February 22, 2011

Raise High the Tax Level, Carpenters

Faithful reader JM weighs in with the question about raising taxes. There are, after all, two approaches to balancing the budget. My own sense is that there is enough money sloshing around in the American economy to achieve a federal balance without significantly damaging the Lifestyles of the Rich & Famous. It would take two significant moves: One, an increase in the top marginal rate paid by the pluto-oligarchs; and Two, a more rational approach to defense spending which would reduce the outlay to, say, the $500 billion level (and that's everything, tips, gratuities, even the gift bags). To solve Social Security, the cap on the maximum income subject to FICA tax needs to be raised and perhaps titrated, year-by-year, to achieve a balance between outgo and income. And the health care system needs to be nationalized.

The Pluto-Oligarchs will, naturally, point to the following chart, which demonstrates that about 70% of all income taxes are already paid by the top 10%. This fact, of course, tends to demonstrate that income inequality in the United States has reached obscene, Gilded Age levels. Caricatures of the very rich come easily to mind. Do they really need 5 vacation homes when 4 should get the job done? Is it necessary to travel by helicopter to the Hamptons when a chauffeured limo is cheaper? If John McCain isn't even certain how many houses his heiress/USC cheerleader wife owns, isn't that an indication of excess and not just of mental vacuity?

Percentiles Ranked by AGI

AGI Threshold on Percentiles

Percentage of Federal Personal Income Tax Paid

Top 1%



Top 5%



Top 10%



Top 25%



Top 50%



Bottom 50%



I would answer that just because the wealthy are paying a lot (relative to the total paid) does not mean they are paying enough. It all comes down to a question of what kind of country we actually want, which is an oblique way of saying: what happened to the concept of patriotism in this country? Why do the rich, through their army of lobbyists, want to hamstring the federal government through relentlessly lowering the top marginal rates (and why does the Crypto-Republican, Barack Obama, play along)?

One idea I have is that modern American politicians, such as the aforementioned Mr. Obama, wear the American flag lapel pins popularized by the Bush-era Gauleiters to remind themselves that they are, in fact, Americans. It's not always obvious. The move to globalization, the tax breaks for offshoring companies, the preference for spending money in places like Iraq and Afghanistan instead of Detroit and Baltimore, confuse the issue of just whose interests they're really serving. Increasingly, I get the idea that patriotism in this country is not only the last refuge of scoundrels, but is an entirely outmoded concept. Saying such a thing in the wrong redneck bar in Columbus, GA, could be a huge mistake, of course, because all those soldiers transiting from Fort Benning to the killing fields of Baghdad and Kandahar, and who come home with one leg, or no eyes, or a damaged brain, don't want to hear about this "death of patriotism" stuff, so keep it to yourself, you Berkeley fag-radical.

A conversation to be avoided, at least in that context. Still, the people responsible for sending these soldiers overseas, by an overwhelming majority, do not themselves place their asses on the line, nor those of their close relatives (Bush, Cheney, Obama, Wolfowitz, Rice, Feith, Limbaugh, Beck, O'Reilly, Coulter et alia ad nauseum). Nor do they actually foment and sustain these wars out of patriotic motives; they're entirely mercenary, the acts of war profiteers or of political opportunists. Sadly, this is the emotional trap, the cover story of an inapt patriotism, which ensnares the military grunts, the ones actually in harm's way. I feel for them. You could say it's my patriotic duty.

All of this is a roundabout way of saying that I think The Powers That Be in this country essentially use the United States, for want of a less techno-hip word, as a platform for commercial purposes. America is a headquarters country, and the richest use the USA as a base of operations without sinking deep roots into our native soil. They build their factories overseas and they seek to starve their own country of nationality of the tax benefits of their largess (billions in corporate profits are kept permanently overseas so that they can avoid the problem of "repatriating" the money and exposing it to taxation). A compliant Congress builds a tax and regulatory regime which enables all of this unpatriotic activity.

Which is why I don't think a massive restructuring of the tax paradigm is worth the effort anymore. For entirely different reasons from the right wing "small government" freaks, who are primarily interested in dismantling the welfare state so that government's functions can be limited to maintaining the military-industrial complex and bailing out their banks once they screw up again in the course of trying to screw everyone else.

I've become more of a "regional guy," someone who believes the central government apparatus has become too big, too complex and completely unmanageable and unresponsive. These are the reasons I believe that so many Americans feel detached from the nation they grew up in. No matter what the polls show (leave Iraq now, end this decade-long fiasco in Afghanistan, shrink the military, place some rational limit on possession of private Kalashnikovs, give the people some form of socialized medicine we can actually afford, try to keep the ambient air temperature in the sub-100 degree range), the political system remains unswayed. It serves its own interests, not those of the general public.

Most of the things we really need that government provides happen at the local level: schools, fire departments, police, fixing potholes. The federal government has become a very irritating and insanely expensive distraction. So yeah, Grover Norquist: starve The Beast. I'm just picturing something a little bigger and more comprehensive.

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