My Point of View by Jennifer Vogt-Erickson

Are the rich different from you and me? I wonder what F. Scott Fitzgerald would think if he saw the likes of today’s wealthy. Over 500 people in the U.S. are now in the “three comma club” — the billionaire class.

Being a millionaire isn’t as exclusive as it once was due to inflation, but still only about 8 percent of households own that much in assets apart from their primary home. We can probably wrap our heads around $1 million, but $1 billion is still pretty abstract.

One could be an indefatigable spendthrift and barely burn through the interest that such wealth accrues each year. An annual average return of 5 percent on a billion, for example, would yield $50 million each year.

But surely taxes would consume most of that money? Not necessarily. Having great wealth gives people means to hire a tax lawyer (or stable of tax lawyers) to take advantage of every loophole available in the voluminous tax code.

These loopholes aren’t for mere thousandaires like most of us. It’s tilted to favor the very rich, who now, thanks to Citizens United, can spend all they want in order to help elect tax-friendly candidates who can add even more favorable loopholes to the tax code.

Plutocracy is a wonderful, responsive system — if one happens to be a plutocrat.

People who can use their money to influence elections and benefit from Congressional actions will rig it every time. They especially target tax policy. It’s rational behavior.

Former Supreme Court Justice Louis Brandeis was blunt about what this means. “We must make our choice. We may have democracy, or we may have wealth concentrated in the hands of a few, but we can’t have both.”

Some call pointing out gross inequalities the “politics of envy” or “envy economics.” Is envy what people feel? Or is it more akin to horror at the obvious distortion wealth causes in what is supposed to be a democracy? The word “envy” is a distraction from this state of affairs, and only the people can save democracy, one ballot at a time.

When Bill Clinton took office in 1992, the 400 highest earners paid nearly 27 percent of their income in federal taxes. By 2012, they paid less than 17percent. Thus, families averaging over $300 million in income paid nearly the same rate as families making $100,000. President Obama raised taxes for the highest earners somewhat (effectively 22.9 percent in 2013), and Bernie Sanders and Hillary Clinton have promised the same.

Republicans, though, have obsequiously pledged to reduce the tax bills of the wealthiest earners, some to as low as 10 percent. Many also favor cutting the inheritance tax, which more than 99 out of 100 estates are not big enough to owe anyway. It would be a giveaway to the super rich that hardens the wealth gap and reinforces the advantages of children born within wealthy families.

These proposals are buttressed by widespread anti-tax ideas. We’re to the point where some libertarians openly equate taxation with theft, and many Republicans promise to “protect people’s money” by keeping the government “out of people’s wallets.” This talk, subtle or not, disavows the legitimacy of government, which most people depend on for a host of public goods and a functioning society.

Paying taxes is patriotic, and it’s a fair price to pay for civilization. Decent roads, free education and unleaded tap water aren’t “nice-to-haves” — they’re necessities for social order. Social order creates predictability, which in turn supports a thriving business climate. The people at the top benefit the most from it, and they should pay the largest share in taxes.

To ordinary people, government policy can mean sickness or health, education or underemployment, and even life or death. It’s absolutely OK to demand that government be responsive to everybody’s needs, not just those who can afford their own team of Congresspersons.

It’s even OK to think health care is a right that shouldn’t be left to the market. To industry, especially pharmaceuticals, sickness is better than health because it’s more profitable. Government, on the other hand, is motivated to save costs by keeping people healthy.

One can mock Michelle Obama for trying to make school lunches healthier, but obesity-related chronic diseases are driving the greatest percentage of health care spending, and most of it is for people under 65. We all know many people affected by this, maybe ourselves included, and most of us can’t hire a personal trainer and chef as part of a lifestyle change.

So, the very rich are different. When they see a political horse race, they see a prize to win, and they place careful, ample bets with their donations. The rest of us without such “moneyed speech” can head for the barn and grab a shovel. Your vote is your shovel. Please help us dig out of this deep, deep mess.

 

Jennifer Vogt-Erickson is a member of the Freeborn County DFL Party.