Editor: Please welcome Jim Miller – publishing here for the first time, and publishing his first installment in his new column here, “Under the Perfect Sun”.
by Jim Miller
These are grim times. The worst are full of passionate intensity and the best lack all conviction. The Democrats at the state and national levels seem ready to embrace economic scarcity and budget cutting as the “new normal” while the right smells blood in the water and is going in for the kill on collective bargaining rights, women’s rights, environmental regulations, funding for education, and long untouchable social programs. While the Democrats play prevent defense, the corporate-funded right is going for it all, working to change the rules of the game permanently, short-term costs be damned.
According to many pundits, the lesson of Wisconsin is that the right-wing over-reached by going for the total elimination of unions rather than taking the sizable concessions they got from labor to the bank. Now, many progressives hope, the fury unleashed in the badger state, Ohio, Indiana, and many other key electoral battlegrounds will bring a political reversal in 2012 (or earlier in recall elections). But if we take right-wing overreach as the only lesson of Wisconsin we are making a big mistake.
What Wisconsin showed us was that the populist anger brewed in the catalyst of the Great Recession and hijacked by the Astroturf Tea Party Movement can be directed left as well as right despite Obama’s and the Democrats’ seeming inability to seize the moment. Thus, what progressives need to demand is not just a rollback of reactionary attacks on unions and public service, but a counterattack on the rich and the corporate elite who are driving this country steadily toward plutocracy.
In California, Jerry Brown’s reaction to the breakdown of state budget negotiations has been to go on the road to promote his proposal to extend a series of current taxes for five years to help avoid doubling down on the nearly $12 billion dollars of cuts already approved by the legislature. If this fails, the cuts will be catastrophic for education and vital pubic services.
City College campus of San Diego.
For example, the community college system will take $800 million in cuts and 400,000 students will be kept out of college. Here in the San Diego Community College District, where I teach, we will have to cut over 1000 classes and shut out 27,000 students. In the San Diego Unified School District, where my son is in first grade, the cuts will be even more devastating with big layoffs, the elimination of crucial programs, and the gutting of our children’s futures. Add to these education cuts, devastating blows to essential services for the elderly, disabled, and sick as well as the closing of state parks, and the total elimination of many other valuable programs.
This is all happening in a state where the richest 1% of Californians is doing fantastically well while the rest of us continue to suffer. Specifically, in the Golden State, the top 1% of earners walked away with over 40% of the Obama extension of the Bush tax cuts. In contrast, the bottom 20% of earners (those who make $14,000 and under) will take home about 3% of the share. Thus, at a time when the California state budget deficit is over $20 billion, the top 1% of earners in California will take home an additional $9-14 billion depending on who is doing the estimate.
This cowardice on the part of Obama and the Democrats helped continue the transfer of billions of dollars to the wealthiest Americans and the most powerful corporations at a time when the gap between the rich and the poor is at historic levels and American corporations just experienced their best quarter on record.
So much for a New Deal for the new century.
In this context, if rage cannot be directed at the top (where all of the resources are going) the blame needs to be channeled elsewhere. Thus, with larger budget deficits at the federal and state levels, the right has skillfully created a new privileged class—public sector employees. Hence, all the talk of late in the national media has moved away from Wall Street and the economic elite who, by the numbers, are the folks who benefited from the economic crisis while most of us saw our standard of living decline.
Now, according to the current wisdom, public sector workers are the folks who “have it all” while those in the private sector scrape by with less. Why worry about entrenched plutocracy when you can take it out on kindergarten teachers? Why rail against the power elite when you can bag on janitors and office workers? Who needs class resentment when you can drag your neighbor down in the hole you’re in? In sum, we have a 1930’s-like economic crisis with no New Deal populism. Not a pretty picture for unions, public sector workers or those who value public services.
All of this is inevitable, even in liberal California, we are told, because the people just won’t stand for new taxes? Or will they?
Students from San Diego Community College protest cuts.
According to a recent poll done by Tulchin Research, Californians overwhelmingly support taxing the top 1% of earners to help fund education and vital public services. Specifically, 78% of Californians favor taxing the top one percent, with 53% strongly supporting the idea.
Think this is only true of our liberal neighbors to the north? Think again. 78% of San Diegans support taxing the top 1%. Even the conservative Central Valley supports the 1% tax on top 1% with 71% of those polled in favor of the proposal. Perhaps most surprising of all, 60% of Republicans statewide support taxing the rich. The idea polls well across racial and gender lines without a single demographic group opposing the notion.
