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Raising Taxes Helps The Rich

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Class Pyramid by Self

 The Gilded Age of America occurred after the Civil War and coincided with the industrial revolution of that period in which great wealth was concentrated to the upper classes.  The wealth concentration to the very few resulted from the owners of business reaping most of the benefits of the productivity of the working class.  The end of the Gilded Age coincided with the Panic of 1893 and a deep depression. The depression lasted until 1897 and marked a major political realignment in the election of 1896. After that came the progressive era accompanied by legislation to regulate the excesses of unfettered capitalism.

 

Approximately 30 years later we suffered the worst economic depression in our history because of the excesses of the 1920s unregulated capital and banking industries.  Again the government stepped in to regulate the markets through the FDR administration which prevailed for almost 50 years.  The Republicans took control of government in 1981 and almost 30 years later we are again back into economic crisis.  Do we now understand what the Republicans have done to our economy?

The reason all of this happens is because the productivity of America is not shared equitably between the working class and the ownership class.  And when the working class runs out of money the economy has to tank as it has done several times in the last 140 years.  Without government oversight and redistribution of wealth through a progressive tax system, the ownership class is actually self destructing by stripping the working class of the ability to participate in the economy through consumption and investment.  That is why we must help the rich predatory class understand that it is actually suicidal to continue the economic policy of the Republicans for the last 140 years.

One of the reasons the United States did not fall back into an economic depression after WW II was because there was a large underground economy during the war that made fortunes for those who had previously not had the opportunity to accumulate wealth.  That coupled with the shift to a consumer oriented economy allowed the U.S. to experience unprecedented growth from 1946-1962.  Unfortunately the military budget has allowed for the skewing of wealth back up to the corporate class and the tax cuts of the Reagan and Bush regimes have again stripped the working class of its ability to participate fairly in the economy.

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When the middle class gets squeezed, mortgages are foreclosed and business loans default on a massive basis.  This ultimately leads to unregulated and uncontrolled panic selling.  The lesson is very clear.  Human nature is programmed to accumulate as much material wealth as possible to the detriment of the overall economy so it is incumbent upon government to prevent human instincts from destroying our economy.

Wealth and productivity are a zero sum game in this material world.  Wealth classes are best described geometrically as a massive pyramid.  Most of the pyramid area at least in total numbers are below the wealthy class who ironically depend upon the lower part of the pyramid to preserve their wealth.  That is where most of the productivity and consumption lies.  Without a strong middle class, the pyramid will, like any other pyramid scheme, collapse and destroy those who have benefited from it the most. It almost happened in 2008 and will surely happen again if we do not take steps to change this conundrum. 

Most of the wealthy class are addicted to money just as any other substance or emotional addiction.  This addiction can only be broken as it is in any 12 step program by a tough program of recovery which can only be enforced by the government starting with a substantial increase in the income tax rates for the wealthy.  If the pyramid collapses, the wealthy will also go down and reach their "bottom" with little chance of recovery.

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www.paradigmventure.com

Sheldon Drobny was the co-founder of Nova M radio and Air America Radio. He has supported many philanthropic causes. Mr. Drobny specializes in business and tax matters and is admitted to practice before the U.S. Tax Court as a non-attorney. Less (more...)
 

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