The protests on Black Friday of Walmart's treatment of their employees are encouraging, and Kossacks supported them overwhelmingly, but the heirs of Sam Walton—and others like them—have rigged the game in their favor. The country needs more than protests and strikes; we need legislation. The Walton heirs are wealthier than the bottom 41.5% of Americans. Think of it: these heirs have an aggregate net worth greater than that of the poorest 129 million Americans. (Much of the same information is found Here.) Can anybody not named Rush Limbaugh believe that this is good for the country?
The wealth of these people is so great that they can run people's lives—and they do. What is it that enables Walmart to dictate the terms of part-time employment? One word: recession. During the period from 2007 to 2010, the Walton family fortune increased by $16.2 billion (see the first link above), or about 22%. This happened during the worst recession since the great depression. During that same period, the median net worth of the American family fell by 38.8%. The rich are gaining; the rest of us are losing. More beneath the fold.
It is not my intention to bash the Walton heirs (though that would surely be a worthy aim). The problem lies with our broken tax system. It would be bad enough if the problem were just the individual income tax, but the middle class is also getting hammered by the Social Security tax, and by state and local taxes. (PDF) These topics are grist for another mill.
Economic recession is the secret weapon of the wealthy. It is paradoxical but true that recession serves their interests very well indeed. Recession means that employees must accept whatever crumbs the wealthy dole out, lest they get no crumbs at all. Recession, and the high unemployment that goes with it, guarantee that labor can be bought for near-starvation wages. The plutocrats just love high unemployment.
This is the primary reason that Republicans have stalled and obstructed in Congress. It is only a secondary aim to portray President Obama in an unfavorable light. Their primary aim is to prolong high unemployment, which keeps the cost of labor at the bare subsistence level. This is how the rich plunder the poor and middle class.
As an example, take the Republican obstruction of various infrastructure bills. The country needs infrastructure repair and upgrade. The country needs jobs. This hand-in-glove fit couldn't be more obvious, but we will get neither as long as the GOP has a say in the matter. What do you suppose their
motive excuse is, now that Obama has been elected to a second term? They will try to use deficit reduction as their reason. Where were they when the nation borrowed a trillion dollars to fight the Iraq war, which had no justification, and accomplished exactly nothing?
The truth is that the GOP and corporate America don't want unemployment to go down. Corporations—and the people who own them—benefit greatly from high unemployment because it lowers their labor costs. Far from being job creators, their economic interests are served by destroying jobs—especially jobs that pay a living wage. Poverty level jobs are perfectly OK with them.
The Republicans are adamant in resisting higher taxes on the wealthy. The insistence on lower taxes on the wealthy is not fueled by greed. In practical terms, the very rich have unlimited wealth already; their wealth cannot be spent in any ordinary sense. (1) The object, as explained by their puppet master Grover Norquist, is to starve the government of revenue. Lower government revenue means less government spending, which translates into fewer jobs, lower labor costs, and greater power for the wealthy. The US government is all that stands between the plutocracy and absolute power. Of course they want it to shrivel and die!
This is not to suggest that Republicans in Congress are part of a vast conspiracy. In truth, most of them are not bright enough to be trusted by the actual conspirators. No, our Congress is in the invisible grip of the plutocracy, who use their wealth to shape legislation. Legislators don't write laws; they merely approve laws written by the plutocrats. The voters could remedy this by voting the Republicans out, but that doesn't appear to be very likely any time soon. The Republican vote is secured by appealing to bigotry of one sort or another. The plutocracy, by and large, couldn't care less about religion or abortion or skin color, or the LGBT community. These issues are merely the means to hold the voters in line. The real goal has always been power.
Allowing the Bush tax cuts to expire and successfully passing tax reductions for the middle class are both quite doable. But we need more—much more. I am certainly not proposing this notion as an easy solution, but we need to raise taxes on the wealthy. I propose something that is easy to explain to the American people.
This would be a surtax on all household income beyond $250,000. "All income" would be interpreted literally. It would mean wages, capital gains, carried interest, dividends, gifts and inheritances, etc. The surtax would not be part of the mess that is our individual income tax code today. It would admit of ZERO tax breaks of any kind. There might be three marginal brackets: $250k to $1m, $1m to $5m and $5m up. We would start modestly, say 2%, 4%, and 6% for the three brackets. My back-of-the-envelope estimate is that this would raise something like $200 billion in annual revenue. (BTW, does anybody have an online resource that enables one to predict the revenue change resulting from a particular change in tax policy?)
The surtax would be automatically coupled with the median household after-tax income (in terms of constant dollars). If the average American taxpayer became more prosperous, the surtax rates would be increased incrementally. If it proved to be counterproductive, the surtax rates would go down, and could in theory disappear entirely. Instead of tax policy depending on the economic theories of Arthur Laffer or Grover Norquist, tax policy would be coupled with ... [Trumpet flourish, please] arithmetic! Why would the American people not want this?
The revenue from the surtax should be devoted to job creation, mostly infrastructure and education. When we reach full employment, the employees of Walmart (which I'm using as a proxy for corporate America) will be able to demand fair treatment, and get it.
Given the implacable opposition of Republicans, how can we make progress toward a sane tax policy? I think the answer must include educating the voting public. One recent diary (which I cannot find at this moment) suggests that 30% of the population cannot be reached by rational argument, but that leaves 70% who might be persuadable. It is probably too much to expect that we can take over the House in 2014. I'm not expecting a two year project, but rather a long term effort to curb our runaway plutocracy.
I would love to see, for example, a weekly one hour segment on MSNBC devoted exclusively to tax policy issues. Perhaps Rachel Maddow or Lawrence O'Donnell could set aside one day every week as Tax Day, or maybe a new weekend show could be created. (Heaven knows the market for prison shows is saturated.) The subject matter is important, rich in detail, and ought to be of great interest to the average citizen. Perhaps organizations like ITEP could be persuaded to become major contributors. The program could host occasional discussions or debates between its own experts and proponents of other ideas for reform such as a national sales tax (FairTax) or the Flat Tax or the Value Added Tax. Educating the American voter on the intricacies of our national tax system, and on ideas for reforming it, could play a major role in shaping a sane tax code. (BTW, I hope I don't appear to be advocating any of these three tax schemes. IMO, they are all horrible.)
Let the Preamble to our Constitution be our guide: "We, the people of the United States, in order to ... promote the general welfare, ..." Good government seeks the well-being of all citizens, not just the richest.
(1) If you have doubts about this, do some arithmetic. If the Walton heirs spent $50 per second (that's $180,000 per hour), 24 hours a day, 365 days a year, they would be unable to spend all the dividends from their Walmart stock. The weight of Koch brothers' fortune, if converted to $100 bills, would be 682 tons. Imagine 27,280 people each carrying 50 pounds of $100 bills. (About $2.27 million) Imagine a single file line with money carriers spaced four feet apart. That line would be over 20 miles long.