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Stop calling it class warfare
Robert Reich
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Kai Ryssdal: President Obama went to the United Nations today. In amongst his thoughts on the Israeli Palestinian question were some suggestions about the global economy: Urgent and coordinated action is what the White House wants.
As you know, the administration released its plan to cut the deficit earlier this week, which has brought us straight back to the same old narrative: taxes or spending cuts?
And that brings us to commentator Robert Reich.
Robert Reich: It is not "class warfare" to ask the rich to pay their fair share of taxes to bring down America's long-term debt.
After all, the richest 1 percent of Americans now takes home more than 20 percent of total income. That's the highest share going to the top 1 percent in 90 years. And they now pay at the lowest tax rates in half a century.
Before 1981, the top marginal tax rate in America was more than 70 percent. And now it's half that, and besides, most of the very wealthy take their income in capital gains. And that's now taxed at 15 percent -- down from 35 percent as recently as the 1980s.
Anyone who says the American economy suffers when the rich pay more in taxes doesn't know history. We grew faster the first three decades after World War II -- when taxes were higher -- than we have since.
And look: If the rich don't pay their fair share, the rest of us have to bear more of a burden. And that burden comes in the form of either higher taxes or fewer public services.
If anything, the people who have declared class warfare are those at the top of big corporations and Wall Street -- and they've declared it on average workers. The ratio of corporate profits to wages is higher than it's been since before the Great Depression. And even as corporate salaries and perks keep rising, the median wage keeping dropping, and jobs continue to be shed.
I mean, you've got the chairman of Merck taking home $17.9 million last year. And then this year Merck announces plans to boot 13,000 workers. The CEO of Bank of America takes home $10 million, and the bank announces it's firing 30,000 workers.
Call me old-fashioned, but the way I see it, we've got a huge budget deficit and a huge jobs problem. And under these circumstances it seems to me people at the top who have never had it so good should sacrifice a bit more, so the rest of us -- who haven't had it as bad in decades -- don't have to sacrifice quite as much.
Ryssdal: Robert Reich was secretary of labor for President Clinton. His most recent book is called "Aftershock: The Next Economy and America's Future." Next week, David Frum. Until then, your thoughts should you care to share them -- write to us.
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Bill Bojanowski:
Unless you have a time machine, my statistics are fixed and will never change because they've already happened.
But, yes, if GDP shrinks in the future and government spending remains the same, the statistics will be higher. That is the problem! A fair tax system, let's say a consumption tax or a flat sales tax, ensures (1) everyone pays their fair share, even the "black markets" that pay no taxes today (drug trade, mafia revenues, etc.), (2) an entity doesn't pay taxes if it doesn't spend its money, that's only fair right? (3) finally, the people will have control again of how much money the government receives and forcing the government to spend wisely (just like we all do with our household budgets, right?).
Mike B:
I would be most happy and fine with eliminating the government education system. It is flawed, and its end product, by-in-large, are adults who are believe the USA is a democracy. They are taught the government will provide all they need (like interstates, shelter, safe cars, etc.). It is not the government's job to be the great babysitter in the sky -- the great problem solver.
The basic function of government is to provide law, order, and defend the country's sovereignty (and its citizens) from foreign invaders.
All this quoting of statistics by all sides reminds me of a saying: "There are lies, damn lies, and then there are statistics." It is worth pointing out that you could tax everyone who makes over a million dollars at an automatic 50% rate, and you would still only raise enough money to cover 10% of our deficit. The issues is unfunded entitlement programs, promise made by the government it cannot keep. This issue was raised 20 years ago by Tsongas & Rudman when they founded the Concord Coalition. Is anyone listening? Reich et. al. have often been accused of wanting to redistribute wealth thru tax policy. That begs the issue; the last 30 years have seen, because of tax policy, a huge redistribution of wealth into a small percentage of the population. It is this concentration of wealth and power into the hands of a few that bothers me.
Perhaps we can all agree is that America's strength lies in being a democracy. The government is intended to be of the people, by the people and for the people. Policies that favor the rich thus contradict the very bedrock principles of American. Policies favoring the poor and middle class are a natural result of a democratic government with a poor and middle class majority.
It seems to me that the rich have been very successful in promoting an agenda that is not in the best interest of the majority of American citizens. The fact that the President's deficit reduction plan is being attacked by the policital wing of the wealthy (republicans) is a testiment to this disproportinate power of the wealthy.
I applaud President Obama's call for the rich to do more to reduce the nation's budget deficit. Republican's that say tax increases for the wealthy are off the table will simply not get my vote.
Class warfare? Of course! Did Obama's deficit reduction plan start it? Don't be an idiot - it's the only thing that keeps the 1% in power.
Of course this is class warfare! The wealth against the middle class and poor! What do the repubes want to do? Hold a bake sale to pay for programs? The time for action is NOW! The middle class and the poor should unite against the destructive force of the repubes and their ilk!
Ah, but everyone has a different definition of what "fair" is. I personally could never see a tax rate above %50 as being fair. I also don't see taxing income earned through dividends or capital gains at a different rate as fair.
Also, to call the wage ratio unfair, you have to prove that the individuals at the top aren't actually worth more to the company than those at the bottom. I'm not saying that they are/aren't; I'm saying that shocking people with the difference isn't a reasonable argument.
Thanks for the comments Prof. Reich, I do enjoy hearing them.
The Republicans are saying that our tax system unfairly has the rich paying the most. The Democrats say that the rich are not paying their fair share. Thw solution? Elimination of the 'income' tax, replacing it with a flat federal sales tax. Everyone pays the same fair percentage, and also addresses another government created issue... spending beyond limits! With a federal sales tax, savings are not taxed. It encourages savings for things we now too quickly purchase on credit. Can't be more fair than that, nor more right!
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