Here’s a Capital Idea: Make the Rich Pay Taxes!

Class warfare? Every time the D’s timorously burble their

little demurrals on the subject of the R’s pro-millionaire tax scheme, the

Republicans answer with the shout, “Class warfare!” They should live so long.

Class warfare is chaps like those Dayak fellows in Borneo coming at you with

machetes, aiming at knee and gonad. Instead, what we’ve got here is overly

genteel discussion with a marked absence of the kind of rage that is described

as righteous and a bit frightening. In contemporary, money-soaked Washington,

that’s a little too much to ask.

The Republicans yell “class warfare!” whenever the subject

of tax justice is raised because the phrase is meant to remind us of

Marxism-and therefore something beyond the pale of civilized thought. The term

“class warfare” is used only to intimidate Democrats, who are already so

intimidated that they use the label “progressive” to describe themselves, lest

they be called liberals. Well, the opposite of “liberal” is “reactionary,”

which is what the Bush tax schemes are.

Really, here we have Paul O’Neill, the Secretary of the

Treasury, who earned $56.4 million last year as the main man at Alcoa and got

away with paying no payroll tax-not a dime’s worth-on over 55 million bucks’

worth of his compensation. So while Mr. O’Neill pays no tax on 99 percent of

his income, virtually all the rest of us pay a payroll tax on 100 percent of

what we make. And this creep is now popping up in front of Congressional

committees saying he wants his income tax cut. Oy!

President Bush has reached into his pack of reactionary

dogmatics and proclaimed that nobody should pay more than 33 percent of their

income in taxes, a statement greeted with unalloyed joy by the plutocratic

class (and thank you, Dr. Marx). Why this number and not some other is never

explained-but when you’re dealing with dogmatics, it doesn’t have to be.

The Democrats, when they can tear themselves away from

taking subventions from the same people who support the Republicans, say that

isn’t fair. “Fair” and “unfair” have become the wimp words of modern, mousy

liberalism. In a debate over taxing wealth and income, “fair” and “unfair”

aren’t going to get you very far, particularly when the Republicans can say,

quite correctly, that poor people in modern American have color TV, air

conditioning, telephones and plenty of the plastic whatnots of our time.

This debate cannot be won along those lines. The question is

plutocracy: Shall the rich rule? Shall we have a lopsided society à la that of

the last century of the Roman Republic, in which a few unimaginably rich

families used their wealth to manipulate the vast plebeian mob until the whole

rotten scaffolding fell down, to be replaced by an hereditary monarchy? The

question is, how great an imbalance in the possession of power, as represented

by money, can a democratic society take? We are approaching a point where the

plutocrats have in effect been able to buy 100,000 or a million votes while you

and I cast our one.

Look at New Jersey and the election of Jon Corzine last

autumn. Here is the example of a plutocrat whose accomplishments prior to

buying a Senate seat were essentially those of a bucket-shop operator. A

sensible tax system-one that supports the continued existence of

democracy-would have deprived this gold-plated nonentity of the power to seize

a high office in the Republic as he did. That he ran as a Democrat is

symptomatic of how difficult it is to maintain a plausible democracy when the

edifice is overrun by rich rodents. You have got to use the tax collector as

the rat catcher.

It is a strange thing, but the Democrats, stumbling around

in the thickets of identity politics, have made things more difficult for

themselves. They’ve done so by twisting and distorting the word “democratic.”

Too often in common debate and daily journalism, “democratic” or “undemocratic”

doesn’t refer to our system of governance but to special group pleading.

“Undemocratic” has come close to meaning “not good for the black people” (or

the Hispanic people, or the homosexual people). “Undemocratic” falls on the ear

as a synonym for “unfair” or-God save us!-“insensitive.” Unless we take care,

“democratic” may take its place on the list of whiny, wimpy, self-centered,

selfish, self-absorbed P.C. words that sound like fingernails on a blackboard

to sensible people.

