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?

By Susan J. Douglas

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.

• Help In These Times publish more articles like this. Donate today!
• Subscribe today and save 46% off the newsstand price!

• subscribe to print magazine

• stay in touch with our email newsletter

  Subscribe to our regular weekly e-mail newsletter. It's packed with updates on recent and upcoming stories, events, campaigns and things every progressive should be informed about.

   

• email this article to a friend

  Your Name Your Email Recipient Email

  Personal message Thought you might be interested in this article from In These Times.

   

  Please help us prevent spam by verifying the word you see in the image above

  Send to multiple recipients. Just separate each email address with a comma.

• Reader Comments

  “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?”

  One has to wonder if the US poor health is self induced.  Has anyone noticed all the fat people around in the US? While i am all for adequate health benefits for all, i think we should also be responsible for our own health. Eat right and exercise more. . .

  Calling the “rich” bloodsuckers” is not at all helpful. One wonders what the definition of “rich” actually is (someone with more money than me?)? Envy makes for a fat target.

  Posted by wolf on Nov 20, 2007 at 9:37 PM

  Just one quibble with your article. You said: “But he acknowledges the possible political obstacles and offers other options, some of which have been proposed by John Edwards, Obama and even Hillary.” If you actually go and read the health care plans of all 3 candidates, you’ll see that Hillary’s is actually more progressive than either Obama’s or Edward’s. It is definitely true that any of the democratic candidates will bring us better health care than we have had to date.

  I do like your proposal for Democratic debates. I would also suggest Keith Olbermann, or anyone who has any conception of what the Democratic party is all about, plus understands what issues Americans are currently most concerned about. I get increasingly angry that these debates are continuously moderated by neocon sock puppets. Perhaps one of the progressive persuasion should then be allowed to moderate the Republican debates then. But the best idea would be to go back to the old format and let the League of Women’s Voters again be in charge of Presidential debates. They alone seem to understand the seriousness of this format.

  Posted by CognitiveDissonance on Nov 21, 2007 at 12:14 AM

  I am am totally disgusted with the excessive pay and benefits going to the CEOs, but I see Susan’s rant exclusively targets neocons — did she sleep through the 1990s?

  Actually this has been going on even prior to the Clinton/tech bubble era. Under Republican Presidents and Democratic Congresses the money has flowed freely from legislation passed and signed in bipartisan fashion.

  Perhaps she hasn’t noticed either that the members of congress have voted themselves similar benefits and golden parachutes. (Perhaps I should say not unvoted, since they get a raise unless they vote NOT to.) Has any disgraced legislator ever lost his pension? Aren’t they virtually guaranteed a cushy lobbyist job when they leave?

  Knock off the selective blame game — there is enough to go around for all — liberal and conservative.

  I have yet to hear anyone from either party call for prosecution in the subprime scam which has infected the global economy. This is far worse than Enron and everyone is covering for each other — The Treasury Dept., The Fed, financial corporations and rating agencies.

  Posted by whattheheck on Nov 21, 2007 at 1:24 AM

  Tax the rich? Absolutely!  But—not just because we need the services it will provide—but tax the rich because it is a matter of justice. They didn’t get rich because they worked harder or are more talented or valuable to society than working people.

  Dan Quayle asked “why do the good people get punished (with taxes)?
  This question is very revealing. Wealthy conservatives actually believe they deserve their wealth! They actually believe they earned it!

  But in fact, they got rich by exploiting other people’s labor, so they should give some back. They got rich by exploiting our public-funded infrastructure, so they should reimburse society for giving them the means to get rich. It’s a question of justice.

  Posted by laura85 on Nov 21, 2007 at 10:47 PM

  Laura85,

  1. Some people do get rich by working harder and saving their earnings.
  2. Dan Quayle aside — taxes are not a punishment, but the only funds available for any governmental body to work with.
  3.  You say, “Wealthy conservatives actually believe they deserve their wealth.”  And so, by implication the wealthy liberals DO deserve it? All those idiots in Hollywood deserve it?

  Don’t fall into the same habit this author has — overstating the case. A well reasoned argument can do more good and an obviously biased one can cause people to blow off the whole issue.

  Posted by whattheheck on Nov 22, 2007 at 1:03 AM

• extended discussion >>>Continued...

  Discussions with more than 5 comments are continued on our special discussion page to encourage continuity and ease of use. There are currently 17 posts.

Also featured Dark Side of Russias Rainbow
Funding Iraqs Citizen Soldiers
Hounding the Bush Dogs

Full contents
Previous issues
Subscribe and save!

Also by Susan J. Douglas

• Jon & Kate Plus Mindless Drivel
  Standing in the supermarket checkout line, I'm accosted by a slew of headlines:… morePosted on June 18, 2009
• Antidote to Drug War Madness
  So I was making dinner, and on NPR I hear, to my amazement,… morePosted on May 14, 2009
• Let’s Expose the Poster Boys of Greed
  Boy, have I learned my lesson, which I pass onto you. Do not,… morePosted on April 7, 2009
• Wanted: A Perp Walk For Plutocrats
  My husband and I were engaged in our usual dinner table rant about… morePosted on March 24, 2009
• Death by Chutzpah
  You know what I'm tired of? Chutzpah. Defined as "utter nerve; effrontery," chutzpah… morePosted on March 10, 2009