Vermont Senator and Democratic presidential candidate Bernie Sanders is on the warpath. Not against Hillary Clinton — who he both likes and respects — but against America’s aristocracy. And if he has his way, this all-out class war will become one of the defining moral issues of our time.
It’s been clear for quite a while that something’s not quite right in America. The divide between the middle class and the ultra-wealthy casts a long shadow, but it’s probably not something that the average citizen witnesses or even thinks about on a daily basis. But the fact remains: if we closed that divide, life in the U.S. could look dramatically different than it does today.
What’s the Problem with Taxes?
It’s one thing for a U.S. senator to publicly denounce the greed of America’s wealthiest one-tenth of one-percent, but it’s another to have impartial and empirical data from the IRS to back him up. Thanks to this data, what we’ve always assumed about America’s wealthy aristocracy holds up under scrutiny: this particular type of American hasn’t been paying his fair share of taxes, and hasn’t for quite some time.
Consider, for example, the final year of tax cuts enacted by Bush The Second. During that time, there were more than one thousand people in the U.S. earning more than $60 million every year, who also happened to pay far less than 20% in federal income taxes.
Now consider Sanders’ proposal: to raise America’s top income tax rate to somewhere around the 52% mark — and, mind you, that’s just for people making $10 million or more per year. We live in a country with a graduated income tax system, which means it wouldn’t be particularly difficult to raise taxes on the wealthiest Americans while leaving everybody else — the middle class, namely — alone.
Calling On Historical Precedents
Did you notice the word restore in the last paragraph above? It’s not a mistake; during the presidency of Dwight D. Eisenhower — a Republican, mind you—the top tax rate in the country sat at 92%. I’ll say that again. The top tax rate in the 1950’s was 92%. The corporate tax rate was 50%.
If you believe in Conservative Dogma®, what we should have seen during that time was falling wages, massive unemployment, and an economy in a state of unprecedented chaos.
But if you believe in reality, instead of tragi-comic fearmongering, we had anything but chaos. We had a proliferation of decent-paying jobs, gradually rising wages, and a prosperous economy. This isn’t rhetoric; it’s historical fact. Open another tab and do a Google search; do the research that most of Congress is either unwilling or unable to do. And most of them lived through the ’50s!
Here’s another number: 95%. According to economists, that’s the highest possible tax rate under which America’s ultra-wealthy could maximize government revenue while not being dissuaded from pursuing further business opportunities. In other words, if you’re worrying about the big, bad government causing Atlas to Shrug, you should know that it would take considerably more governmental “bullying” than we’ve ever seen in this country to persuade our job creators to pack up their corporations and move off the grid. Anyone who tells you otherwise is lying.
Sanders’ commitment to raising the top tax rates for billionaires and corporations is not an ideological one, and it’s not just bolstered by historical precedent. As I indicated earlier, it’s backed up by modern data from the IRS. These days, the highest tax brackets for income and capital gains kicks in at just over $400,000 in annual income. Ridiculous, right? Translation: people who earn $70 million in a given year pay the same effective tax rate as somebody making $400,001. Doesn’t quite seem fair, does it?
This is a big problem. There are about 14,000 tax-paying Americans who earned more than $12 million in 2012. In that same year, 1,360 Americans earned over $62 million. This is the top one-hundred-thousandth of the American population that Senator Sanders is always going on about — and not only do they not pay more in taxes than “mere” one percenters, in some cases, they actually pay less.
If climate change is the most significant natural threat to life on earth, then income inequality is easily the most significant man-made threat to same. Our economy and, indeed, even our way of life, is utterly unsustainable in light of the facts you’ve just read. If we properly taxed America’s wealthy, we could easily rebuild America’s crumbling infrastructure, properly fund our public schools, and provide universal healthcare to everyone who’s lucky enough to call themselves an American citizen. In other words, we could finally build a government that works for all of us, instead of just a tiny handful of greedy aristocrats.
The problem, of course, is the conspicuous lack of public servants who are actually looking out for poor and middle class Americans.