And it’s not just taxing the top 1% that polled well. Tulchin Research found that 73% of those surveyed were in favored of closing corporate tax loopholes, 71% favored a 5% surcharge on individuals making over 1 million dollars a year, and 67% favored a 10% surcharge on millionaires. Even touching the third rail of California politics, Proposition 13, by reassessing commercial properties and taxing them at their current market value is favored by 66% of Californians. Rounding out the poll, Tulchin found that Californians also favor a 10% tax on oil extraction and raising the corporate tax to 10% by 64% and 51% respectively.
With these numbers, it is puzzling why Jerry Brown continues to promote a plan for extending largely regressive taxes that is polling lower than all of these far more progressive tax measures and would be far more likely to lose. What the Tulchin poll shows us is that the people of California are well aware that the folks at the top aren’t paying their fair share and are willing to take it out of their hides. We are in a rare moment of political clarity. California Democrats need to figure this out or they will waste a historic opportunity, and we’ll all be the worse for their mistake. Rather than hugging Republicans as the Governor recently advised us to do, we should be kicking them in the ass along with every elected Democrat who is too timid to fight.
As someone once said, what seems like a long time ago, this is our moment, this is our time.
Jim Miller, a professor at San Diego City College, is the co-author of Under the Perfect Sun: The San Diego Tourists Never See and Better to Reign in Hell, and author of the novel Drift. His most recent novel on the San Diego free speech fights and the IWW, Flash, is on AK Press.
{ 29 comments… read them below or add one }
Welcome to the Rag, Jim . . . this is a great post. The “lack [of] all conviction” is indeed one of the grim aspects of our situation. And I believe you have identified the right target to go after in that 1%, certainly in California. Sadly, you have also identified one of the biggest obstacle: the success of “. . . The right [to] skillfully created a new privileged class—public sector employees.” They are the kick-me toys of this demonization process. We need to urge the “private sector” workers that the right is pandering to, to get organized, not resentful. The message needs to be that they deserve more, and not taken away from other working people.
Rant Rant . . . y8ours was well-said, and I look forward to reading more. Thanks.
1) On campaign contributions – “Money is the mother’s milk of politics.”
2) On lobbyists – “If you can’t eat their food, drink their booze, screw their women & then vote against them, you have no business being up here.”
Jesse M. Unruh, wikipedia
Why the system no longer works – all politicians today have a fantastic comprehension of the first – & most have No comprehension of the second.
Most Politicians today are just SOLD-OUT tools.
Excellent analysis. The proposed budget cuts on both the state and national level are directed toward housing, transportation, education, health care- the very things that represent the successes of the New Deal. It is no surprise that conservatives are gunning for these. I don’t know why the democrats are selling out when polls of every political stripe support higher taxes on the rich, closing corporate loopholes, maintaining social security and medicare, funding Planned Parenthood, etc etc. The dems have the people on their side and look at what they are doing with that.
Clearly the rules that will be governing liberal democracy have changed and the middle class are late to the table to find out they don’t have a seat. I am certain that Governor Brown understands the new rules and his policies are aligned with this “new order” where monied elites intend to finish the project begun in earnest by the Reagan administration. For the rest of us polls offer little negotiating power going forward and are unlikely to build a coalition between the middle and the right. The best we can hope for is to look forward to re-adjusting our lives to having less and to see if un-friendly municipal policies, such as San Diego has, towards multi-family housing can be abated. Education is going to be a luxury for most families now that will need to send their children to private schools and directly subsidize this. The public common is dead and maybe it is nothing less than we should expect; to be launched into a configuration of life where you pay for quality. For those who cannot pay will mean accepting that they now belong not to the Great American Middle any longer as we understood it in the past but are now the Great American Underclass. The alternatives to accommodation are way to brave for the type of political culture we have become and to effect any meaningful change will require so much more activism in the streets, now made harder by being forced to work harder for less and with little time for anything else. The divide and conquer tactics of the rich succeeded in taking us out of the game .
For many of us, this might be a more useful example of plying our hopes for new strategies for living as a permanent underclass:Venezuelan President Sets Legal Framework for Shared “Multifamily Property”
Thanks for contributing! And I hope to see your analysis here on a regular basis.
