Free Republic
Browse · Search
News/Activism
Topics · Post Article

Skip to comments.

The Return of Class War - Bush and the new tyranny of the rich
Msn.com ^ | June 5, 2003 | Michael Kinsley, Founding Editor, Slate

Posted on 06/05/2003 10:31:14 AM PDT by LurkedLongEnough

The fall of communism 14 years ago was not the end of history, despite Francis Fukuyama's famous prediction. It was, though, pretty much the end of the argument, in most of the world, about the best way to organize society. The answer (despite quibbles over the details and a surprisingly resilient minority preference for theocracy) is democratic capitalism.

But this intellectual victory for the dynamic duo didn't resolve the tension between them. Democracy presumes and enshrines equality. Capitalism not only presumes but requires and produces inequality. How can you have a society based on equality and inequality at the same time? The classic answer is that democracy and capitalism should reign in their own separate "spheres" (philosopher Michael Walzer's term). As citizens, we are all equal. As players in the economy, we enjoy differing rewards depending on our efforts, talents, or luck.

But how do you prevent power in one from leeching into the other? In various ways, we try to police the border. Capitalism is protected from democracy, to some extent, by provisions of the Constitution that guard individuals against tyranny of the majority—for example, by forbidding the government to take your property without due process of law. Protecting democracy from capitalism is the noble intention, at least, of campaign finance laws that get enacted every couple of decades.

Separation of the spheres also depends on an unspoken deal, a nonaggression pact, between democracy's political majority and capitalism's affluent minority. The majority acknowledge that capitalism benefits all of us, even if some benefit a lot more than others. The majority also take comfort in the belief that everyone has at least a shot at scoring big. The affluent minority, meanwhile, acknowledge that their good fortune is at least in part the luck of the draw. They recognize that domestic tranquility, protection from foreign enemies, and other government functions are worth more to people with more at stake. And they retain a tiny yet prudent fear of what beast might be awakened if the fortunate folks get too greedy about protecting and enlarging their good fortune.

That was the deal. Under George W. Bush, though, the deal is breaking down. With Republicans in control of the White House and both Houses of Congress, the winners of the economic sphere are ratting on their side of the bargain and colonizing the sphere next door. Campaign contributions are only the crudest way power is transferred from the economic sphere to the political one. In addition, there are well-financed lobbying organizations, including some masquerading as research institutes. There is the inherent complexity and boredom of tax and regulatory issues, which repel people who don't have a major financial stake. There is the social milieu of the president and most members of Congress. They may not all come from the worlds of posh aristocracy or self-satisfied business success (Bush remarkably straddles both), but these are the worlds they are plunged into as they rise to congressional leadership. And, in the back of their minds, these are the worlds they may hope to find a place in when they lay down the weary burdens of power.

The recently enacted tax bill is such a shocking and brazen gift for the wealthy that it is hard to describe in anything short of these cartoon-Marxist terms. After two Bush tax cuts, consider how we now burden people at the bottom and at the top of the economic ladder.

A minimum-wage worker today must pay the FICA payroll tax of 15 percent (if you include the employer's share, as economists agree you should) on the very first dollar she earns. If she has children, she may qualify for an earned income tax credit, but she may not. If she works hard and moves up the income scale, she'll soon be paying another 15 percent in income tax. You might call this "double taxation," but President Bush doesn't.

Our minimum-wage worker most likely falls into one of the unadvertised holes in the Bush something-for-everyone tax cut. There is nothing in it for her. This gap around the minimum wage was supposedly inadvertent, and Republicans on Capitol Hill were eager to correct it. But Republican congressional straw boss Tom DeLay said incredibly that he would only allow the alleged correction as part of yet another big tax cut with more goodies for the serious income brackets.

Now look at the fellow who has a few millions or billions. He probably has paid no income tax on most of that pile, since investment profits are taxed only when they are "realized"—i.e., cashed in. Any investment profits that he hasn't cashed in when he cashes in himself escape the income tax forever. If he can hold on for a few years, under current plans, the estate tax will die before he does. His investment income also is exempt from the 15 percent FICA tax that hits the minimum-wage worker at dollar 1.

