Politics & Law

Thoughts on Tax Day 2012

Robert Reich

As Justice Oliver Wendell Holmes, Jr., wrote in 1904, “taxes are the price we pay for a civilized society.”

But the wealthiest Americans, who haven’t raked in as much of America’s income and wealth since the 1920s, are today paying a lower tax rate than they have in over thirty years. Even though America faces a mammoth federal budget deficit. Even though public services at all levels of government continue to be slashed. Even though the median wage is still dropping, adjusted for inflation. Even though the typical American is paying more of his or her earnings in taxes – including payroll taxes, sales taxes, and property taxes – than ever before.

I’m not a class warrior. I’m a class worrier. And my worries go to why all this has happened.

I worry about the political power that comes with great wealth — such as the power of the wealthy to reduce their taxes, cut the public services most other Americans depend on, while at the same time garnering special subsidies and tax breaks for their businesses — big oil, big pharma, big agriculture, military contractors, big insurance, Wall Street.

I worry about the well-financed big lies that the very rich are the nation’s “job creators,” that the benefits from tax cuts on the rich “trickle down” to everyone else, that American corporations will create more jobs if only their taxes are lowered and if regulations protecting health, safety, and the environment were jettisoned.

I worry about the increasing dominance of Wall Street over our economy and democracy, and the near political impossibilities of closing the “carried interest” loophole that allows private-equity and hedge-fund managers to treat their income as capital gains subject to only 15% tax; of resurrecting the Glass-Steagall Act separating investment from commercial banking, and of breaking up the big banks to protect against another financial crash and bailout of the Street.

You and I have every right to be class worriers — and to be outraged at what has occurred. But we have to get beyond worry and outrage, and do everything in our power to take back our economy and reclaim our democracy.

It was another justice of the Supreme Court, Louis Brandeis, who wrote in 1897, “we may have a democracy or we may have great wealth concentrated in the hands of a few, but we cannot have both.”

Cross-posted from Robert Reich’s blog.

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Comments to "Thoughts on Tax Day 2012":
    • East Coaster

      Bill Smith,

      The benefits of collaborating do not come from attacking each other and choosing sides, but critiquing ideas and actions for what they are and not for who they come from. If americans continue to choose sides (Democrat or Republican), then we are not a nation united. You don’t have to agree with Reich, but you can respond to his views in a more respectful manor as we all have the same goal = to build a prosperous nation.

      The issue is NOT that there are differing ideas proposed for how to achieve this common goal, but that A) there are individuals in power who’ve selfishly turned their focus on personal gain, regardless of the toll their actions take on others, and B) frustrated citizens are turning on each other (under the influence of so-called “news” castors pushing the agendas of their employers. When did delivering the news become the proper platform for propaganda? How sad it is that we cannot receive the news for what it is and be respected to formulate our OWN opinions based in facts.)

      There is no good reason for a conservative and a liberal to hate each other and/or disrespect one another for coming from different perspectives (of course, any perspective based in HATE should NOT be tolerated). The only way for this battle of Democrat VS. Republican to come to an end, and for actual progress towards our common goal to be made, is to recommit to COLLABORATION and CONVERSATION with mutual RESPECT. Don’t just express your hate of Reich’s ideas and think you are “doing good”. If you have something else to bring to the table, respectfully start a CONVERSATION.

      “I don’t know what he is doing here, he clearly a propagandist for the democrats and hardly takes a scholarly approach to this blog, it is basically his rant.” – What he is doing here is sharing his understanding, as is his right as a UC Berkeley Professor on a Berkeley Blog. If your understanding of politics does not match his, don’t take offense to him voicing himself and start name calling (“propagandist”). Respect that a BLOG run by UC Berkeley is the proper platform for the open speech of its professors. And, again, if you feel the need to inject your opinions, do so in a productive and respectful manor. START A CONVERSATION! See the opportunity to LISTENING to each other. Living in a hole and fighting off different and new ideas is no benefit to anyone.

      The changes I would like to see: a limit on terms for all elected officials, less propaganda in the news, and harsher repercussions for acts of corruptions.

      I too find myself a “class worrier”.

