AUSTIN, Texas -- Some days, you have to believe right-wing ideologues have
lost touch with reality completely. Their latest proposal to prevent future Enrons
is -- ta-da! -- cut the capital gains tax.
And exactly what does that do to prevent future Enrons? Nothing. Except Ken
Lay won't have to pay taxes on the stock he sold while his company cratered
and his employees watched their life savings disappear.
Enron & Etc. are not the consequence of a few greedy executives cutting
corners -- they are the result of a series of deregulatory measures and other
changes in the law that set up the opportunity for theft on a staggering scale,
making it not only possible but inevitable. The Sarbanes bill, good on it, leaves
quite a ways to go.
In a recent issue of the National Review, television personality Larry Kudlow
goes even further, suggesting:
Speeding up the rest of the Bush tax cuts, which so disproportionately benefit
only the wealthiest Americans that even the gutless Democrats are now gagging
over them.
Making stock turnovers tax-free, so "unlocking past equity gains will
not be a taxable event." There's one for the coupon-clippers.
Reducing taxes on dividends. Another one for the coupon-clippers.
Letting new business start-ups go tax free for a couple of years. "Unhindered
by corporate taxes, business could get into gear more quickly." Since corporations
aren't paying corporate taxes now, why not give them a further break? Great
idea.
Mr. Kudlow claims the debate over reducing the capital gains tax has been
"class warfare-driven and contentious at best." No kidding.
It's amazing to me that only populists are ever accused of class warfare.
Talk about losing a grip on reality. I'll tell you what class warfare is:
When the Gingrich Republicans mandate that the IRS spend more of its resources
auditing working-class people who get the Earned Income Tax Credit than it does
auditing millionaires who use countless tax evasion schemes.
In 1999, the average after-tax income of the middle 60 percent of Americans
was lower than in 1977. The 400 richest Americans between 1982 and 1999 increased
their average net worth from $230 million to $2.6 billion, over 500 percent in
constant dollars.
By 1999, over one decade, the average work year had expanded by 184 hours.
The Bureau of Labor Statistics reported that the typical American worked 350 hours
more per year than the typical European.
Less than half of all Americans have any pension plan other than Social Security.
Wage-earners in the United States collectively ended the decade with less pension
and health coverage, as well as with the Industrial West's least amount of
vacation time, shortest maternity leaves and shortest average notice of termination.
Among the Western nations, the United States has the highest levels of inequality.
From 1980 to 1999, the 500 largest U.S. corporations tripled their assets
and their profits, and enlarged their market value eightfold, as measured by stock
prices. During the same period, the 500 corporations eliminated 5 million American
jobs.
This is class warfare. (All these figures are from Kevin Phillips' excellent
book, Wealth and Democracy.)
None of this is inevitable or even accidental. It is a consequence of oligopoly,
rule by the rich through their campaign contributions. In the 1940s and '50s,
the middle 60 percent of Americans got the largest share of the growth in the
economic pie. In the '90s, the increase went disproportionately to the very
wealthy. Mr. Phillips reports it dwarfs what happened in the Gilded Age.
When George W. Bush came into office, the first thing he did was give an enormous
tax break to the richest 1 percent of Americans, the same people who had gained
at such a madly soaring pace. That's class warfare, too.
If I may be just wildly populist here for a moment, we can't fix any of
this by making it worse with even more tax cuts for the very wealthy.
It puzzles me that the well-off complain so much about taxes when they pay
so little relative to their wealth. (See the Web site of Citizens for Tax Justice
at www.ctj.org)
If Mr. Bush has his way, we are going to fight an unprovoked war with Iraq
without the financial aid of any allies. The health care system is falling apart
in front of our eyes, schoolteachers should be paid at least twice what they make
now, lack of low-income housing is making life hell for the working class and
now the right wing wants to cut taxes for the rich yet again?
That's class warfare.
Copyright © 2002, The Baltimore Sun
###
