Taxes and Class War

When Republicans insist and some reluctant Democrats agree: we have to cut the deficit and slow the rise in the debt, they look in the wrong direction, on purpose. Certainly, the US is the largest debtor in (and to) the world, and our debt continues to rise, increasingly to Japan and China.

The Republicans' budget guru, Congressman Paul Ryan, wants to cut $6 trillion from government spending in the next ten years--and also cut $4 trillion in taxes to corporations and high-income earners! It becomes more clearly class war when you see his targets for cutting spending: programs that benefit the poor, like education, Medicare and Food Stamps, programs and tax loopholes that benefit the shrinking "middle class," including Medicare, Social Security and mortgage and state income tax deductions. He wants these cuts, and more, to pay for the tax cuts.

The US is a relatively lightly taxed nation, especially for high-income earners and corporations. While conservatives cite the 35% corporate tax rate as the highest in the developed world, two-thirds of corporations pay no taxes, and few pay the full 35%, because of all the loopholes for which they've lobbied strenuously. The total tax breaks for corporations has been estimated to cost $660 billion in the next five years. Further, most high-income earners don't pay much of their taxes at the highest rate (cut by W and continued with Obama's reluctant signature in the tax deal last December). CEO's and other wealthy people earn most of their income in capital gains or dividends, taxed at 15%, about half the rate of "earned income." There are hedge fund directors who earn billions a year, and pay only at the 15% rate; they are hardly over-taxed.

We need to solve our deficit and debt problem by raising taxes on the wealthy and corporations and by re-configuring our defense, bringing most of our troops home, shrinking our forces, and recognizing that we can't afford to police the world. Those two measures alone would more than solve our deficit and debt problem, if we also allowed Medicare to negotiate drug prices as well as streamline its operations, as planned in the Health Care reform act.

We need to change the conversation. Our income tax is hardly progressive, and overall, our tax system takes more from the poor and middle class than it does from the wealthy. Our tax system hasn't yet become as cruelly inequitable as the Roman system in which the wealthy paid almost nothing and everyone else paid oppressively high taxes, or sold themselves into serfdom. But that's the direction in which Republicans like Paul Ryan want to go. Some Democrats are bought off, because billionaires have a lot of money. Some Democrats don't have a clue. And liberals like Feingold have been driven out by just some of the big boys' money, leading all politicians to draw their own conclusions.

Do ordinary people stand a chance?