Taxation of the rich has been a talk, talk no deal for a very long time. One solution that seems to be overlooked is giving the rich an alternative to taxation. Seriously the money some 1 % ers are making is astronomical so what if ? Instead of saying , ” Okay were going to take more from you .” We said ” Listen, some programs need help. You have the capacity to help with some public and private sector funding. Instead of creating more taxation which ultimately leaves a nasty taste in everyone’s mouth here is a fund of which you can donate funds which in turn will allow everybody a much needed break from taxation and a deduction to allow you even greater profits. ”
Allowing even greater donations.”
I have never in my 53 years heard anyone try something other then taxation to make American lives better.
I personally know a couple Billionaires who do this in their respective home Country’s and have commented, to me, they would do more if they were not taxed for everything and or threatened by a tax if they offer donations and of course the fund would have to be managed appropriately and better then our taxes are managed by our Americant Governing body’s..
Discretionary taxation is not likely to be well received by the security state or the Pentagon which are used to having the lions share of Government Revenues. This is a rich person’s pipe dream. If your billionaire friends want to give money to the tax deductible programs of their choice in the U.S.A., do they not have that option already? Talk is cheap. We see where the rich give their money when given personal agency; to museums and associations that increase their personal business networks to increase their wealth. This will not aid families living in poverty or lower income families barely making ends meet who need government largess. We were told that trickle down economies and unregulated industries would promote lower prices and competition. We have seen that it has destroyed native job security for cheap consumer goods and has built a wealth built on financial capital. Good government protects us from the abuses of an unfettered marketplace. It is the image of a socially responsible society.
I’m with you Gary. Discretionary taxation is what the rich already receive in the form of tax loopholes, corporate subsidies,etc.
Well said, Jim! Economic injustice is THE issue of our time, and people may finally be just about ready to rebel against the greed of the corporate and wealthy elite. It’s about time they start paying a fair share for the labor, infrastructure and stable, civilized society that made their wealth possible.
Looking forward to reading lots more Jim Miller in my favorite rag!
Jim,
Thanks for outlining the gap between public opinion and the political stances of many (not all) of the elected Democrats. We do see an increase in the amount of lip-service that many elected Democrats are giving to the positions you advocate. We don’t see much effort by them to mobilize street demonstrations, sit-ins, or any serious pressure politics (let alone, imagine, anything approaching open rebellion or revolt).
We don’t see Dems in the Senate, for example, putting forward federal budget proposals that would simultaneously restore progressive tax rates for the rich while EXPANDING jobs/economic stimulus spending/investment, and then demanding that the House meet THAT somewhere in a compromise zone. No. What the Dems are in fact doing is letting the Republicans take the heat for austerity (and militarism) proposals which are actually favored by the big corporate campaign donors. And the Dems are going along with the overall austerity and militarism scheme. This is nothing new, of course. The trend toward adoption of more and more of the historic legislative and policy agenda of fascism, supported by both major parties, is very clear. The “bi-partisan” support for the Patriot Act is just one example. The “bi-partisan” consensus, currently, that it is LEGAL for states (or the feds) to pass laws that attack collective bargaining rights is another example. You don’t see the elected Dems going on TV and saying that such laws violate international law — treaties which we have signed and which are higher laws therefore (ILO Conventions, Universal Declaration of Human Rights, etc.). A key policy of fascism is the outlawing of unions.
It is not enough to advocate that Dems who won’t fight for pro-workingclass positions should be voted out and replaced with better Dems. It is high time for our country to go through the sort of major realignments that we saw when the Republican Party was born in the mid-1800s. Less dramatic realignments of course also took place around the push for the New Deal and after the passage of the Voting Rights and Civil Rights Acts during the Johnson administration.
Groups like Move-On, and Progressive Democrats of America and Democratic Socialists of America need to actively seek to build a new working coalition with groups like the Green Party, and all the other left political parties and left single-issue organizations. I don’t think it has to be an either/or choice of whether people should stop working inside the Democratic Party totally. But the left of the Democratic Party does need to break with support for pro-corporate Dems running against Republicans and back progressive independents and third party candidates instead, whenever it has not been possible to give the nomination to a left Dem.
I don’t think that political parties and elections are the main place that the labor movement and other progressives need to put our energy. Independent militant mass actions, especially direct actions, are much more of what drives social change and progressive electoral results and progressive legislation tend to mostly be by-products of class struggle and popular mobilizations, from the grassroots. So, please don’t get me wrong. Eletoral work is only one arena for mass education and struggle.
We seem to be clearly at this time thwarted by the domination of corporate control of the major news media (which ought to be the constant focus of a lot more protest activity), on one hand, and, on the other hand, by the reluctance of millions of rank and file Democrats (and the major groups on the left inside the Democratic Party) to bolt from any and all support of a corporate agenda.