      [Report abuse]

    • Bill Smith

      Mr East Coaster,

      Thank you for your thoughtful comments on my comments. First of all, Reich is clearly a propagandist. He has used his position not to make a scholarly attempt to find answers to our problems but to consistently demonize Republicans and attack business owners. If you look over the the course of his blog the only criticism of Democrats I can recall was his criticism of Obama for using Superpac money but at the same time he excused Obama because he said it was a reaction to the Republicans use of Superpac money. Liberals clearly control the popular culture, labor unions, the news media and the academic institutions. Republicans had to find a way to get their message heard. Obama was able to raise a huge amount of money, take advantage of bundlers and managed to slip foreign money into his campaign. You will never, ever hear criticism of that from Professor Reich. Citizens United and the conservative pacs was an attempt to get our message heard. For that we get lambasted, deomonized and Obama shamefully disrespectfully treats the Supreme Court in his State of the Union Message. Recently he has ignored separation of powers and classlessly tried to lecture the Supreme Court regarding their duties. This from a professor of Constitutional law. If a Republican had done this Reich would have been the first one to call them on it.

      As for his hate, don’t you recall all the abuse and disrespect Bush, Cheney and Palin got? The Tea Party was accused of being racist, nazi and violent yet Obama is the one with the radical friends from the Weather Undergrouned, wants to support the pro nazi Muslim Brotherhood and Robert Byrd, an unrepentant member of the KKK was a DEMOCRAT senator. There clearly is a double standard. The hate is clearly coming from the left. I personally not have said anything that could be taken as a personal attack on Reich. I have merely pointed out that he uses his position to conduct a one sided rant against Republicans. As a Republican I hate the idea of my tax dollars going to support an institution that teaches ideas that are actually class warfare against myself, supports the liberal welfare state and advocates ideas and policies that will weaken this country and lead to dire economic consequences to future generations. This whole blog site is so completely one sided. How am I going to respect something that is so clearly a propanganda tool for one side of the argument? How am I to respect someone who is a professor but violates the scholarly principles and empirical methodology that I was taught at Cal?

      Reich goes into this 15% figure again. I’ve done the research and most of that 15% is applied against corporate profits that have been taxed once already. So that money could have already been taxed at the 35% and then again at the 15% tax rate. The effective rate is 40% or more. The rate is purposefully low to compensate for the double taxation and help stimulate the economy. Reich knows this but won’t say it as it does not fit his paradigm.

      I could go and on but it is obvious that if you look at the bulk of what Reich is saying he is applying a standard to the Republicans that he does not apply to the Democrats, leaves out significant relevant facts, misstates Republican positions, applies inapplicable stereotypes to the Tea Party and pretty much presents the opinions and ideas of the ruling liberal establishment and writes mostly to satisfy his main constituency – the labor movement. This is not applying an understanding, this is the model of a running a propaganda campaign. Anyway, thank you for your thoughtful comments.

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    • Avi Rosenzweig

      Do you see what happens, East Coaster and everyone else, when you try to play fair and call upon astroturf bloggers to be reasonable?

      You just open the door to allow in more of Frank Luntz’s bullet points.

      The marketing bullpen that puts out Herr Norquists’ big lies under fake names like ‘bill smith’ wants you to engage in back-and-forth. Don’t do it!

      They are a minority viewpoint that does not represent the interests of typical Americans — don’t give them more voice than they already buy.

      They are grabbing for the whole pie — it’s not enough to have Dick Cheney and Don Rumsfeld pulling the strings behind the scenes, they want to run the show from the spotlights as well as from backstage.
      If you vote for Mitt Romney, you’re putting Dick Cheney’s people back in charge.

      A few years back we were all being disturbed during dinner by telemarketers trying to sell us crap. But then we outlawed most of that activity. What happened to all of those call centers and weasels-for-hire?
      They turned into blog-comment generators available to anyone with the money and lack of human decency to employ them. That’s what ‘bill smith’ and ‘dartmouth grad’ and ‘tea party rocks’ are: repurposed telemarketers. They’re being paid to get as many eyeballs on their slimy catchphrases as possible.
      Don’t help them by trying to engage in reasoned dialogue.

      The American people will not fall for all of their hot air-ey ‘laissez-fairy’ talk about letting the rich do what they please while we trail behind the parade holding the shovels. You don’t have to vote with your wallet or your keyboard — vote with your vote and the Repooblicans will end up where they belong.