Get this debate back

where it ought to be by asking the important questions, such as how long can

our democracy maintain itself if 2 percent of the population own or control 60

or 70 percent of the society’s disposable wealth? Anyone looking at the

struggle over campaign contributions has reason to be worried about our

political future. The plutocracy’s influence on the national legislature and

the Supreme Court is so large and obvious that the odds for the passage of an

effective, as opposed to a nominal, campaign-finance law in this session of

Congress or any other are between slim and none. The odds of a truly democratic

(or, if you will, a class-warfare) tax bill are about the same. Nevertheless,

let’s ask ourselves if one way to clear up the corruption of the democratic

process isn’t to take away a significant clump of the corrupters’ dough-re-mi.

The plutocratic answer to this argument is that, quite to

the contrary, the rich should get more money when taxes are cut because the

non-rich will simply spend their money on unproductive things like paying down

credit-card debt or buying food. The rich don’t have any credit-card debt, and

they have already destroyed vast sections of Long Island with their ugly

mansions, so they are in a position to put their capital to socially valuable

use.

The Democrats denounce

this reasoning as “trickle-down” economics. Well, a case can be made that

sometimes the trickle-down drops do indeed fall on the noses of the vast,

toiling white-collar masses. Cleared of its hot air, this is an argument about

what kind of tax legislation gives the economy the cattle-prod shock to send it

into a condition of prosperity. Judging from the past, you really can’t tell if

the cattle prod works or not. The Kennedy tax cut-often used as an example by

the plutocratic apologists-was followed by a happy upsurge in business. The

Reagan tax cut was followed by some years of high unemployment and what passes,

in our era at least, for hard times. Go further back in the 20th century and

you get ambiguous answers. The Harding-Mellon tax cut was quickly followed by a

great burst of prosperity, one that lasted nearly 10 years. The Franklin

Roosevelt–New Deal cuts were not followed by much: The unemployment lines, soup

kitchens and Hoovervilles remained part of the American landscape. Low taxes

and low interest rates had no discernible effect on ending the Great

Depression.

There are no single steps that automatically perpetuate

prosperity or extract us from recessions; there are no one-to-one relationships

like that. What works one time may work a second time and fail a third. Thus,

basing a tax cut or tax increase purely on what its advocates promise for the

economy in the next six months is fool’s gold.

It is argued by the hired mouths of the plutocracy, their

economics professors and the denizens of their think tanks that the rich should

go untaxed because they-not having to spend all their money on groceries or

paying off plastic-will invest their surplus in technology and enterprise, which

pays off for one and all. Sounds good. And to give the rascals their fair

measure of credit, sometimes it does pay off.

But sometimes the rich

don’t invest, or they don’t do it well. It isn’t true that just because you’re

rich, you’re smart. The plutocratic class can be assigned no small part in the

destruction of billions of dollars in the stupidity of the dot-com disaster.

All plutocrats aren’t equally good at plutocrating. A Warren Buffett is, but

what have the venture capitalists who must answer for the squandering of untold

sums of money on Priceline or the Iridium idiocy done to increase material

well-being?

No doubt about it, some

of the big rich do make sound investment decisions, thereby helping themselves

and the general good, but a helluva lot don’t-and the track record these past

few years isn’t so impressive that these people, as a class, deserve yet more

than they presently have to invest via a tax cut. These people weren’t the only

source of investment money. To hear them talk about it, you’d think they were

alone out somewhere in dangerland doing the pioneer investing that gave us the

technological basis for the huge jumps in productivity we’ve enjoyed for the

last decade or so.

Yes, some did, but so did the taxpayers. For 200 years, a

major source-perhaps the largest single source-of research-and-development

money has been the federal government. From the development of machine tools

and the telegraph to the newest work on the genome, taxpayer money was put up

when private venture capitalists wouldn’t or couldn’t. The Internet, which has

so captivated and transfixed American business, was developed with taxpayer

money. Say what you want about a Brave New e-World, Uncle Samuel paid for the

birthing.

So it isn’t true that billionaires are the only ones smart

enough to invest productively. Let’s continue to have a mixed system of

investment; it has worked well enough since Alexander Hamilton’s time. We don’t

have to choose between prosperity and democracy. Class warfare be damned, make

the rich people pay their taxes. Here’s a Capital Idea: Make the Rich Pay Taxes!