Sen. Warren has been brilliant in explaining that the government pays for so many services and programs that subsidize corporations and support individuals,yet the right wing oligarchs have convinced so many that taxes aren't necessary.What the Paul Ryans basically are selling is snake oil, that citizens can get government services and support without having to pay for them,particularly those in upper brackets who benefit most
My guest today is Mark Karlin, editor of BuzzFlash at TruthOut. Welcome back to OpEdNews, Mark.
JB: We last spoke in September. There's been a lot going on in the interim. I'd like to talk about your recent OpEd, Under Eisenhower, the Top Tax Rate Was 91 Percent. Was He a Socialist?[1.20.16] First of all, let's talk about that headline. Surely, that 91% top tax rate figure is hyperbole, no? President Eisenhower was a lifelong Republican, after all.
MK: No, it is not hyperbole. This is fact. It's not debatable.
Remember, however, that the US has marginal tax rates, which means that the 91 percent tax was applied only to income earned above a certain level. As my recent commentary noted, PolitiFact stated, "A look through the records shows that top earners in the eight years of Eisenhower's presidency paid a top income tax rate of 91 percent. It was even a bit higher before he took office." The reality is that it sounds so unbelievable that the most wealthy in the United States paid more than 90 percent federal tax for their higher income earnings because the US has moved so far to the right in cutting top marginal rates. Obviously, Eisenhower was not a socialist, but the tax rate of above 90 percent on upper end earnings during his two terms is just not disputable. It's a matter of public record.
JB: So, if that's the case and the whole discourse has taken a rightward turn, then, that would still make Bernie along with his proposals an outlier compared to the other candidates, correct?
MK: Anyone running for president who proposes raising taxes is an outlier, yes. The US has been brainwashed by the well-financed efforts of the right wing oligarchy - the strategic use of think tanks the media - to believe that low taxation and the privatization of public services that taxes pay for will lead to some sort of Ayn Randian utopia of wealth for "hard working" individuals. However, as Thomas Pikkety documented in the seminal book, Capital in the 21st Century, wealth in the Western world is becoming increasingly concentrated in the hands of those who inherit it. These people, such as the Kochs and the Trumps of the world, then advocate for lower taxes on the wealthiest. As a result, we have descended from a 94 percent top marginal rate during World War II - for income earned above $200,000 during 1944-45 (not adjusted for inflation) - to 39.6 percent for income earned above $413,000 in 2015. Of course, this does not include the use of loopholes and the lower taxation on capital gains earned from investments. The latter accounts for much of the income of the wealthy, resulting in a much lower tax rate for gains in the stock market, for example.
That is why Warren Buffett famously said that he paid a lower overall tax rate on his yearly income than his secretary.
JB: Now that's a jarring factoid.
MK: Elizabeth Warren has been brilliant in explaining that the government pays for so many services and programs that subsidize corporations and support individuals, yet the right wing oligarchs have convinced so many Americans that taxes aren't necessary. What the Paul Ryans of the world basically are selling is snake oil, that citizens of the United States can get government services and support without having to pay for them, particularly those in the upper brackets who most benefit from the public purse. Just ask the defense industry barons.
It's ironic that Eisenhower, a dyed-in-the-wool Republican who had Nixon as his vice president, ended his second term with the warning that the military-industrial complex could consume the US.
JB: Talk is cheap. Too bad Ike didn't actually do something about it before he left office. So, let's take a look at Bernie's tax proposals. How do they stack up with, say, the policies in the various Scandinavian countries, for instance?
MK: Bernie's got several tax proposals. Overall, his campaign has been kicking around a proposal for a top marginal income tax rate in the low 50 percent range. That would hardly be a dramatic increase from the current rate, and it would be 40 percent or so below what was the rate under Eisenhower.
Sanders has a number of tax proposals, including re-structuring of many taxes. He is for, as Elizabeth Warren is, a tax on financial transactions. He is also for other Wall Street taxes. Of course, he just released his universal health care plan that includes some taxes that are far less, in general, than premiums - even under Obamacare - to private insurance companies. Of course, he also supports cost restraints on health care services and pharmaceutical companies. Eliminating for-profit health care and the private insurance companies - along with putting price controls on big pharma - would cut billions and billions of dollars in medical costs.
As I pointed out in the commentary I referred to above, the Scandinavian nations actually have lower tax rates on corporations than the US. Furthermore, they are capitalist countries with a high bottom floor for social services, not socialist countries.
In the commentary, I noted that "according to the pro-corporate think tank, the Tax Foundation,'Denmark's top marginal effective income tax rate is 60.4 percent. Sweden's is 56.4 percent. Norway's top marginal tax rate is 39 percent.'" These are far less than the tax rates under President Dwight Eisenhower.
My wife and I were just in Sweden over New Year's and it is an extremely prosperous capitalist nation. We went to an island near Stockholm that was basically a suburb, and it had huge homes that looked like wealthy suburbs in the US. Yes, there is less of a differential in the Scandinavian nations between CEOs and workers, and they do have great social services and family and quality-of-life work laws. In the end, Sanders, however, is correct when he calls himself now a "socialist-Democrat." He's really just advocating for government to leave no one behind, and in order to do that the wealthy and Wall Street need to be taxed more - and tax loopholes have to be closed - but he is not promoting a dramatic tax increase.
The visible wealth in Stockholm should disabuse anyone who believes increasing marginal tax rates means people cannot be rich. After all, the top tiered tax rate in Sweden is only 56 percent. It's a bustling commercial city, except there don't appear to be neighborhoods there that have been left to basically rot. The primary difference with the Scandinavian nations is that the voter consensus is that government adds value to society in services and quality of life. In the United States, the anti-government paranoia and hatred infects such a huge segment of the population that people don't realize how much public services and programs have done for the nation.
