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.