March 30th, 2011
by F. Grey Parker
I have never seen so many self-described "adults" issue public declarations that a glorious America can be achieved exclusively by allowing the rich to eat their cake and have it too. Honest liberals and conservatives are increasingly coalescing around what I have been saying for years; That is, that Reaganomic idealism is as naive as pure socialism. It is non-sustainable. It wreaks havoc over time. Most notably, it's childish. It is predicated on economic faith rather than statistical science. It's not a philosophy; it's a tee-shirt.
America faces a crippling crisis of revenue and not spending. Say it with me. "Revenue." The next person you hear who makes dire pronouncements about how "destructive" the United States' corporate or highest marginal individual tax rates are is either willfully stupid or they are lying.
One of the great ironies of the success American "conservatives" have achieved in utterly corrupting our tax code is that we, the American taxpayer, are essentially underwriting two thirds of America's publicly traded corporations. The right has, for all intensive purposes, begun nationalizing some of our businesses with the slick caveat that we receive no dividends for our investment. This is not hyperbole. For example, "Exxon Mobil made $19 billion in profits in 2009. Exxon not only paid no federal income taxes, it actually received a $156 million rebate from the IRS, according to its SEC filings."
Exxon Mobil made no commitment to domestic workforce expansion. They made no commitment to invest in our infrastructure. They made no commitment to keep more of their currency reserves in country. In fact, in 2009 they outsourced 1 billion dollars in contracts to India alone. They did nothing for the United States of America that warrants middle class taxpayers forking over $156 million dollars. Unless we are investors. When do we receive our shares? This is the real government Ponzi scheme, not Social Security.
The supply-side argument for decades has been that the more we "let businesses keep" the more they will invest. That this has turned out to be so provably untrue is completely ignored by "free market" fundamentalists. There is no arguing with those in our country who have bought into this nonsense. It turns out that the more we let the rich keep, the more they keep. Surprise. Cash hoarding takes less work than "innovation." It also involves less "risk." Most importantly, it incurs the least "uncertainty" as far as financial choices are concerned.
My "radical" suggestion since roughly 2003, when I first actually read Bush 2's jaw droppingly stupid tax proposals , has been to suggest a return to the Eisenhower Era code. Seriously. I am endorsing the economic worldview of one of our nation's great Republicans. I am not the only one who has noticed the absurd vilification that this sort of talk receives.
Andrew Sullivan wrote recently:
"Income tax rates are now lower than they were under Ronald Reagan and far lower than they were under Eisenhower. And yet it has become a Norquistian non-negotiable that no taxes can be raised at all on anyone, let alone the beneficiaries of the last thirty years - and those who differ must be "leftists" - even when the US is facing debt of historic and dangerous proportions. Someone advocating what Eisenhower was perfectly comfortable with would be regarded by the Republican right today as a communist. And yet, of course, Eisenhower was emphatically not a Communist, whatever the John Birch society believed. In retrospect, he might even be seen as the most successful small-c conservative of the 20th century. "
Sully went on to cite a tough piece by Glenn Greenwald titled Billionaire Self Pity and The Koch Brothers which I also recommend.
It's worse than this, though. There really are no more loopholes to create when you've reduced the majority corporate tax burden to zero. Michigan Gov. Rick Snyder may be tipping the hand we can expect to be played nationally by these folks. Having no other way to give our money to corporations in his state, he has now devised a scheme that actually raises taxes on the poor and middle class to do so. This is with no new expansion, construction or hiring guarantees. I am sure the corporations will do the right thing with our money.
The class war is on. The rich declared it on the rest of us. That they are winning is a testament not only to their long term planning and well organized propaganda, but to the inherent trust ordinary Americans had developed over several generations in a brighter tomorrow. They have used our own optimism against us. I'll spare you the frog in a cold pot metaphor but it is increasingly apt. The solution is also incredibly simple... Raise taxes, dammit.