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?

Plutocracy?

Corporatocracy? Is it big corporations, or wealthy individuals who have stolen democracy and poisoned citizens' minds? It's both, of course. All I know is: people like Russ Feingold bit the dust, because they refused to play to the big donors, the corpocrats who were funding entities like Crossroads GPS.

Plutocracy means rule by the rich, and by that standard, the election of Ron Johnson over Russ Feingold, certainly looks like a plutocratic takeover. Feingold was not only not wealthy, he was fastidious about where he got his campaign funding, and he was notoriously independent when it came to the needs of the wealthy. So old fashioned: he insisted that ordinary people and their concerns mattered. The man who defeated Russ, Ron Johnson, is a millionaire plastics manufacturer who never held office, but was not particularly fastidious about where the money came from, and was the beneficiary of almost all the anonymously funded ads (most out of state); they either promoted his positions, or attacked Feingold.

On the other hand, Feingold raised significantly more money than Johnson (all from small donors, apparently), and spent more, perhaps more than Johnson and the out of state ad campaigns combined. The election in Wisconsin, and in many other states, has been described as "rejectionist." It was like that voter in my Election District who demanded a list of all the incumbents, so he could vote against them all. See my earlier blog for that story.

Except maybe the election wasn't really rejectionist. My two Democratic Senators were reelected easily, even if my Congressman lost. My Senators, Schumer and Gillibrand, are probably acceptable to what some are beginning to call the plutonomy, i.e. the wealthy, corporate movers and shakers. They have both been friendly enough to Wall Street.

The system we appear to be evolving towards looks increasingly like the end days of the Western Roman Empire. That was a true plutocracy, however, because there were no corporations. This, in some ways looks more insidious. The wealthy get what they want, which includes turning everyone else into the equivalent of serfs, but they also get to set their serfs, in far-flung parts of the world, against each other, competing for the lowest wages. And, because of mass media, they can persuade them that this is the way things have to be.

"The best democracies money can buy" means plutocracy, or corporatocracy on a world scale.

A fellow graduate student (long ago) was asked, while on a Political Science panel, what he thought about Revolution. Pointing to his small stature, he said, "I'm a small Political Scientist, so I don't like violence." I'm small, too, and I agree.

But I wonder how much misery people will willingly endure--before they erupt. Is that what suicide bombers are doing already? Are they the beginning of our era's barbarian hordes?