And now the tax rate on both dividends and capital gains is capped at 15 percent. This is supposed to alleviate the unfairness of having both a corporate income tax and a tax on the profits individuals earn on their investments in corporations. This is the one Bush does call "double taxation," and he rails against its injustice. In 2002 the total burden of the corporate income tax was barely one-fifth of the burden of payroll taxes, but it apparently strikes a more sensitive group of people.

So, under the American tax system as designed by the Bush administration and congressional Republicans, the most a person of vast wealth is expected to contribute to the commonweal from his or her last dollar of investment profits is the same 15 cents or so that a minimum-wage worker is expected to pay on his or her first dollar. This does not mean that we have a flat tax. We have a tax system of vast complexity, with wildly different tax burdens on different people. But we have a tax system that, on balance, knows who's in charge.


TOPICS: Culture/Society; Editorial; Government; News/Current Events; Politics/Elections
KEYWORDS: capitalism; classwarfare; taxreform
Navigation: use the links below to view more comments.
first 1-2021-30 next last
The big guns are getting mighty desperate. The shrillness in quest of bragging rights to the superior liberal viewpoint is deafening!
1 posted on 06/05/2003 10:31:14 AM PDT by LurkedLongEnough
[ Post Reply | Private Reply | View Replies]

To: LurkedLongEnough
true democracy = communism (as defined)

We live in a Constitutional Republic - NOT in a democracy
2 posted on 06/05/2003 10:33:08 AM PDT by steplock ( http://www.spadata.com)
[ Post Reply | Private Reply | To 1 | View Replies]

To: LurkedLongEnough
The tyranny of the rich. . .

Barbara Streisand

Tim Robbins/Susan Sarandon

Dixie Chicks

etc

etc

etc

3 posted on 06/05/2003 10:37:11 AM PDT by MEGoody
[ Post Reply | Private Reply | To 1 | View Replies]

To: *Taxreform
Payroll taxes on the poor is a red herring. That's what the EITC is for. More social engineering nonsense from Kinsley.

Kinsley, you nitwit, people who don't pay taxes don't get tax cuts!!!

4 posted on 06/05/2003 10:37:38 AM PDT by kevkrom (Dump the income tax -- support an NRST!)
[ Post Reply | Private Reply | To 1 | View Replies]

To: kevkrom
The lefts argument is that social security is a "trust fund"

If that is the case their fica taxes are paying a fair value for services rendered. What they are not paying is their share of running the government.

5 posted on 06/05/2003 10:43:48 AM PDT by rudehost
[ Post Reply | Private Reply | To 4 | View Replies]

To: LurkedLongEnough
Our minimum-wage worker most likely falls into one of the unadvertised holes in the Bush something-for-everyone tax cut.

The people who ALWAYS get screwed when it comes to tax cuts are single people.
6 posted on 06/05/2003 10:45:30 AM PDT by John Lenin (Government does not solve problems, it subsidizes them)
[ Post Reply | Private Reply | To 1 | View Replies]

To: LurkedLongEnough
A minimum-wage worker today must pay the FICA payroll tax of 15 percent (if you include the employer's share, as economists agree you should) on the very first dollar she earns. If she has children, she may qualify for an earned income tax credit, but she may not. If she works hard and moves up the income scale, she'll soon be paying another 15 percent in income tax. You might call this "double taxation," but President Bush doesn't.

Mr. Kinsley's logic here is comical. Mixing income taxes and FICA taxes serves his purpose in this case, but the reality is that FICA taxes are allocated to specific Federal entitlement programs. The hypothetical minimum-wage worker he describes sends her children to public schools (and they get free meals at school in the process), but she doesn't pay a nickel to the Department of Education. They enjoy the protection of the U.S. military, but she doesn't pay a nickel to the Department of Defense. Etc., etc., etc.

Of course, Kinsley can't look at it this way because the logical outcome of this kind of analysis would force him to conclude that the only "fair" tax system would require either the elimination of FICA taxes or a flat income tax for all workers.

So, under the American tax system as designed by the Bush administration and congressional Republicans, the most a person of vast wealth is expected to contribute to the commonweal from his or her last dollar of investment profits is the same 15 cents or so that a minimum-wage worker is expected to pay on his or her first dollar.

So a person who earns $10,000 contributes $1,500 "to the commonweal" (the "commonweal," as I have shown above, being nothing more than Social Security and Medicare), but a person who earns $1 million and doesn't contribute any more than $150,000 is somehow getting away with something?