Bernie Sanders may have been beating the same drum for the last 40 years, but his entry into the presidential race will finally elevate these issues into the mainstream. Indeed; the only reason you’ll ever hear Hillary Clinton utter the phrase income inequality is because Bernie Sanders got there first, and she now fears for her “inevitability.” If she wants to win voters away from the curmudgeonly Senator from Vermont, who has lifelong track record of fighting against the system, instead of profiting from it, she’s going to have to do one of two things: either start pretending she’s an actual progressive, or cheat like hell during the Democratic primary. We’ll see which she chooses.
The Minimum Wage Is About Dignity
No conversation about Conservative America’s collection of favored economic fantasies would be complete without touching on the minimum wage.
What we have today truly is a minimum wage. By definition, it’s how a company tells its workers: “I’d pay you less, but it’s literally illegal.” Our current federal minimum of $7.25 per hour is a starvation wage. If anybody reading this would be unwilling to sell their lives, one hour at a time, for $7.25, then they have no business insisting that anybody else be okay with it, either.
Here’s the Great Lie about the minimum wage that Conservative “thinkers” have been peddling like snake oil for almost an entire generation. They claim that raising the minimum wage would cost jobs and cast the United States into unprecedented economic turmoil.
That’s fine as a theory, but what does the evidence say? To begin with, it tells us that Henry Ford was paying his factory workers the equivalent of $15/hour 100 years ago. What does that tell us? It tells us that, on the whole, working Americans have not only failed to receive a raise in more than a century, but that average worker wages may have actually gone down in that same period of time.
Now, consider this: over the last 40 years, average CEO pay has risen at more than 90 times the rate that working America’s pay has risen, to the point where the average CEO now earns about 300 times what his workers make.
As for the assertion that even our tiny, intermittent minimum wage hikes over the years have cost us jobs? Has nobody noticed that we don’t have cobblers anymore? Machines now make our shoes — that, or child laborers in Vietnam or Bangladesh. Every emerging technology both costs and creates jobs in one way or another — and so do badly written trade deals that allow unscrupulous corporations to leverage slave labor overseas. If anybody claims that the jobs lost during, say, Bush The Second’s reign of terror, were due to workers’ wages being too high, they are, once again, either lying or hopelessly ignorant.
It’s time to silence the lies and start leveraging real-world data in our economic conversations once again — nothing else will do. Not rhetoric, not assumptions, and not rampant greed. There’s a Fight For Fifteen happening right now all across the country, and Bernie has stood alongside the movement from the very beginning. Some folks say $12 is more “realistic.” That’s fine — both I and Senator Sanders welcome a vigorous debate. But at the very least, one of our major political parties needs to recognize the immediate and desperate need to tie the minimum wage to inflation, to account for the realities of modern life.
Trickle-Down Economics and Other Lies
I received a bit of folksy wisdom in a political chain email (still the fastest way on earth to disseminate misinformation) a couple weeks ago, and it’s bothered me ever since. It’s not a new idea; in fact, the quote in question, from Alexander Fraser Tytler, has been kicking around for quite some time. But its misappropriation in today’s toxic political environment seriously rubbed me the wrong way. Here it is:
“A democracy cannot exist as a permanent form of government. It can only exist until the people discover they can vote themselves largess out of the public treasury. From that moment on, the majority always votes for the candidate promising the most benefits from the public treasury, with the result that democracy always collapses over a loose fiscal policy — to be followed by a dictatorship.”
I have so many problems with this, but I’ll settle for discussing just one.
The only people voting themselves “largesse” from the “public treasury” are the people who don’t need gifts in the first place. They are the one-hundred-thousandth you’ve just read about. And they are the ones being pandered to by members of Congress — mostly, but not exclusively, from the Republican Party — who have discovered that they can trade the promise of tax cuts for campaign donations. They are the obstinate few who are holding America’s prosperity hostage in the name of “trickle-down” or “supply-side” economics, or whichever other name you give to the ancient lie that Conservatives still cleave to in defiance of reason and evidence.
Government and taxes should work for all of us. And those gifted few who have benefited the most from life in America have a responsibility to give back to the workers who made them what they are, and to the public that buys their goods.
Anyone who still believes in greed as a virtue probably skipped a few days of kindergarten; that’s where I learned that we’re all lifted when we lift each other.
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