Thursday, January 22, 2009

On the decline of democratic capitalism

David Cay Johnston in Mother Jones

For the past 14 years, on my former beat as the tax reporter for the New York Times, and now as a columnist for the trade journal Tax Notes, I have been documenting the myriad ways in which our economy has been recalibrated to take from the poor, the middle class, and even the affluent and give to large corporations and the very richest of the rich. I discovered, for example, that in 2000, people making between $50,000 and $75,000 paid the same share of their income to the federal government as those making more than $87 million, and that those making between $100,000 and $200,000 were taxed more heavily than those making $10 million—a state of affairs the Bush administration called "progressive" when I first reported it in 2005. Thanks to Reaganite economic policies, we have encouraged once-competitive industries such as oil, car manufacturing, accounting, and news media to congeal into unchecked (and now struggling) oligopolies. We have slashed the ranks of white-collar cops—the auditors and investigators whose beats are taxes, securities, food and drugs, pollution, etc.—and hamstrung those who are left. And we have transformed the idea that bankers would self-regulate from a crackpot notion into the essence of government policy, with results as predictable as if we removed all traffic lights and stop signs on the theory that most drivers are responsible.
The rest of Johnston's lengthy article gives recommendations on reforms that can be implemented to improve this dire situation.

1 comment:

LVTfan said...

Not all kinds of income are created equal. We ought not to tax wage income at all.

But income that comes from what the classical economists called economic rent we ought to tax heavily ... VERY heavily. To do that would be to collect back for the use of the community that which the community created. That's just.

And we would not be taking from individuals who created something the value of their creation, so no one would have reason to criticize taxes.

Stopping the taxes on things which we want more of would be a good thing. Starting to tax that which none of us created would be a good thing. Our economy would be efficient and just, and there would be opportunities for all who want to work.

Land speculation would no longer be profitable inactivity. Land speculators, like the slaveholders of 160 years ago, would do their best to convince the rest of us that we are somehow putting an unjust burden on them by removing their windfall and stopping their theft of others' labor.

Are we ready to correct this miserable iniquity and inequity, or shall we live with it for another decade or two, and leave it to our children as a legacy?