The Deprogramming Dilemma – 19

Death, Taxes and Democracy

By D-Jay

It’s often said that the only two things you can count on in life are death and taxes, and in the wake of the Covid-19 pandemic, the issue of our own mortality is very much with us.

But so too is a growing fear that American democracy might also be on its deathbed. If the runaway train of Republican voter suppression and Trump/QAnon crazy cannot be derailed before the 2022 elections, government of, by and for the people will pretty much be ready for last rites.

And – as I reported in a recent post here based on a New York Times article I wrote for the University of Tokyo (sorry, print version only) - a consensus has emerged among many of the world’s leading climate scientists that if drastic action is not taken by 2030, we will no longer be able to prevent runaway climate change.

Do you really think that will happen if the Trump crowd prevails?  If so, think again.

Are you really sure the scientists are being too alarmist?  Let’s talk after you take a quick trip up to the Pacific Northwest to watch the tram cables melt in the 115º heat.

In short, the death of American democracy will inevitably lead to the death of human civilization as we know it, if not the literal death of most life on earth.

Having dealt with the cheery subject of death, let’s turn our attention to the other unavoidable issue…taxes.

The two are not unrelated.

In Washington DC now, infrastructure – and how to pay for it – is the major issue of the day. At Republican insistence, the so-called compromise bill doesn’t roll back the Trump tax giveaway to the rich and large corporations. Instead, it relies mainly on increased enforcement of very high-earners dodging of the minimal taxes they are now supposed to pay.

Actually, this is not a bad thing at all. It will supposedly net about $100 billion. The problem is that it goes nowhere near covering the funding needed even for physical infrastructure, let alone effective action on climate change and other desperately needed “human infrastructure” projects sought by the progressives.

Why not?

Why does our tax system so favor those who don’t need the help, while disadvantaging the millions more who do?

Why doesn’t it meet the needs of our society, to say nothing of the future?

Does it really need to be this way?

In a word, no.

During the Eisenhower administration – back when America was still “great” in the Trumpian world view - the top tax rate was 90 percent.  Up until the Reagan years, the highest growth in income went to the poor and middle class – not the rich.

So how did it all go so wrong?

And, why hasn’t it been fixed yet?

Look no further than the enduring – and very well financed – myth that the rich are the “job creators.” That putting tons more money in their pockets by means of massive tax cuts leads them to greatly increase their productive investments into the economy and that “supply side economics” is anything but an abject failure.

Why would it be?  Back in the 1950s, if a company paid its top executives the kind of compensation they get today, the lion’s share of it would go to taxes. As a result, most good capitalists regarded productive re-investment in their firms as a much better use of their money.

Surprise, surprise, the economy grew in a healthy fashion, along with wages and employment.

Put most of the money into the pockets of the already ultra-rich, however, and a good chunk of it is either hoarded or goes to such worthwhile pursuits such as CEO trips into space and gambling on cryptocurrency.

Care to bet on Dogecoin, anyone?

If the goal is to transfer as much money and power as possible from the poor and middle classes to the ultra-rich, supply-side economics have been an unqualified success. In 2018, for example, three men – Jeff Bezos, Bill Gates and Warren Buffett - had as much wealth as the entire bottom half of the U.S. population and the top 5% of Americans now hold fully two-thirds of our total assets.

No wonder so many of us are struggling.

If the goal is to create and sustain a vibrant economy with lots of new business opportunities, the best thing that can be done is to put high taxes on the very rich and put as much money as possible into the hands of the poor, retirees and the middle class.

Why?

Because – duh – they are the ones who will spend it.

And money circulating in the day-to-day economy is what creates business opportunities.

So there we have it.

Taxing the ultra-rich and getting more money to the rest of us would be a very, very good thing to do. 

But how?  What would a more reasonable tax system look like?

Isn’t this all impossibly complicated?

It needn’t be.

If we started with a set of five simple principles, the rest would be easy.

1 – Income is income. Wages, capital gains, interest, dividends, stock options, profits from corporate stock buybacks and everything else should all be taxed at the same rates. No more free rides for the idle rich while those of us who work for a living are taxed on every penny we earn.  With rates set properly, people lower down the income scale might even see their payments go down.

2 – Higher marginal rates for very high income levels should be added. Dwight Eisenhower’s 90% on annual earnings over $50 million or so sounds good to me. If lower rates for the poor can also be arranged, so much the better.

3 – Exemptions should be capped. It could be set at a very high level – say a million dollars a year or even more – so that the middle class and small business owners aren’t impacted, but no more tax avoidance money games of the sort that let Trump, Bezos and the like end up paying nothing at all in some years. Needless to say the kind of deductions that can be taken should also be drastically reduced, with those remaining targeted at helping the poor and middle class.

4 – No more caps on Social Security and Medicare payments. Bill Gates should pay the same percentage of his income on payroll or self-employment taxes as you do.  Presto change, no more Social Security funding crisis – ever.  Retirement benefits could even go up. Especially if focused on the lower end of the wealth scale, this could both reduce the suffering of the elderly poor and provide an ongoing healthy stimulus to the overall economy.

5 – The poor and middle classes already pay a wealth tax. Time for the super-rich to pay one too.  Huh?  A middle-class wealth tax, you’re probably asking.  We Americans don’t pay wealth taxes, do we? 

Well…yes we do. 

They are called property taxes. And they apply to the item that makes up the vast majority of middle-class wealth – our homes.

If you own a home, you pay it directly to your state or local government.  If you rent, you can be sure that your landlord has included the cost into your monthly payment. 

But don’t property taxes just apply to houses? 

Well, now they might, but Google the definition of “property” and the first one that comes up is, “a thing or things belonging to someone; possessions collectively.”  Not just real estate holdings, but everything you own.

Let’s use that definition and apply a “property tax” at the federal level. 

Elizabeth Warren’s proposal for a 2% tax on worldwide assets over $50 million and an additional 4% for those over $1 billion would be a good place to start.

Impossible?

As propagandized as we’ve become, probably so, but imagine how much good someone like Joe Biden could do if our tax system was based on principles like these.

The real question we face is simple:

“Why not?”

 

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Contributing factors to our democratic decline:

From the Right

Truth Decay – Destruction of the Ability to Distinguish Fantasy from Reality

Ever Worsening Demonization of the Media

Manufactured Distrust of Science and Expertise

The Iron Bubble of Disinformation

The Dark Money Conspiracy

Information Warfare Aimed at Us

Domestic Terrorism

Emergence of a Full-blown Cult of Personality

Ongoing Voter Suppression and Gerrymandering

Election Security

Continued Weaponization of Social Media

Toxic Right-wing Pseudo-Christianity

Racism

Sexism and a Pseudo-Macho Mentality

Putinism and the International Neo-Fascist Movement

Lack of Education in Civics and Critical Thinking Skills

Destruction of Crucial Democratic Norms

The Collapse of Good Manners and Propriety

Radicalization

Sedition

From the Left (and Sometimes the Center)

OTT PC (Over-The-Top Political Correctness)

Inept Messaging

Lack of Media Investment

Arrogance

Surrender of Rural America Without a Fight

Failure to Call Out and Counteract Toxic Right-Wing Christianity

Failure to Call Out Right-Wing Racism, Sexism and Fascism for what it is, and Counteract it in Time

Framing Too Many Issues as Being Rooted in Race Rather than Economics and Class

Failure to Recognize Just How Bad Things Can Really Get

Forever Bringing Beanbags to a Knife Fight

Failure to Protect Critical Norms

 

 

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