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    • Anthony St. John '63

      QUESTION TO BERKELEY PROFESSORS AND SCHOLARS

      FACT: Ignorance is the cancer of Democracy.

      When are Berkeley Professors and scholars going to join together to educate We The People so that We can all vote intelligently instead of allowing the overwhelming amounts of mendacious campaign propaganda and Washington rhetoric to fool far too many of us all the time?

      [Report abuse]

    • Dartmouth Grad, '79

      What you are missing is that these “Millionaires” are actually spending/investing their money back into our economy, which is no different than gambling in Las Vegas, which is much better than handing it over to the government who spend money foolishly…..These Millionaires are taking Risks with their own Earned Income and no one is more careful with their money than the person who earned it. How they earn it doesn’t bother me (Hookers in Las Vegas make alot of money, too.)

      What concerns me is that these same Millionaires do NOT give their money to the Government (so that some Politician can spend it on Vacations and Junkets to Las Vegas and Asia) but instead keep it in the PRIVATE Sector which produces JOBS and INCOME for the rest of us! The Governmental officials don’t earn their income, they just like to spend ours. They don’t care how they spend it because they didn’t earn it.

      [Report abuse]

    • Avi Rosenzweig

      Whatever right-wing superPAC ‘bot generated this piece of astroturf labeled it ‘Dartmouth Grad’ not so much to try and dress it up (splash a little Ivy cologne on a p.o.s. and maybe it’ll get into the clubhouse) as to further their larger project of lowering the standard of argument down to some po-mo it’s-all-just-someone’s-opinion word salad.

      Anyone from a top tier institution would see how obviously chary Dartmouth would be of putting this kind of embarrassment out into circulation. Even a legacy would be savvy enough to keep his twaddle under a bushel.

      The American people will not forget Katrina and ‘gitmo and Wall Street and all the other pestilences wrought upon us by Repooblican politicians, no matter how many infotainment segments we see from ‘laissez fairies’ and their hot airy free market philosophy. Compassion-free market. Justice-free market.

      [Report abuse]

      • Bill Smith

        Mr. Rosenzweig,

        Apparently you unaware of the fact that Republicans have no control over the weather, the local authorities squandered money that was to be used in case of a flood, that Wall Street is equally involved in both political parties. Also, Democrats have not closed gitmo and I have heard they are going to use military tribunals. I would suggest that you lay off the personal attacks, make your case and state the facts. That would help make this more of a blog and less of a rant. Unless rant is your favorite method of political discourse. In that case you convince nobody but yourself and kind of prove to the world the ultimate value of your contribution to the conversation.

        [Report abuse]

    • Bill Smith

      Dartmouth Grad these are great points. I’d also like to add that Reich never criticizes the power of labor unions, the money that people like George Soros spend in the US trying to influence public policy or the money Gore has accumulated spreading the myth of global warming. Reich only criticizes foreign money when it supposedly benefits the Republicans but never complains about Obama’s bundlers or the fact that a lot of his campaign money probably came from China. Also, a lot of the criticism of the 15% rate is regarding dividends. That is money that is taxed twice, once when it is earned by the corporation and again when it is paid out to shareholders. The effective rate is about 40%. I don’t know what he is doing here, he clearly a propagandist for the democrats and hardly takes a scholarly approach to this blog, it is basically his rant.

      [Report abuse]

      • Avi Rosenzweig

        The vast majority of educated readers will just dismiss ‘Bill Smith’ and ‘Dartmouth Grad’ as stupid or deluded or under-informed (or all three) but I keep responding to their posts because I think real Americans can’t be too cautious — these names are fake, and the posts are from paid agents of corporate propaganda machines. That’s why the same issues with the same phrasing show up on the same days all across the blogosphere.

        Interested readers can easily search for well-documented cases of moneyed interests inventing cyber-movements (like the Rick Perry presidential campaign) that don’t actually have any real public support.

        The typical American household is earning in the mid-forty thousands a year, so how worried are they about carried interest or capital gains? They’re worried about real problems, like our collective ability to respond to our needs in times of crisis — and on those issues the Repooblicans are profound failures: Katrina, Wall Street, Iraq, Homeland Security — these are all disasters caused by the G.O.P., and typical of them, not unusual incidents. We the people could not endure a government run by men like Dick Cheney and Grover Norquist no matter how distracted we might be by clowns with scary stories about monsters under our beds.

