Bob Herbert writes:
As the throngs celebrated in Cairo, I couldn’t help wondering about what is happening to democracy here in the United States. I think it’s on the ropes. We’re in serious danger of becoming a democracy in name only.
While millions of ordinary Americans are struggling with unemployment and declining standards of living, the levers of real power have been all but completely commandeered by the financial and corporate elite. It doesn’t really matter what ordinary people want. The wealthy call the tune, and the politicians dance.
So what we get in this democracy of ours are astounding and increasingly obscene tax breaks and other windfall benefits for the wealthiest, while the bought-and-paid-for politicians hack away at essential public services and the social safety net, saying we can’t afford them. One state after another is reporting that it cannot pay its bills. Public employees across the country are walking the plank by the tens of thousands. Camden, N.J., a stricken city with a serious crime problem, laid off nearly half of its police force. Medicaid, the program that provides health benefits to the poor, is under savage assault from nearly all quarters.
The poor, who are suffering from an all-out depression, are never heard from. In terms of their clout, they might as well not exist. The Obama forces reportedly want to raise a billion dollars or more for the president’s re-election bid. Politicians in search of that kind of cash won’t be talking much about the wants and needs of the poor. They’ll be genuflecting before the very rich.
Meanwhile, taxes as a share of the economy are at the lowest levels in 60 yrs. But, “We can’t raise taxes.” This, like most things is half true. Raising taxes to 50% on those earning over $2m/yr. would raise wages on lower earners, and discourage incomes exceeding that figure–that’s all good. The people who earn that kind of money generally have a hard time justifying it–but seldom have to. Just as incomes seem to raise exponentially for those super-earners, a higher tax rate captures that untethered rise. Further, it is absurd to compare incomes of $250K versus $2million. Expenses aren’t all relative, many are fixed and have some absolute limits on cost/price. Education only costs so much, while both these earners might entertain sending their children to equivalent schools–the ability to afford those would substantially different. We similarly should put some cap on gov’t deductions (homeowners), underwriting (Fannie Mae), and benefits (increased means testing for SS.)
The average professional complains that his taxes are high. And, all taxes seem to hit them hard. So, they rightly complain that taxes are too high. But, the taxes on their bosses are too low. They seldom make this distinction, and even the Bush tax rates didn’t–the top rate 39% kicked in at $300K. Even though, only those dollars that exceed that threshold would be taxed at that higher rate. I’m not sure professionals opposed these changes, but the middle class Rep. did. And, they rejected higher taxes. The Dems should offer no tax increases on middle and lower classes, and higher taxes on the really wealthy. It’s amazing how these tax rates, modest compared to the tax rates of Ike or Nixon can’t even be mentioned in political circles. The public generally supports this, even though it’s never defended or mentioned on TV or even NPR. Not even Amy Goodman has gotten behind such a notion, perhaps serious economists limit themselves to the realm of political reality. Again, this is popularly supported, and likely the best thing we could do–if the economy of the 50s and 60s are any indication. These most progressive taxes in history managed to keep productivity and pay in tandem for that entire era.
Let me elaborate on who would be effected by this tax rate. Not many people earn incomes over $2m/yr.–very few with bosses. Corporate execs and entertainers (the media) would be the two prime examples. Entrepreneurs and those who start and build businesses could easily avoid these taxes, as can Wall St. traders. I’d like to broaden definitions of “income” to better capture Wall St. incomes but leave entrepreneurs, and investors as much as possible. I won’t go into corporate structure and how the boards are not elected but selected by an incestuous cadre of self congratulatory elites who are checked only by each other–the only such group in the economy. Even incestuous and pathetic Congress refused a pay raise last year, showing more discretion than our corporate overlords. This is well elaborated on by John Bogle who started Vanguard funds and worth the inquiry into his books, interviews, papers. The people who are screwed by this are the stockholders, who, in this “ownership” society oddly carry little real protections. We’ve become Egypt where our elites lard themselves with lucre and riches that are far beyond the conception of many of us who earn our money with our time and labor. Ol’ Woody Guthrie had it right, “The gambling man is rich and the working man is poor, and I ain’t got a home in this world, anymore.”
What a sorry mess this country has turned out to be. I don’t suppose anyone is willing to put a time on when the same type of revolution that has started in the M.E. will reach these shores? Tunisia with around 10 million people, Egypt with around 80 million people, have been able to change, at least so far, the U.S. with around 300+ million people, can’t be too far behind as the conditions here are not that dissimilar today. I also wouldn’t underestimate the majority of people who are working for the Military/Industrial/Financial/Business complex’s, that they too have those neat little thumb drives loaded with facts & figures as an insurance policy with an eye on protecting their own future. Wikileaks has shown how important that can be in ones livelihood and/or future.
If you have no progressive tax regime, you have no progress in society. The problem could be defined as the lack of real values in modern society — because the majority imagine that money is a value, rather than a surrogate for value.
The highest values in a democratic society should be in order, its citizens, its children, and its aged. The citizens are dealt with fairly in the divisions of wealth and social responsibility, the children are educated in an open school system to become valuable contributors to the future society, and the aged should be assisted to live satisfying retirements where they might still contribute to the extent of their abilities. Any other form of social construct is the opposite of democracy — it is the basis for tyranny — the tyranny of the rich, such as the one the Egyptian people have revolted against.
A look at the revolutions in history indicate the only cure for a broken society — divided into obscenely rich and desperate poor — is to overturn it. No amount of legislative tinkering can provide the impetus to eliminate the sickness.