A Fiscally Conservative 3rd World Country?

Bernie Sanders, Independent Senator from Vermont, has said America is becoming a 3rd world country. In speaking on the subject of health care reform and the vociferous objections of so-called fiscal conservatives who steadfastly refuse to spend another dime to ensure a healthy population, he marveled at how quickly they were willing to reduce existing tax revenue streams, and authorize un-paid-for expenses that will climb to $3 Trillion for a completely unnecessary war in Iraq.

The tax cuts that were the hallmark of the Bush Administration, were quite specifically geared toward the wealthiest Americans. During those 8 years, the rich got inexorably richer, and the middle class became the working class, and the working class became the poor. The poor stayed that way.

Those reduced taxes translated to less money flowing to state governments, so while the rich got a luxurious tax break, local property taxes skyrocketed. Middle class families were stuck making up the difference with increases in the taxes on their homes and cars.

Here’s another angle. Scheduled to expire in 2010, thanks, again, to the Bush Administration, is the estate tax. You may not recognize that term, because those orchestrating the repeal drive a few years back sold it as getting rid of the “death tax.” Sound familiar?

This outrageous tax, they declared, would destroy family farms and small businesses across America, when they were handed down to the next generation.

Voters bought in to the story, shedding tears over the tragic losses of multigenerational 200 acre farms. Fiscal conservatives whipped the sympathy into a frenzy and passed a tax cut on estates. Few of us ever learned the fact that by simply exempting such passing on of entrepreneurial enterprises, we could have avoided those tragedies, Instead, we now face a loss of a trillion dollars from tax revenue over the next 20 years because the tax break will be extended to the richest of the rich, less than 0.3% of Americans.

The middle class will have to make up that trillion dollars, too.

In 2007, Warren E. Buffett, the billionaire chairman of Berkshire Hathaway, urged Congress to keep the estate tax. He opined that plans to repeal the tax would benefit the very few richest American families, and widen income disparity in the United States.

Rather than call it a “death tax,” he said it should be called a "death present.""A meaningful estate tax is needed to prevent our democracy from becoming a dynastic plutocracy." And this is coming from one of the richest persons in the world.

Here’s the reality: having a job doesn’t protect you from being poor and unable to pay your bills and buy food. Having two jobs in a family doesn’t protect you from losing your house. Having four jobs between two people doesn’t guarantee you can afford the health care you need just to stay alive. No matter how hard you work, no matter how you try to save, no matter if you don’t smoke or drink or eat fried foods, there is no guarantee you will live the American Dream come true. It has not been less true since the dawn of the industrial revolution and rise of the middle class.

But you will pay taxes on the money you earn from those jobs. And those taxes will be used to build highways, educate children, pay firefighters, defend the nation from enemies, control air traffic to prevent collisions, inspect food processing plants, bail out banks and fund research for cancer cures. Everyone in the country will benefit from the money you contribute, rich and poor alike.

Yet people who didn’t work a day to collect the millions their great-great-grandfathers earned 100 years ago seem to think they should receive this unearned cash tax free. And the rest of us can go to hell. As Marie Antoinette never said, “Let them eat cake.”

Then there’s the capital gains tax, which we discussed a few weeks ago on this blog, You take some money, leverage it to the hilt, and move it from one electronic account to another, make more money, and “earn” a capital gain. The fiscal conservatives would like to ensure you don’t pay a dime of tax on that “earned” capital gain. It doesn’t matter what benefit you might get from the use of those tax dollars. It certainly doesn’t matter what OTHER people might benefit.

Those same fiscal conservatives were quite happy to raid the coffers of the social security system back in the days we contributed more than we paid out. All that “excess” money was supposed to remain untouched for any purpose other than social security because economists recognized that as the baby boomers aged, that money was going to be necessary to meet the need. Instead, it was used to buy missile defense systems and fight wars of choice. Now that we’re running short, their answer is to dispense with the system and let people invest in an unregulated Wall Street.

I think you can see where I’m going with this. Senator Sanders is right. Our elected representatives (if they can be called that) have gone to great lengths to ensure that the middle class will disappear. We’ll have the powerful upper class, and the powerless poor who work for them. Just like in 3rd world countries.

But we have one hope to prevent this. A very American hope. The vote. The self-styled fiscal conservatives may have money and power, but there aren’t very many of them. The rest of us can change the course of history, apply the brakes to the widening disparity in the distribution of wealth.

At no time has this been more possible than it is right now, by confronting the obstructionism of the Blue Dog Democrats and Republicans with regard to health care reform. When they cry for a halt in spending on things that help us little guys, but continue to throw money at wars and cut taxes on the rich, we can let them know that they will pay for it at the polls. Call, write, email, march, but don’t let them get away with this. They’ve already gotten away with enough.

JM