7 posted on 06/05/2003 10:45:38 AM PDT by Alberta's Child
[ Post Reply | Private Reply | To 1 | View Replies]

To: LurkedLongEnough
Capitalism is protected from democracy...

This is such utter drivel that I'm thinking Kinsley will be embarrassed by it if he's embarrassed by anything - democracy is a political system based on people voting directly on issues rather than channeling that vote through a representative; capitalism is an economic system wherein surplus funds are redirected by their owners to funding other enterprises. They do not conflict. One does not need to be "protected" from the other.

What Kinsley evidently means is that a society with egalitarian ideals must permit inequality if it is to run a capitalist economic system. And so it must. But a society with egalitarian ideals is not the same thing as a society intending to enforce equal possession of wealth by state fiat. It is the latter to which the redistributionist nostrums so beloved to the left pertain. It is perfectly true that you cannot attain equal distribution of wealth across a society under capitalism; it is equally true that you can't obtain it under a state mandated socialism either. You can aspire, you can idealize, you can theorize, but you just can't make it happen, and every attempt to do so on a national level without a single exception has, in practice, increased unequal distribution of wealth rather than decreased it. In short, Kinsley's social theory is crap and he'll never admit it.

8 posted on 06/05/2003 10:47:28 AM PDT by Billthedrill
[ Post Reply | Private Reply | To 1 | View Replies]

To: Billthedrill
To summarize . . . Give the public unfettered access to the treasury, and the nation will eventually be broke.
9 posted on 06/05/2003 10:51:24 AM PDT by Alberta's Child
[ Post Reply | Private Reply | To 8 | View Replies]

To: Billthedrill
You nailed it completely. When the socialist-minded start trying to equate democracy with equality, you know they are getting ready to employ a philosophical Trojan horse with which to spout socialist drivel.

In other words, they must change the definition of democracy and/or capitalism in order to build their house of cards.
10 posted on 06/05/2003 10:54:28 AM PDT by Catalonia
[ Post Reply | Private Reply | To 8 | View Replies]

To: Alberta's Child
Give the public unfettered access to the treasury, and the nation will eventually be broke.

Didn't de Toqueville say something to this effect way back in the 19th century?

11 posted on 06/05/2003 10:55:43 AM PDT by Catalonia
[ Post Reply | Private Reply | To 9 | View Replies]

To: Catalonia
He probably did. I'm not really familiar with his works, so I may have remembered this from a quote that someone else posted.

Sometimes it's hard for me to avoid plagiarizing -- I remember a lot of things like this without ever remembering where they are from. LOL.

12 posted on 06/05/2003 10:57:12 AM PDT by Alberta's Child
[ Post Reply | Private Reply | To 11 | View Replies]

To: Alberta's Child
No worries. I wasn't trying to catch you. I just happened to have bought de Toqueville's Democracy in America recently and remember him saying something about this.

It also happens to be true, I believe.

13 posted on 06/05/2003 10:59:51 AM PDT by Catalonia
[ Post Reply | Private Reply | To 12 | View Replies]

To: LurkedLongEnough
Communism didn't fall, only it's major hosts perished.
Like a parasite, communism buried itself in the UN, in the DNC, in newsrooms and in Transnational corporate headquarters around the globe, and still festers and grows in thirld world backwaters everywhere.

It's just waiting it's chance. Waiting for it's Queen, Hillarious the Worst.
14 posted on 06/05/2003 11:02:49 AM PDT by the gillman@blacklagoon.com (Every so often, 'live free or die' involves dying.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: LurkedLongEnough
The Democraps practices of the "Politics of FEAR, DIVISION, and HATRED are alive and well!
15 posted on 06/05/2003 11:03:26 AM PDT by leprechaun9
[ Post Reply | Private Reply | To 1 | View Replies]

To: LurkedLongEnough
A minimum-wage worker today must pay the FICA payroll tax of 15 percent (if you include the employer's share, as economists agree you should) ...

I don't believe this is true. When determing revenue sources for the Federal Budget, yes, you include the employer's share, but the tax burden on the individual is still only 7.5%. He's stretching definitions in order to fit his square peg into a round hole. Surprise, surprise.

