Reminder: If you earn $1 million per year and get to keep it all without paying any taxes or having any living expenses, it would take you 1 million years to be worth $1 trillion. Yes - One. Million. Years!
Also, if your net worth is $10 million (top1% in the U.S.), you would be worth 0.001% of $1 trillion.
Finally, an annual earnings rate of 3% interest on $1 trillion equals $30 billion per year. $30 billion in annual interest income!
The numbers are astounding, outrageous and unacceptable.
Preventing people from becoming billionaires and trillionaires is critical, but the cat is already out of the bag. Frankly, the only way to reduce the greatest level of inequality in history as well as the inevitability of a world run by oligarchs is to tax the shit out of them.
But first, we need to start with helping people to understand what taxes are all about and why they matter.
On the website Liberal Currents, Justin Briley provides perhaps the best rationale for taxes I’ve ever seen. He writes (bold emphasis mine):
Taxes are not a punishment. They’re the fuel in the engine of the republic, a positive affirmation of and direct investment in our values, and a system of incentives and disincentives to shape our collective vision of the good. They pay for education, infrastructure, foundational research, national defense, healthcare, public services, and more. Taxes are how we build the world for each other.
It’s true that corporations and the rentier class have not been paying their fair share for some time. It’s fair to demand the immediate reimposition of a rational, functional, progressive tax scheme to begin to balance out the decades of damage and disinvestment trailing the Reagan era, and to banish his ghost from our house forever. And make no mistake, he is haunting us. Reaganomics, while a disaster for Americans in the long term, sank many of its core assumptions into the shared soil of the American psyche at something like the level of myth. “Taxes must be bad because they take my money, ergo the government must be bad because they collect taxes, ergo the government must be fought, ergo any attempt to make the government better is an attack on me.”
The thoroughness with which this myth penetrated the mind of the electorate left Democrats almost permanently on the backfoot. Even today, swimming in the inflated prices of universally despised tariffs and staring down the barrel of a war-induced energy crisis, Americans still instinctively trust the GOP on the economy far more than one would think. This reality gave birth to the “tinkercrat.” Republicans might make deep revenue cuts and pair them with deficit-busting spending on war, drug enforcement, and general inefficiency; but Democrats would follow behind them with a general orientation toward better governance. They’d raise taxes a bit, pair some patchwork, targeted social spending, balance political priorities against long-term deficit reduction, and hope for the best. Occasionally, these efforts might even stick. But eventually, Republicans would come back and wipe it all away with another devastating tax cut.
But a permanent fighting retreat is still a permanent retreat. The effect has been a ratchet that only spins in one direction: a people who are poor, broken, and subjugated by the rich.
You can almost understand why some Democrats are starting to falter. We’ve seen several proposals recently to cut or eliminate income taxes, gas taxes, and others for working Americans. These proposals are almost uniformly shortsighted and, in some cases, flatly destructive. We have to be careful here. It demonstrates an admirable ambition for a politics focused on wage earners, but largely fails the basic tests of math and citizenship.
In light of this anti-tax slopulism, it bears repeating that taxes per se are not bad. They are not a punishment, they are not theft. They may be misused, but that depends on how frequently we choose to elect Republicans. As working Americans, we should not crave a world of zero tax obligations. In fact, they are vital for us to feel the attendant bonds to each other as fellow citizens and partners in the American experiment—bonds which make our republic possible. It’s more difficult by far for oligarchs and political hucksters to argue that society doesn’t belong to you when you literally pay for it. And in fact, it’s much easier for us to claim final sovereignty over corporations and plutocrats, because we pay our taxes and they do not. The claim doesn’t just reside in the abstract realm of reason and natural rights, but here in the mud and clay where the world is built with our backs and our tax dollars.
“As working Americans, we should not crave a world of zero tax obligations. In fact, they are vital for us to feel the attendant bonds to each other as fellow citizens and partners in the American experiment—bonds which make our republic possible”.
This is the root cause of most of our societal problems today in the U.S. (along with the sad truth that there is still a significant racist faction in our country that is causing us to fight a “Cold” Civil War 160 years after the “Hot” Civil War ended): gross inequality and a two-tiered system of justice/taxation whereby corporations and the Epstein Billionaire Class pay a lower tax rate than most working Americans. Most Americans get - on a subconscious level - that they are being screwed, and the system is actually rigged against them and for “elites”. The bond of “togetherness” in our society has been broken. This has led to voters who - struggling in their daily lives, ignorant on issues and looking for change at any cost - turned to a pathologically lying, conman demagogue who told them, “Only I can fix it.” And that door was open because institutionalist Democrats afraid to upset their donor base refused to recognize the public’s desperation.
Couple this dynamic with one of the most important quotes from muckraker Upton Sinclair: “It’s difficult to get a man to understand something when his salary depends on him not understanding it.”
That quote from Sinclair applies directly to our political class.
Nothing will change until our system of financing elections changes. Politicians who hate raising money have become addicted to raising money solely to protect their personal status; they build war chests while in office that serve as a Great Wall to fend off challengers. Citizens United has allowed billionaires and mega-corporations to donate unlimited sums (much of it undisclosed to the public even though the SCOTUS justices who voted for Citizens United said money would not be a problem because transparency would allow the public to know who was donating).
Public financing of elections and neutering of Citizens United.
A progressive tax system that, frankly, is confiscatory above a certain level of earnings/wealth (like we actually had in the middle-class heyday years of the 1950-1970s).
Without implementation of these two public policies, I fear the unwanted but most realistic alternative is “sudden abrupt societal change”. And that won’t be pretty (I’ve mentioned this book before, but The Great Leveler by Princeton professor Walter Scheidel paints a bleak picture of what it takes to reduce gross inequality). From the intro to the book on Amazon: “Ever since humans began to farm, herd livestock, and pass on their assets to future generations, economic inequality has been a defining feature of civilization. Over thousands of years, only violent events have significantly lessened inequality. The "Four Horsemen" of leveling - mass-mobilization warfare, transformative revolutions, state collapse, and catastrophic plagues - have repeatedly destroyed the fortunes of the rich.”
Let’s hope we find some courage and somehow it doesn’t come down to Scheidel’s “Four Horseman of leveling”.
Woody Guthrie - This Land is Your Land
Bob Dylan - The Times They Are A-Chagin'