Here’s a thought for you, just to illustrate how far to the right the whole “debate” has become (between the Dems and Republicans, as reported by the corporate press). Instead of a slogan to “tax the rich”, why is there no mass movement to use the legal power of eminent domain to seize the assets of the rich and throw a lot of their asses in prison? Clearly, the actions of the rich constitute a public menace. Why is there no serious and widespread discussion about ending their rule of our society?
Nice article. Here’s the condensed version:
Politics is storytelling.
Stories need villains.
If one side fails to provide a villain, the other side will.
The side that best defines the villain, wins the argument.
Trying to appear “reasonable” is a losing strategy.
In the long term, the government can’t spend money it does not have to enrich the current generation’s consumption and greed at the expensive of future generations.
We are currently borrowing 40 cents of every $1 that the federal government spends.
Passing on massive future debt to our children and grandchildren is not a reasonable fiscal strategy.
Look at Europe….. they have figured this out and cut spending in Greece, Portugal, Ireland, England, Italy,etc. We will soon learn this in the US. Wait until the US must pay two or three times the current interest rate on our debt, and watch the cuts needed under this situations.
One demand that could lower our spending is for U.S. political parties to abide to standards of international law and to make administrations criminally liable for violations of State Sovereignty, human rights, and treaties. To back this up we need the prosecution of Presidents and policy makers who violate these standards including imprisonment. This prosecution should also extend to corporate captains who similarly violate international laws and imprison violators. If U.S. courts cannot accomplish this then international tribunals can, at a minimum, try those violators “in abstentia” for all the world to see. This is nothing less than just and will change the political pressure from aggression to defense which is what a defense department is supposed to be in the first place. This could turn around our political culture by exerting international pressure back in the U.S.A. and if our culture could be weaned away from militarized diplomacy, would likely reduce our costs by likely 30% while still maintaining a defensive military. The loss of business to those companies currently profiting from fat military contracts could be re-directed to government contracts for appropriate technologies that could benefit our own people with new industries and jobs and improved infrastructure and reduced petroleum dependence. This was the carrot that Obama waved in front of our faces during his last election campaign! To take your assumption that much of the blame for our woes falls on the greed of our consumerist citizenry is avoiding the biggest source of the problem.
I disagree with your first sentence, RB, unless you’re implying that the no. 1 tax taker, the Defense Dept., is the one who is spending money we don’t have “to enrich the current generation’s consumption and greed at the expensive of future generations.”
Is that what you mean?
If not, where do you think the money is going? Don’t say Soc.Sec. and Medicare
as they’re self-funded at this time, if the money would have stayed in the Soc. Sec. trust funds and not taken to pay the other govt. bills, including the Defense Dept. which is been no. 1 taker for many years.
You talk about cutting spending, when the intake of taxes has gone done tremendously since the 50’s and that’s part of why we’re in the trouble we’re in.
Note the surplus going into the Bush administration.
When families, businesses, countries, etc. have money problems, they look to other sources of income than where their current source is, in addition to saying “let’s cut out this and that.” So let’s look to other sources to help get the tax money in to help pay the bills.
Robert J. Samuelson who writes for NEWSWEEK has come up with a great idea which is to have the “ridiculously low” 15% tax rate on corporate dividends and capital gains GO BACK UP to the rate of 28%; he calls the current rate”a giveaway to the rich that makes no sense as economic policy. The wealthiest 1% of Americans receives 2/3 ofcapital gains and dividends.”
The general tax rate for millionaires has been as high as 90+% in the ’50’s and the country was prosperous. It’s slowly gone down to less than 30%, so why don’t we look at raising that up again to get more revenue coming in?
Yes, cuts need to be made, and the first budget to be cut should be the Defense Dept.’s, with investigators hired to comb through the contracts that are helping the execs and board of directors of the big defense contractors.
Bottom line, we should be looking for more sources of income than just looking at where to cut.
I have no problem with cutting the defense department, ending these current wars, and closing cold war bases in Europe. I also believe tax increases will be included in budget reform.
Thanks for calling out the cowardice displayed by President Obama, Gov. Brown, and most other Democratic politicians.
Obama, Brown, and all the other Democrats in office have seen all the polls mentioned in this article. These guys know that most Americans support higher taxes on the wealthy. Their failure to act accordingly shows whose side they’re really on.
Aren’t Republicans the ones who are supposed to be rich people’s lackeys? What the hell is going on with the Democratic Party?
