Approximately thirty years ago, Pulitzer-Prize winning columnist Jack Anderson, one of the founders of modern investigative journalism, made a radical proposal ~ to replace the cumbersome, loophole-ridden system of taxation with a simple, universal formula. He suggested that a 10 percent income tax be imposed on individuals and corporations. There would be no exemptions, no deductions, and every individual or corporation would be taxed, regardless of income or expenses. At the time his idea held intuitive appeal, because it appeared to require the wealthy to bear their fair share of the burden of financing government. Granted, if you're making $6 billion annually, a $600 million tax would still leave you with billions ~ not nearly as severe a hit as someone making $20,000 annually and being taxed $2000. Further, Anderson's proposal only addressed income, not overall wealth. Assets can take many forms (real estate, offshore accounts, tax-deferred annuities, stock portolios, trust funds, et al.). Still, it seemed like a reasonable starting point for discussion of tax reform.
Such was the imbalance between rich and poor in the 1980s that even President Reagan made a token effort at joining the reform movement, calling for no tax loopholes for millionaires. Even coming from the godfather of modern conservatism, those words would be roundly booed today by the radical right, which has hijacked Reagan's Republican Party.
Clearly the system has only become more lopsided in favor of wealthy individuals and corporations, many of whom pay little or no tax at all. One of their own, Warren Buffet, has followed Reagan's lead and is calling for an end to Bush-era tax breaks for the rich. Professors of law Bruce Ackerman and Anne Alstott take it a step further in Why (and how) to tax the super-rich. They place the situation in the context of the tax structures of other nations, and point out that "There comes a point at which extreme wealth concentration threatens the very existence of democracy, and we are reaching that point. This is one of the tragic lessons of Latin American history, where democracy has repeatedly bumped up against tight economic oligarchies that feel threatened by majority rule."
Ackerman and Alstott propose a separate and distinct annual wealth tax imposed on households owning more than $7.2 million in net assets. They argue that the top 1 % of Americans own at least 35 % of the nation's wealth as of 2007 [likely a much higher percentage today]. "We should be taxing that wealth directly, not merely focusing on million-dollar incomes .... Wealth taxation is no novelty. In 2008, France, Norway, Switzerland, and five other members of the Organization for Economic Cooperation and Development imposed the tax, and Italy is considering following suit. Spain, which dropped such a tax five years ago, now plans to reinstate it as part of a deficit-reduction plan."
Something has to give. A recent PBS Newshour analysis reported that "Median executive compensation has more than quadrupled over the last four decades, even through the financial crisis, while non-supervisory workers have seen a ten percent decline." CEO benefits include obscene retirement packages ("golden parachutes"), payable regardless of the CEO's performance. In one recent case, "the fired CEO of HP, Leo Apotheker, walked away with more than $13 million in severance while the company struggles."
Small wonder, then, that many of "the rest of us", those who are barely staying afloat and those who suffer unemployment, are taking to the streets. The Occupy Wall Street movement is spreading not only to other U.S. cities, but also to cities around the world. The demonstrations protest against social and economic inequality, corporate greed, and the influence of corporate money and lobbyists on government. Recently a remarkable document was released to the media and to the NYC general assembly ~ a Declaration of the Occupation of New York City. The declaration puts to rest any dismissive notions that the demonstrations have no focus or credibility. It succinctly lists 23 examples of corporate acts which "place profit over people, self-interest over justice, and oppression over equality," placing corporations in a position to wrest control of government from the electorate. It is worded with the weight and force of the Declaration of Independence, and should be posted at the entrance to every city hall, every state legislature, and the House and Senate in Washington, DC.
Small wonder, too, that the power brokers and oligarchs on Wall Street are taking these demonstrations seriously, as a direct threat to their power and their wealth. During the weeks of demonstrations, the NYPD has repeatedly assaulted the demonstrators and violated their civil rights, standing firm to protect the powers that be. Here's one example ~ a video showing police officers on motor bikes attacking demonstrators in the streets. No mercy, no shame.
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