On Thu, 27 Jul 2000, Max Sawicky wrote:
> NN:
> Now, there is the core issue Max and I are arguing over-- whether the 1993
> bill achieved any such appropriation beyond economic growth. The numbers
> show that the effective tax rate paid by the very wealthiest tax payers
> grew significantly, in the case of those making $1 million per year or
> more, going from 26.8% of income to 31.7% of income - an 18% increase in
> taxation rates. . . .
>
> [mbs] What happened to your 33% increase!!!!????
> We're down to 18%!
Max, now you are being propagandistic and frustrating. One of my first posts on this whole subject said:
"Assume that the 1993 bill only increased total effective taxes 20% on the top 1% of taxpayers, that would add up $60 per year in additional yearly revenue just from that group. (The math- top 1% account for $300 billion in yearly income taxes, subtract 20%, lose $60 billion per year in income taxes.)"
18% and 20% are not that far off. Since I didn't have the effective tax rates, my first guesstimate was not too bad. Given the "near-rich" numbers, it may have been a bit high, but then again I am not including any of the increases on the top 5% of taxpayers in 1993 who have seen increases as well, due to the 36% rate and by being pushed up into the higher tax bracket.
> NN: . . .
> Max's argument for taxing the workign class to pay for a welfare state
> seems like a rather massive retreat from socialism, even from traditional
> social democracy. Sure there are some goods that are better bought
> collectively, but charging everyone through taxes for the health care,
> schools and retirement does not seem like much of an advancement.
>
> [mbs] my argument's point of departure is what has
> seemed to work, not some imaginary ideal. I don't
> claim to be a socialist, or much of one, so I can't
> be retreating from it.
This assumes that what distinguishes European social democracy from the US is its historic tax policies. In my historical reading, the major difference is the destruction of much of the power of the capitalist class due to World War II and the state's postwar role in reconstructing industry, giving the working class much greater power to leverage social democratic goals.
There are a number of other theories given by scholars such as the "exceptionalism" argument of feudal histories more easily transitioning into state-based socialism and the different evolution of the labor and socialist-communist parties.
But if we are talking about actual historical experience...
> NN:
> . . . But tax-the-rich politics are key, since "tax revolts" among the
> working class has been a key tool of conservatives in splitting working
> class
> movements. Keeping taxes low on working class folks while soaking the
> rich is key to a broad range of socialist goals. - Nathan Newman
>
> [mbs]
> Tax the rich politics doesn't seem to work very well.
> Tax everyone fairly to pay for things we need is a
> better bet, in my book.
The last thirty years of empirical history in the US seem to argue against your thesis. Tax revolts in the US have been a constant weapon of the rightwing, from Prop 13 through Reaganism to a whole new bout of it at the state level in the 1990s.
Walter Mondale ran a nice social democratic campaign in 1984 promising good social programs for all with taxes for all, and he was defeated decisively. Clinton's tax-the-rich rhetoric for social programs was denounced by Tsongas as "pander bear" politics, but he won not only the nomination and the Presidency.
In the early 1990s, when Pete Wilson was seeking to slash university and public education funding, a broad coalition of folks came together around an increase in the top tax rates on the wealthy. Despite Wilson's "no taxes" stand, he was forced to cave to the pressure and accept the tax increases, despite the requirement under previous tax revolt laws that we needed a two-thirds vote of both state houses.
Every poll on earth shows that most Americans think they are personally overtaxed but think the wealthy are undertaxed in our society. That is why the GOP always links their tax cuts for the wealthy to some kind of tax cut or at least rhetoric that their bill will "really" help the average taxpayer as well.
The last time a broadbased increase in income taxes was passed at the federal level was in the 1960s, not to pay for the Great Society, but to pay for the Vietnam War. Most other revenue increases have been regressive excise and payroll taxes.
The fact is that for the social programs American receive, given that they don't have national health insurance, they ARE overtaxed - combining local, state and federal taxes - and resent the hell out of it given the benefits flowing to the wealthy and corporations from state policy.
You and Doug talking about taxing those higher than the median income to subsidize the social programs of the lower median just does not have much political appeal to your average UPS driver or other $20 per hour worker just barely beating the median wage. Especially since they don't trust were the programs are going, it ends up being a political loser.
-- Nathan Newman