While was walking the dogs this morning, I heard a sobering statistic.
The national debt went up by $54 billion during just the last eight days of trying to find a deal to cut $38 billion over the rest of the year.
Some barstool economics shall we call it from my econ class at Penn State.
Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:
The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.
So, that’s what they decided to do. The ten men drank in the bar everyday and seemed quite happy with the arrangement, until one day, the owner threw them a curve. ‘Since you are all such good customers, he said, ‘I’m going to reduce the cost of your daily beer by $20. Drinks for the ten now cost just $80.
The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still drink for free. But what about the other six men – the paying customers? How could they divide the $20 windfall so that everyone would get his ‘fair share?’ They realized that $20 divided by six is $3.33. But if they subtracted that from everybody’s share, then the fifth man and the sixth man would each end up being paid to drink his beer. So, the bar owner suggested that it would be fair to reduce each man’s bill by roughly the same amount, and he proceeded to work out the amounts each should pay.
And so:
The fifth man, like the first four, now paid nothing (100% savings).
The sixth now paid $2 instead of $3 (33%savings).
The seventh now paid $5 instead of $7 (28%savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 (22% savings).
The tenth now paid $49 instead of $59 (16% savings).
Each of the six was better off than before. And the first four continued to drink for free. But once outside the restaurant, the men began to compare their savings.
‘I only got a dollar out of the $20′, declared the sixth man. He pointed to the tenth man,’ but he got $10!’ Yeah, that’s right’, exclaimed the fifth man. ‘I only saved a dollar, too. It’s unfair that he got ten times more than I!’
‘That’s true!!’ shouted the seventh man. ‘Why should he get $10 back
when I got only two?
The wealthy get all the breaks!’
‘Wait a minute,’ yelled the first four men in unison.
‘We didn’t get anything at all. The system exploits the poor!’
The nine men surrounded the tenth and beat him up.
The next night the tenth man didn’t show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn’t have enough money between all of them for even half of the bill!
The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.
I like the story. Good to know there is common sense economics going on at Penn State. My son has Penn State and their physics department on his list of colleges, and we plan to visit there this summer.
Penn State is one of the greatest places on earth, offering an outstanding education and too many activities to mention to give them justice. Good luck with the visit.
Have you heard Warren Buffett describe how he pays a lower tax rate than his receptionist? How do the guys in the bar explain that? Or are they too drunk to understand it?
As for how much Warren Buffett pays in taxes, do we know what his take home pay is? He might receive nothing in salary, and account for his earnings through capital gains and such, in which case the rate is, what, 20%? So, while his rate could be lower than his receptionist, I’m not sure their tax bills are going to be similiar.
You’re on the right track. Buffett, like a lot of top earners, gets most of his income in the form of dividends on all the stock he owns. That dividend income is taxed at 15% thanks to the Bush tax cuts. Closing this loophole would add billions to the Treasury.
There’s another crop of billionaires who get much of their income through hedge fund profits. Those guys also were able to finagle a special, low tax rate on those hedge fund profits. Again, closing this loophole would add billions to the Treasury.
Bottom line is many at the top have the system gamed so they are pulling literally thousands of times more money than most people, but paying a lower overall tax rate. The barstool economics bit kinda glances over this glaring injustice.
Dividend income is taxed twice. Corporate earnings are taxed (the first tax). These after tax earnings are either retained by the company or transferred to the owners as dividends. Taxing dividends is a second tax on corporate earnings.
Taxing dividends is double taxation not a loophole. In addition, all dividend income earned in a retirement account is taxed at the marginal 28% individual rate.
It’s the corporation that is taxed on the corporate profits, and it’s the stockholders getting taxed on the dividends. That is not double taxation. Corporations and their stockholders are clearly separate entities. For example, stockholders are not subject to any liability incurred by the corporation.
As for dividends being taxed at 28% in retirement accounts, that’s not true for Roth IRAs, which are funded by after-tax money and therefore not taxed at all.
A different parable of the taxes:
A unionized public employee, a member of the Tea Party and a CEO are sitting at a table. In the middle of the table there is a plate with a dozen cookies on it. The CEO reaches across and takes 11 cookies, looks at the tea partier and says,”look out for that union guy, he wants a piece of your cookie.”
You got that correct parable Annagrace! Basta ya de la locura militar!
The 10th man has been drinking overseas for quite a while. He moved his company & its jobs out of the United States. His firm, incorporated in the Cayman Islands, pays ZERO income tax. Seems downright un-American.