December 24, 2007

IMPEACH BUSH

IMPEACH CHENEY

HUCKABEE THE FLAT TAXER

Mike Huckabee's fundamentalist Christian beliefs are disturbing and his ideas for a "fair tax," another name for a flat tax, are just as disturbing. The progressive income tax, when it's been allowed to work, has served us well. But Republicans just don't believe rich people should pay taxes. In economic terms Americans are far from equal, but for some reason I'm supposed to pay the same tax rate as billionaires. This article by Tim Watkin is at www.commondreams.org:

There are any number of practical reasons why a flat tax is a bad idea in practice. For one, switching to the Fair Tax - that is, an effective 30% tax rate on every purchase, with rebates paid in advance on purchases up to the poverty level - would mean repealing the 16th amendment of the US constitution , which empowers Congress to "collect taxes on incomes", but not consumption. Huckabee’s as likely to get the constitution amended for tax reform as he is to walk on water. (Some commentators, such as Dean Baker in Comment is Free earlier this week an>.html>, point out that in reality the rate could climb as high as 40%.) For another, government services would depend on people continually increasing their spending at a time in history when we need to learn to live sustainably and save more.

Flat taxes also mean an end to tax deductions, which in the US means an end to deductions on household mortgages and the whole array of deductions businesses claim each year. If you’ve every wondered if the current mortgage crisis could get worse, or asked what it could take to tip America over the edge and into, not just a recession, but a full-on stock market crash, there’s your answer.

Without doubt it would increase inequality in a country that is already as dangerously skewed as it was in the Gilded Age of the 1920s. Averaged across the 1920s, the richest 10% of Americans grabbed 43.6% of total income (excluding capital gains), and the richest 1% a whopping 17.3%. In 2005 the comparable figures were 44.3% and 17.4%. The richest Americans already have a much greater slice of the pie than they have had for several generations and are doing very nicely indeed under a graduated tax rate (complete with Bush’s tax cuts). A flat tax would destroy the system that seeks to redistribute some of the country’s finite wealth amongst its people in the form of schools, roads and other public goods. And before the whining begins, this isn’t a cry of class warfare, it’s economic common sense. Even if you reject arguments around fairness and moral obligations to those less fortunate, by and large economies with more equality are more prosperous and the countries more stable.

THE RIGHT WING INEQUALITY DODGE

Right-wingers go into contortions to downplay the issue of inequality in the United States. They'll claim that the very rich are there because they're more deserving. The poor are there, they claim, because they're lazy or into drugs or alcohol or other dysfunctional behaviors. They never acknowledge that the system is designed to create inequality. When conservative policies are pursued inequality invariably worsens even for people who are not particularly dysfunctional. This article by Paul Krugman examines some of the great dodges right-wingers will use to justify their vile economic and social policies. The article is at www.nytimes.com:

First is a narrow technical issue — the misuse of the Consumer Expenditure Survey, which is used to claim that there hasn’t been much rise in spending inequality. First of all, that’s not true even if you believe the survey; plus, there’s good reason to believe that the Survey has been systematically underreporting the growth in higher-income-group consumption. See CBPP on all this.

Second is the use of very long-run comparisons — what I think of as the "but even Louis the XIV didn’t have electricity!" defense. Yes, over the centuries economic progress has reduced some gross disparities — modern Americans are relatively unlikely to simply starve to death (though it can happen), so in that sense the gap between rich and poor has narrowed. But the question isn’t whether society is, in some sense, more equal than it was in 1900. It’s whether it is radically more unequal than it was in 1970. And of course it is.

Third is the downplaying of poverty. Seventy percent of the poor have cars! They must be doing fine! Except that they often can’t afford medical care, sometimes can’t afford enough food, and usually can’t find a way to get their children a decent education.
Finally, there’s the failure to appreciate just how rich today’s rich are. They’re not people who drive cars just like the rest of us, only fancier. In his book Richistan, Robert Frank (the other one) of the Wall Street Journal’s Wealth Report — yes, the Wall Street Journal — reports what he found when he began looking at how the rich live: