Views » November 20, 2007
Tax and Spend? Hell, Yeah!
Why does anyone need $50 million a year? What do you do with it–buy five houses in Aspen like Enron’s Ken Lay did?
I have a proposal for the next Democratic debate–hell, the next Democratic and Republican debates: Get rid of the TV personalities and have Paul Krugman moderate the thing.
That way, “Meet the Press” host Tim Russert won’t be asking Rep. Dennis Kucinich if he’s really seen a UFO, or Sen. Barack Obama if he believes in E.T.s. And NBC anchor Brian Williams won’t be asking Obama what he plans to be for Halloween. (And why is that what he asked the black guy?)
All Krugman would have to do is ask questions based on his important new book, The Conscience of a Liberal, which unabashedly calls for a new New Deal and for “expanding the social safety net and reducing inequality.” He argues that the central danger confronting us is the ongoing transfer of wealth to the very rich, which has led to massive economic and political inequality.
This has been the determined and successful agenda of the neocon movement. But with all their “free market” mumbo jumbo, neoconservatives make the rise of the super-rich seem inevitable. If hedge fund managers and Wall Street traders making anywhere from $50 million to $1.5 billion a year is simply the natural order of things, then what can the rest of us do but be fatalistic? Well, Krugman is here to lay out what should be the Democratic platform.
First, tax these bloodsuckers. Why does anyone need $50 million a year? What do you do with it–buy five houses in Aspen like Enron’s Ken Lay did? Krugman provides a historical overview of the role that taxes played in reversing the Gilded Age’s concentration of wealth among the super rich from the 1930s through the ’70s. But the Reagan and Dubya tax cuts “delivered disproportionately large benefits to upper-income households.” Clinton raised taxes on the rich, but the economy–and the rich–did just fine in the ’90s.
Second, boot those tax cuts. Krugman reports that if the Bush tax cuts for the very rich expire in 2010–as they are currently slated to do–there would be an additional $140 billion rolling into the national treasury by 2012. That’s enough to implement universal healthcare.
Third (and how’s this for a winning proposal), eliminate the loophole that allows hedge fund managers to classify their earnings as capital gains, which are taxed at a 15 percent rate instead of the normal 35 percent.
Possibly one reason some American corporations pay their CEOs obscene money and pornographic severance packages is the decline in corporate tax rates. Taxes on their profits have fallen by a quarter over the past 30 years, and additional loopholes let corporations avoid taxes by shifting their recorded profits to branches or operations overseas.
What’s the first thing we should spend this revenue on? Healthcare. That’s because healthcare is one of the principal–and very expensive–areas of inequality in the United States. While Rudy Giuliani brays that we have the best healthcare system in the world, Krugman compares U.S. per capita spending with Canada, France, Germany and Britain. Guess who spends the most? And guess who has the lowest life expectancy? In fact, the World Health Organization ranks the U.S. healthcare system 37th in the world.
Krugman debunks the usual trash one hears neocons spouting about universal healthcare, including the bogus scare tactics about “long waits,” and argues that, in economic terms, single-payer is the way to go. It has low administrative costs and enables bargaining over prices. But he acknowledges the possible political obstacles and offers other options, some of which have been proposed by John Edwards, Obama and even Hillary.
But Krugman’s foundational argument is that we must discredit the neocons’ insistence that government regulation is bad and that the state’s intervention to moderate the excesses of capitalism is unnecessary. He shrewdly notes how movement conservatives have for 40 years twinned this mantra with race-baiting policies and rhetoric that portrays poor people of color–not the rich white fat cats–as the problem.
Krugman maintains that a majority of Americans are ready to revive the demand that it is government’s responsibility to protect its citizens and to prevent the consolidation of a plutocracy. Economic inequality has further corrupted our politics, but Krugman ends his book on a positive note: Movement conservatism has become “intellectually decrepit” while progressive politics gathers real steam.
For years, Republicans tarred Democrats as “tax and spend liberals.” Just as gays and lesbians reclaimed the word “queer” as a move of empowerment, Democrats should embrace the “tax and spend” moniker. Taxing and spending is what advanced, industrialized countries do. And they do it to promote equitable societies.
Yes, tax the rich and big corporations and spend it on the rest of America: Let’s spend it on healthcare for all, on decent schools for our kids, on environmental protections, on a consumer products safety commission, on universal pre-school, on a cure for AIDS and, most of all, let’s tax and spend to develop paths to peace.
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Susan J. Douglas
Susan J. Douglas is a professor of communications at the University of Michigan and an In These Times columnist. Her latest book is Enlightened Sexism: The Seductive Message That Feminism's Work is Done (2010).
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