        How can a tolerant society react to a growing minority that does not broadly share our values and vision? One key is that when that noisy selfish minority says X, we should not respond by saying ‘maybe X, but maybe also Y and a little bit of Z’ That’s what the noisy minority has in mind when its bullhorns call on us real Americans to be ‘scholarly’ — they want us to remain divided so that their organized, bought-and-paid-for wacky desires can get even more distribution.

        This loud minority of rich interests and their toadies and puppets (that’s you bill smith) has plenty of cash to throw around, but we the real Americans have something even better: numbers, truth, and traditional American values and ideals. Resist their shiny chatter and they won’t continue to drag this country into the mud.

        [Report abuse]

        • Bill Smith

          Avi,

          Take a deep breath and relax. You sound kind of wound up and need to relax. I was just talking to Frank Luntz and he asked if I got the check for $424.37 for my astroturf blogging campaign. Dick Cheney then told me I was doing a great job and would be nominated for the Supreme Court as soon as Romney got elected, even if there wasn’t a vacancy. Dick and I are really close friends, we actually are fraternal twins separated at birth. I didn’t really go to Cal, I graduated from the International School of Corporate Propaganda founded by the Koch Brothers. Rush Limbaugh was one of my instructors, along with Sean Hannity and Pee Wee Herman. I also took guitar lessons one time from Jerry Garcia and have many uncredited performances on quite a few Grateful Dead albums, especially those from the early 50s. Eric Clapton sought me out to accompany him on a world tour but I had to decline since I had not completed 6th grade and those amps were too heavy for me to carry anyway. Avi, you are just too smart for me, it’s a complete waste of time now for me to respond to these blogs since you have exposed me as a fraud.

          Sincerely yours,

          “Bill” (ha ha can’t fool you) “Smith”

          [Report abuse]

          • Avi Rosenzweig

            Whatever marketing agency hired the person posting as ‘bill smith’ is certainly getting their money’s worth — he or she is falling back on the best of high-school debate team tactics to avoid attention on the matter at hand. He or she is also now taking the time to proofread — a sure sign of quality.

            Given all the poll numbers on Romney’s unpopularity with the vast majority of real Americans, the marketing agencies of the G.O.P. need the best they can get.
            The Repooblican record of failure stretches back far and wide, so except for the money and not being burdened by scruples or humility or compassion, it seems like the G.O.P. can justly position itself as the underdog. God bless those brave billionaires! Keep the faith, ‘bill smith’!

            [Report abuse]

    • Anthony St. John '63

      Prof. Reich, one most important lessons of history about political, economic and social problems that have never been solved in over 2500 years was best documented by Will Durant in his 1939 volume on “The Life of Greece” in “The Story of Civilization” series which he coauthored with his wife Ariel Durant”:

      “All the problems that disturb us today — the cutting down of forests and the erosion of the soil; the emancipation of woman and the limitation of the family; the conservatism of the established, and the experimentalism of the unplaced, in morals, music, and government; the corruptions of politics and the perversions of conduct; the conflict of religion and science, and the weakening of the supernatural supports of morality; the war of the classes, the nations, and the continents; the revolutions of the poor against the economically powerful rich, and of the rich against the politically powerful poor; the struggle between democracy and dictatorship, between individualism and communism, between the East and the West – all these agitated, as if for our instruction, the brilliant and turbulent life of ancient Hellas. There is nothing in Greek civilization that does not illuminate our own.”

      No wonder Socrates never believed in democracy!

      Ignorance is destroying our way of life and future just like it did in Ancient Athens.

      The solution to this, and all of our increasingly out of control social, political and economic problems, is to educate every child until they are at least 20 years old, and provide free access to universities to make it possible for all citizens to contribute fully to the improvement and perpetuation of acceptable quality of life for all citizens and humanity.

      We must implement this solution with the greatest sense of urgency under the current conditions of overpopulation, degrading resources and climate changes that are threatening the human race with a complete loss of control over our long term future on this planet.

      Do you think you can make that happen Prof. Reich, or are all of you Berkeley professors and scholars doomed to making outraged posts on Berkeley Blog for the rest of your lives, or until we become extinct whichever comes first?

      [Report abuse]

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