JB: Several years ago, I read fellow Chicagoan Thomas Geoghegan's Were you Born on the Wrong Continent?: How the European Model Can Help You Get a Life [New Press, 2011]. I remember being amazed at how our oversized fears of socialism have blinded us to the massive benefits that citizens enjoy if they live in nations that cultivate healthy safety nets. It's unlikely that large enough numbers of Americans will travel to Scandinavia to see for themselves. So, how do we change the conversation so that people see the larger picture? That's the $64,000 question. The press certainly isn't helpful in that regard.
MK: First of all, socialism is one of those words that resonates with differing definitions or associations to different people. It becomes, as a word, an obstacle to discuss in a multi-faceted society because even most mainstream corporate journalists don't agree on what it means, based on how they use the word socialism.
Let's just, for a moment, not use the word socialism. If we mean the fostering of a nation where the government - through the use of using a very large percentage of its gross domestic product on social services for the common good and collecting revenue for such a purpose through a combination of heightened taxing policy on the rich and corporations and state-ownership of certain common resources and public commons property - provides a strong social safety net and creates programs and laws to enhance the quality of life of its citizens, then Geoghegan is talking about Scandinavia -- and, to a varying degree, some other nations in Europe.
In addition, we can include the cultivation and encouragement of cooperative enterprises that are worker-owned and -run, as well as alternative economic structures to capitalism.
This is more or less the concept that is that the basis of the Sanders concept of "Democratic-socialism." I personally hesitate to even call it socialism because it really is just government that provides for the common good of its citizens.
The problem in the US is that we have a longstanding strain of thought that government is the "enemy," or as Ronald Reagan infamously said, the best government is the government that governs least. Currently, on the right wing and among many independents, we have reached a frenzied antipathy toward government that has moved the nation to near implosion, due to failing to fund government needs such as maintaining public infrastructure.
I think the Sanders candidacy itself, whatever the outcome of his presidential campaign, has gone a long way toward putting these issues out in the public discourse. At first, the mainstream corporate media ignored him, but now they are forced to air his perspective (which is Scandinavian in outlook toward reducing income inequality and providing a state that serves the needs of all its citizens - but remember, this is within the framework of capitalism and the continuation of a very wealthy class, as is the case in Scandinavia). That is, in itself, exposing a multitude of Americans to the concept of a nation that is structured to benefit the common good, not just the needs of the "winners" in gladiator capitalism.
As for your question, if there are not more political candidates who raise such issues - and a presidential race is the most effective forum for using the media to educate the public, even if the media is resistant to the ideas that Sanders is articulating - then it will be hard to dispel the right-wing shibboleths and sense of post-Cold War fears about what in reality is not even socialism, but capitalism that exists within a certain set of laws that allow the state to accumulate and use dollars for improving lives of the entire population of a nation.
I must add that the cost of US militarization, surveillance and the maintenance of empire is another factor in sucking up treasury dollars that would otherwise go to meeting our most basic needs, like a water pipeline that does not poison children and adults with lead in Flint, Michigan.
JB: All good points, Mark. Anything you'd like to add before we wrap this up?
MK: Beyond the implications of racial bias in what led to 50 percent of Blacks in Michigan living in cities under emergency managers, which is the political coup by Governor Rick Snyder that essentially precipitated the Flint lead water catastrophe, Flint symbolizes how our nation's infrastructure is deteriorating to the point of threatening our health. We need to embrace a government that embraces the needs of its people, and that requires ridding ourselves of an Ayn Randian vision of taxation that every person is in it for themselves.
We are a national community, and we should financially support government at every level to meet our common needs and to improve the quality of our lives. Cowboy capitalism of unfettered oligarchy will lead to the further deterioration of our country.
Republican candidates keep talking about "restoring the American dream." How about going back to the '50s and a marginal tax rate of 91 percent under President Eisenhower for starters?
JB: Thanks so much for talking with me again, Mark. Always a pleasure.
My previous interview with Mark:
Perusing the News with Editor, Mark Karlin 9.7.2015
Joan Brunwasser is a co-founder of Citizens for Election Reform (CER) which since 2005 existed for the sole purpose of raising the public awareness of the critical need for election reform. Our goal: to restore fair, accurate, transparent, secure elections where votes are cast in private and counted in public. Because the problems with electronic (computerized) voting systems include a lack of transparency and the ability to accurately check and authenticate the vote cast, these systems can alter election results and therefore are simply antithetical to democratic principles and functioning.
Since the pivotal 2004 Presidential election, Joan has come to see the connection between a broken election system, a dysfunctional, corporate media and a total lack of campaign finance reform. This has led her to enlarge the parameters of her writing to include interviews with whistle-blowers and articulate others who give a view quite different from that presented by the mainstream media. She also turns the spotlight on activists and ordinary folks who are striving to make a difference, to clean up and improve their corner of the world. By focusing on these intrepid individuals, she gives hope and inspiration to those who might otherwise be turned off and alienated. She also interviews people in the arts in all their variations - authors, journalists, filmmakers, actors, playwrights, and artists. Why? The bottom line: without art and inspiration, we lose one of the best parts of ourselves. And we're all in this together. If Joan can keep even one of her fellow citizens going another day, she considers her job well done.
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Joan has been Election Integrity Editor for OpEdNews since December, 2005. Her articles also appear at Huffington Post, RepublicMedia.TV and Scoop.co.nz.