Wealth Inequality, Plutocracy and the Fate of the Republic

What Will Be Our Legacy?

Things that you do not need to worry about at this very moment:

– gun control (nothing happens there but prayer)

– North Korea (hopefully the adults in the room will prevail)

– the Russia investigation (Mueller has a long way to go yet)

You should be paying attention to the following two items:

The Republican tax plan working its way through the House Ways and Means Committee

What the Republicans are attempting to do is to give tax breaks to the wealthy and to corporations.

Why are they doing this?

They say that it is because they want to stimulate the economy and create jobs. In the Reagan era this was called “trickle down” economics. It did trickle, but it did not go down.

The real reason the Republicans are pushing this tax plan is that they (and the Democrats) are lobbied extensively and influenced unduly by the rich and by major corporate interests.

Who lobbies for the common person? It depends on your circumstances. Do you own a home? The real estate lobby will support the effort to keep mortgage interest deductible. Do you have someone do your taxes? The tax preparers association will be there for you. Do you live in a state with high state income and property taxes? Your governor (and perhaps even your Republican representative) will argue on your behalf.

But for many Americans there is no powerful lobbying organization. There once was. When Bill Clinton was elected in 1992 approximately 22% of American workers were represented by labor unions. Today less than 12% of workers have that support.

In the last 25 years, two things have happened.

Labor unions have been decimated by a corporate war against them. The corporations have been aided by Congress and by the 28 states that now have “right-to-work” laws.

As a result of the US Supreme Court decision in Citizens United in 2010, corporations and wealthy individuals are now drowning the political process in money.

What happens when the wealthy and the powerful influence tax policy? They rig the system so that they pay as little as possible in taxes or, failing that, they take their money elsewhere.

The Paradise Papers

If the Panama Papers were the prequel, the Paradise Papers are the main feature. Wealthy individuals and corporations in the US and around the world have established numerous schemes by which they have avoided taxes.

Since the early 1980’s the rich have gotten much richer and they have looked for ways to protect their gains. Offshore tax havens may be legal, but they are legal because the wealthy have either written the rules or hired lawyers to create ways around the rules. Hiding revenue in “tax havens” is unethical and unjust. While the wealthy and lawyers and accountants benefit from the work of companies like Appleby, there are also victims. The tax revenue lost to nations because of these schemes could be used for infrastructure, health care and education. Nations are faced with a choice: forego improvements in these areas or find new sources of revenue. The burden of the new sources of revenue will fall on those less able to pay.

Offshore tax havens and the Republican tax plan are connected. If the tax plan is enacted, that gap between the rich and the rest will become worse and may become permanent. The Republicans are hell-bent on passing any tax plan, even if it requires accounting tricks.

What should be done?

We need to start by being honest with ourselves.

The US flag should be changed; the stars should be replaced with corporate logos.

We are no longer the Unites States of America.

We are now the United Corporations of America.

US representatives should be required to dress in jumpsuits when in Congress. The jumpsuits should be covered in patches that represent all those individuals and entities that have supplied their electoral campaigns with significant amounts of cash.

nascar-jackets-and-congress

If you donate $10 to the campaign of your representative in the US House or Senate, and you call that representative concerning an issue, their staff will take your call.

If you donate $1,000,000 to the campaign of your representative in the US House or Senate, and you call that representative concerning an issue, the representative will take your call.

Our political system is now a system of “legalized bribery.”

Representatives want your vote, but they need money for their campaigns.

The US is no longer a republic; it is a plutocracy.

We should simply admit it, and then work to fix it.

The articles listed below by Russ Feingold (“US campaign finance laws resemble legalized bribery. We must reform them.”) and Gabriel Zucman (“The desperate inequality behind global tax dodging”) point to places where we can begin.

The advice of Nick Hanauer (“To My Fellow Plutocrats: You Can Cure Trumpism”) is also worth a read.

In the near term we need to oppose the provisions of the Republican tax plan (the elimination of the estate tax, for example) that will make the situation worse.

We must have a long – term strategy and play the long game. The plutocrats certainly do.

What will be our legacy in this regard? Will we make the world a better place for our descendants, or not?

Inaction is consent.

fcd

Sources

Congress and the tax plan

Center on Budget and Policy Priorities

https://www.cbpp.org/

Ten Facts You Should Know About the Federal Estate Tax

https://www.cbpp.org/research/federal-tax/ten-facts-you-should-know-about-the-federal-estate-tax

Tax Policy Center / Urban Institute and Brookings Institution

http://www.taxpolicycenter.org/