angeles Times quoted Jeff Yeargain, who watched “with apparent contempt” 500 members of Occupy Orange County marching in Irvine. “They just want something for nothing,” Yeargain said.

I’m not surprised some people feel that way. Americans have a strong independent streak. We value self-reliance.

Still, there is something the protesters can and must do. They should make it clear that they aren’t just fighting for themselves. That they are fighting for EVERYONE in “the 99 percent” who aren’t represented by the two major parties and their compliant media.

OWSers must broaden their appeal.

Many of the Occupiers are in their 20s. The media often quotes them complaining about their student loans. They’re right to be angry. Young people were told they couldn’t get a job without a college degree; they were told they couldn’t get a degree without going into debt. Now there are no jobs, yet they still have to pay. They can’t even get out of them by declaring bankruptcy. They were lied to.

But it’s not about them. It’s about us.

The big point is: Education is a basic right.

Here is an example of how OWSers could broaden their appeal on one issue. Rather than complain about their own student loans, they ought to demand that everyone who ever took out and repaid a student loan get a rebate. Because it’s not just Gen Y who got hosed by America’s for-profit system of higher education. So did Gen X and the Boomers.

No one will support a movement of the selfish and self-interested.

The Freedom Riders won nobility points because they were white people willing to risk murder to fight for black people. Occupiers: stop whining about the fact that you can’t find a job. Fight for everyone’s right to earn a living.

The Occupy movement will expand when it appeals to tens of millions of ordinary people sitting in homes for which they can’t pay the rent or the mortgage. People with no jobs. Occupy needs those men and women to look at the Occupiers on TV and think to themselves: “They’re fighting for ME. Unless I join them, they might fail.”

The most pressing issues for most Americans are (the lack of) jobs, the (crappy) economy and growing income inequality. The foreclosure and eviction crisis is also huge. OWS has addressed these issues. But OWS has not yet made the case to the folks watching on TV that they’re focused like a laser.

It takes time to create jobs. But the jobless need help now. The Occupy movement should demand immediate government payments to the un- and underemployed. All foreclosures are immoral; all of them ruin neighborhoods. The Occupy movement should demand that everyone—not just victims of illegal foreclosures—be allowed back into their former homes, or given new ones.

For the first time in 40 years, we have the chance to change everything. To end gangster capitalism. To jail the corporate and political criminals who have ruined our lives. To save what’s left of our planet.

The movement must grow.

Nothing matters more.

(Ted Rall is the author of “The Anti-American Manifesto.” His website is tedrall.com.)

COPYRIGHT 2011 TED RALL