16 posted on 06/05/2003 11:08:11 AM PDT by Catalonia
[ Post Reply | Private Reply | To 1 | View Replies]

To: LurkedLongEnough
"Democracy presumes and enshrines equality."

Uhh...no. Democracy gives one an equal voice not equality in all aspects of life.

"Capitalism is protected from democracy..."

Representative government cannot exist without the free market and vice versa.

17 posted on 06/05/2003 11:20:03 AM PDT by jjm2111
[ Post Reply | Private Reply | To 1 | View Replies]

To: Billthedrill
Well put.
18 posted on 06/05/2003 11:21:43 AM PDT by jjm2111
[ Post Reply | Private Reply | To 8 | View Replies]

To: Alberta's Child
"...a person who earns $1 million and doesn't contribute any more than $150,000 is somehow getting away with something?"

Yep. He's spreading his wealth to a whole bunch of hard-working yard workers, nannies, and cleaning people rather than to a single airplane ticket to Iraq for a traitor cwrongressmen. [or fill in your favorite democrap spending outrage]

19 posted on 06/05/2003 11:25:29 AM PDT by LurkedLongEnough (All Right now. Baby, it's all Right now. = = Free ==)
[ Post Reply | Private Reply | To 7 | View Replies]

To: LurkedLongEnough
Protecting democracy from capitalism is the noble intention, at least, of campaign finance laws that get enacted every couple of decades.

We know, and the liberals know, that campaign finance reform was mainly rhetoric by a few to smear the many, mainly those mean spirited friends of the rich, the Republicans. The left revealed very quickly that they had already figured on how to exploit the loopholes and they were also depending on the continuing support of the media for free campaign support for leftists causes. They only wanted to handicap and limit the Republicans and since the Republicans get most of their money through small contributions from the many, to limit the American citizens in their selection of leaders.

It all boils down to electing honest leaders and having a open, objective, and honest media to keep track of them and their activities. You and yours have not done such a good job in that area, have you? Protecting dishonesty, sexual abuse, and treason is not what the founders had in mind.

There are so many weak points to Kinsley's arguments that his intention must have been to give the mental gymnasts on the left some sort of obtuse argument to spout.

A minimum-wage worker today must pay the FICA payroll tax of 15 percent (if you include the employer's share, as economists agree you should) on the very first dollar she earns. If she has children, she may qualify for an earned income tax credit, but she may not. If she works hard and moves up the income scale, she'll soon be paying another 15 percent in income tax. You might call this "double taxation," but President Bush doesn't.

That is your beloved Social Security you are talking about, Michael. Although we know it is a scam you have to at least pretend to go along with the idea that the deductions are investments in the future, don['t you? I mean, there really is a trust fund, isn't there? So, these are not taxes at all but government sponsored investments for our old age, right? Funny, when Republicans argue that the FICA is really just another income tax and that the employee actually pays it all you liberals argue against that saying that, no, the employer pays half. When it suits you, though, you easily jump to the other side of the fence. As far as this hypothetical employee moving up the ladder and getting taxed more, that is not a Bush deal, that is the progressive income tax you liberals love and cherish in order to punish achievement.

Now look at the fellow who has a few millions or billions. He probably has paid no income tax on most of that pile, since investment profits are taxed only when they are "realized"?i.e., cashed in. Any investment profits that he hasn't cashed in when he cashes in himself escape the income tax forever. If he can hold on for a few years, under current plans, the estate tax will die before he does. His investment income also is exempt from the 15 percent FICA tax that hits the minimum-wage worker at dollar 1.

Once again, Michael, you forget whose money this is. You consider it the government's money from which these greedy individuals are refusing to turn loose. Number one, Michael, and this ought to be embarrassing even to you, If an asset has not been cashed in (sold, etc.) then it is really only assets on paper, or potential wealth. I suppose he could borrow against it but it is not actual disposable income until he sells it. Now, just to make you happy, other governments tax those assets if they are in the form of real property. It is called a property tax. Ever heard of it?

Like I said, Michael, this article is too rich in targets to even be fun.

20 posted on 06/05/2003 11:30:51 AM PDT by Mind-numbed Robot (Not all things that need to be done need to be done by the government.)
[ Post Reply | Private Reply | To 1 | View Replies]


Navigation: use the links below to view more comments.
first 1-2021-30 next last

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
News/Activism
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson